South-east Asia’s biggest ride-hailing platform Grab has unveiled plans toward a $700 million investment in Indonesia. The majority of which will be toward Fintech development, particularly mobile payment and financial services in the country.
Singapore-based Grab which sees a major presence in a number of Southeast Asian countries including Singapore, Malaysia, Thailand, the Philippines and Vietnam is gearing up toward a major investment drive in Indonesia, a country that is already Grab’s largest market.
As revealed by its announcement, the well-funded Uber competitor is planning to invest $700 million over the next four years to push Fintech-powered services to an Indonesian population that is largely unbanked whilst having a significant rate of smartphone adoption.
Of Indonesia’s near 250 million people, only 75 million have bank accounts and the telling statistic sees a number of Fintech initiatives coming to the fore at a rabid pace in the country. New regulations enforced by the country’s financial regulator, the OJK, is making it easier for Fintech startups and companies to establish themselves in the market as the government embraces a pro-Fintech agenda.
In quotes reported by Nikkei, Grab co-founder and CEO Anthony Tan stated:
We see this huge, unbanked population becoming bankable. If we can…give access to those won don’t have access to credit, it’s a massive opportunity.
A Growth Market
Grab’s plans toward bringing easily-accessible financing options for the Indonesian public includes loans toward purchasing vehicles and smartphones that will inversely support Grab’s own expansion plans for its core ride-hailing platform in the country.
Further, Grab also stated that Jakarta would be home to its newest R&D center, with aims to hire 150 engineers over the next two years. The company presently has centers in Singapore, Seattle and Beijing. The marked investment in Indonesia, where the company claims a growth of 600% in 2016, is in line with the government’s technology-forward plan to transform Indonesia into the largest digital economy in the region by 2020.
Grab’s reveal of its mammoth investment effort in Indonesia comes within days of the company hiring the country's former chief of police as an executive, in an effort to help the ride-hailing platform comply with tough regulations in its biggest market.
The company also adds that it will invest up to $100 million in local startups that focus on mobile financial services. When established, the investment arm will compete against the likes of Bank Central Asia, Indonesia’s largest private bank, which announced its own Fintech-specific venture capital firm merely days ago.
As of December 2016, OJK figures revealed 135 fintech startups registered in the country, up from 51 recorded in the first quarter of 2016. Fintech transactions are expected to grow annually by nearly 20% and transactions within Fintech platforms in the country are expected to reach $37.1 billion by the year 2021.
Images from Shutterstock.