Four months after leading a $ 30 million development round at Bibit, Sequoia Capital India has doubled its investment in the Indonesian robo-advisor app. Bibbit announced today that the firm led a $ 65 million development round, which included Procius Ventures, Tencent, a Harvard Management Company partnership and investors AC Ventures and East Ventures.
This brings the total funding of Bibit to $ 110 million, including Series A, announced in May 2019. Its latest round will be used to develop and launch Bibit’s financial education services, and to launch new products.
Bibit was launched in 2019 by Stockbit, a stock investment platform and community, and is part of a crop of Indonesian investment applications focused on new investors. Others include SoftBank Ventures-backed Ajaib, Barraxa, Plung and Foodstick. Bibit runs robo-advisory services for mutual funds, investing users’ funds based on its risk profile, and claims that 90% of its users are millennials and first-time investors.
According to the Financial Services Authority of Indonesia (Otoritas Jasa Keuangan), the number of retail investors grew by 56% year-on-year in 2020. Specifically for mutual funds, investors said 78% of investors had grown year-over-year to 3.2 million, based on data from the Indonesia Stock Exchange and Central Securities Custodian.
Despite the economic impact of COVID-19, interest in stock investment grew as people took advantage of the market downturn (the Zakara Composite Index fell in the first quarter of 2020, but is now steadily recovering). Bibit and its competitors, such as App Mandiri Securites, want to make capital investment more accessible than traditional brokerages with lower investment and minimum investment amounts, which led to an increase in new retail investors and average transaction value last year.
But the percentage of retail investors in Indonesia is still very low, especially compared to markets like Singapore or Malaysia, offering opportunities for development of investment services.
Apps like Bibit focus on content that helps first-time investors invest capital to scare them least. For example, Ajayab also presents its financial educational characteristics as a selling point.
In a press statement, Sequoia Capital India Vice President Rohit Aggarwal said, “Indonesian mutual fund customers have grown almost 10 times in the last five years. Savings through mutual funds are the first step towards investment and Bibit has helped millions of consumers start their investment journey in a responsible way. Sequoia Capital India is excited to double the partnership as the company takes into account the same customers for stock investment with Stockbit. “