Launching New Products
Other participants in the latest round include Prosus Ventures, Tencent, Harvard Management Company, along with returning investors AC Ventures and East Ventures.
“Bibit is leveraging on technology to make investment accessible to everyone, including the inexperienced first-time investors. Therefore, we are seeing an accelerated interest from retail investors into the capital market,” said Bibit CEO Sigit Kouwagam.
The new round takes Bibit’s total funds raised to $110 million, with the startup company planning to invest the fresh capital in developing and launching new business products, increase headcount and improve its financial education services.
The startup company was launched by investing platform Stockbit in 2019 and is one of the Indonesian investment apps that target new business investors, in addition to SoftBank-backed Ajaib, Bareksa, Pluang, and FUNDastic.
The startup offers robo-advisor services and makes investing decisions on behalf of their customers and their risk profiles. The company claims that 90% of its users are millennials and new business investors.
The number of business retail investors increased 56% on an annualized basis in 2020, according to Indonesia’s Financial Services Authority. When it comes to mutual funds only, the number of investors increased 78% year-on-year to 3.2 million.
Even though the COVID-19 pandemic had a devastating impact on the global economy, interest in stock investing increased as investors hoped to leverage market dips. The startup company and its rivals are looking to increase accessibility to investing with lower fees and minimum investment amounts compared to traditional brokerage companies like Mandiri Sekuritas, which also welcomed new retail investors and saw increased average transaction value in 2020.
However, the number of business retail investors remains low in Indonesia, especially compared to Singapore and Malaysia. This suggests that there are more growth opportunities for investment service providers.
What makes the startup somewhat different from its competitors is the company’s focus to introduce content that helps new, less-experienced investors. On the other hand, Bibit’s rival Ajaib is focused on financial educational features as its selling point.
“Indonesian mutual fund customers have grown almost 10x in the past five years. Savings via mutual funds is the first step towards investing and Bibit has helped millions of consumers start their investing journey in a responsible manner. Sequoia Capital India is excited to double down on the partnership as the company brings the same customer focus to stock investing with Stockbit,” said Rohit Agarwal, vice president of Sequoia Capital India, in a statement.
Indonesia saw 1 million new fund investors join the market in the first quarter of this year, according to Bibit, citing IDX and Central Custodian data.
Investing robo-advisor app Bibit raised $65 million in a new funding round led by Sequoia Capital. To date, the investing startup business has raised $110 million in total business funding and said it would invest the new proceeds in developing and rolling out new products, hire employees and improve its financial education services.
About the Author
Luigi Wewege is the Senior Vice President, and Head of Private Banking at Caye International Bank. Outside of the bank, he serves as an Instructor at the FinTech School which provides online training courses on the latest technological and innovation developments within the financial services industry. Luigi is also the published author of: The Digital Banking Revolution.