According to a filing to the Indonesian Stock Exchange, Bank Rakyat Indonesia paid IDR 71.32 billion (US$5.28 million) for 71,207 shares of BAV through a private placement agreement. “Investment in BAV is part of the company’s non-organic growth strategy that has been set in BRI’s 2013-2017 Corporate Plan, and stated in the Business Plan 2017-2019,” BRI management said in the statement, adding that the strategy is aimed to achieve the firm’s aspiration to provide integrated financial services to customers. 

The state lender said that its increasing role in the financial inclusion development and the need to “enhance the company’s innovation and collaboration with start-up fintech” were among the main reasons of the acquisition. “The selection of BAV…is based on the similarity of business focus with BRI, which is the small and medium enterprises segment, which hopefully accelerate synergy and integration in the future,” BRI said. 

BRI first hinted of the acquisition in July, when it said that it was in the due diligence process. “(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 as saying. Dailysocial had reported that the BRI lining up Rp 500 billion ($37 million) for the VC firm’s expansion.

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.