Indonesia’s state-owned lender Bank Rakyat Indonesia (BRI) is in the process of acquiring a venture capital firm, local media website Indotelko reported. The due diligence is currently underway and is expected to conclude this year.
“(The acquisition is) considering that we don’t have VC and security subsidiaries yet. We continue to focus on expanding and strengthening our subsidiary units,” BRI president director Suprajarto was quoted in the report as saying.
Meanwhile, Dailysocial reported that the bank is lining up Rp 500 billion ($37 million) for its expansion. A part of the money will be allocated for the VC buyout.
It is very likely that the new VC arm will be headed by Indra Utoyo, a former director for innovation and strategic portfolio at Telkom, whom BRI appointed last March as its operational director.
Utoyo had been responsible for Telkom’s digital business development, including the firm’s VC arm MDI Ventures, for several years.
BRI joins the club of Indonesian banks – state-owned and private – that have set up their own VC arms to venture into fintech.
Bank Mandiri was among the first to launch its investment arm in 2015. Since then, Mandiri Capital Indonesia (MCI) has invested in about 5-6 fintech startups, deploying around Rp 150-200 billion of capital per year.
In January this year, private lender Bank Central Asia (BCA) launched a venture capital business unit called Central Capital Ventura (CCV). It has committed Rp 200 billion ($15 million) in investments so far.
According to market observers, total investment into the Indonesian fintech industry is expected to reach $8 billion by 2018. Authorities and players alike have been working together to embrace the boom, launching new regulations and injecting capital into the sector.