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Indonesian Fintech Investor, BRI Ventures’ CIO Says Company will Use $250 Million Fund to Create “Real Value,” Not Just High Valuations

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Indonesia is one of Southeast Asia’s largest markets for digital platforms and services. The country offers an attractive business environment and opportunities for investors who are interested in projects that aim to take advantage of fast-growing economies.

BRI Ventures, the investment division of Indonesia’s oldest bank, BRI, has a $250 million fund that it plans to allocate toward the development of initiatives that can create real value for the nation’s residents.

In statements shared with KrAsia, William Gozali, CIO at BRI Ventures, noted that his company believes in “real value” creation and they aim to become “strong value-add investors” for their portfolio companies.

BRI Ventures is a Jakarta based venture capital and private equity firm that’s supported by Bank Rakyat Indonesia. BRI Ventures is established as an independent business entity with its own funding processes.

Gozali noted that the VC company focuses on businesses that are generating consistent revenue and also those initiatives that can continue to grow their operations. He explained that for BRI Ventures, revenue means “validation.” He also mentioned that when people or organizations truly value your products and services and when they value your brand or company, then that’s when they’re willing to part with their hard-earned money. This is a sign of “real value creation,” Gozali said.

He also clarified that there can be times when valuation merely reflects the “perception of value, the future.” However, validation-revenue means “the real value created now,“ Gozali noted.

He told KrAsia that BRI Ventures is mainly focused on Fintech, education, agriculture, retail, transportation, and healthcare related businesses. The VC firm has made strategic investments in digital wallet provider LinkAja, SME-focused Fintech firm PayFazz, and peer to peer lending platforms Investree and Modalku.

Nicko Widjaja, CEO at PT BRI Ventura Investama (BRI Ventures), a subsidiary of BRI, had stated (in late June 2020):

“In today’s digital tech business ecosystem, the landscape has shifted from growth at all cost, to sustainable growth. The name unicorn has been adapted from Silicon Valley, which might no longer sit well with today’s ecosystem. Indonesia needs Sembrani, a symbol for Indonesian start-ups.” 

In May 2020, BRI Ventures (along with other firms) invested in Fintech firm Nium. The company said it would use the funds to support its product development efforts.

BRI Ventures had also launched Dana Ventura Sembrani Nusatara (Nusantara Venture Capital) in Jakarta on June 24, 2020.

The company will offer convenient access to venture capital for digital technology and Fintech firms, including SMEs.  Dana Ventura aims to accelerate the growth of local start-ups by offering digital technology-enabled products in offline and online environments.

Dana Ventura will mainly be funding seed-stage and Series A ventures.

Widjaja had noted (earlier this year):

“The philosophy behind BRI Ventures investment is ‘value over valuation’ in which our focus is seeking businesses with strong fundamentals. The funding will be channeled to start-ups that already produce products, have income from their operations and have a clear business strategy toward profit.”

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Australian SME Banking Challenger Judo Bank to Use Cloud based Bank Operating System Developed by nCino

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Australia-based SME challenger bank Judo Bank has chosen nCino (NASDAQ: NCNO) to help streamline its lending processes. Judo Bank will be using nCino’s Cloud-powered platform to enhance its services which are mainly intended for small businesses.

nCino, Inc. is an established cloud banking and digital transformation solutions provider for the financial services sector. nCino’s Banking Operating System will be used by Judo Bank to improve its lending operations.

Judo Bank will be working cooperatively with nCino so that the digital challenger can automate key aspects of its banking processes.

As mentioned in a release:

“As part of the nCino Bank Operating System, Judo will implement nCino’s Commercial Banking Solution, which automates workflows and provides real-time reporting, elements of the credit analysis process and digital document management capabilities to drive a transparent and fully digital end-to-end lending process.”

Tim Alexander, Chief Product Officer at Judo Bank, said that Judo’s goal is to help Australian SMEs by “bringing back the craft of relationship banking and delivering the funding that SMEs desperately need and deserve.”

Alexander added that his company shares some of the same views as nCino which is why they chose them “to help disrupt the industry and deliver differentiated services to better finance the growth ambitions of Australian SMEs.”

Mark Bernhardi, General Manager of APAC at nCino, noted that his company is looking forward to working with Judo Bank. They’ll be helping the digital challenger with “creating a more efficient banking experience that is tailored to [its] clients’ individual needs,” Bernhardi said.

He added:

“Judo was created to be fast and nimble and to provide new options to SMEs across Australia. We look forward to building upon our partnership to support Judo’s craft of relationship banking, enabling them with the latest technology from nCino as they help their clients capitalise on the right opportunities at the right time.”

In May 2020, Judo Bank had managed to secure $250 million through an equity round and also achieved Unicorn status (companies valued at $1 billion or more).

nCino is a Wilmington, North Carolina-based Fintech that offers a cloud banking platform built on the Salesforce platform. It launched its initial public offering (IPO) in July 2020. The firm’s shares had rocketed on the NASDAQ as soon as trading began earlier this year.

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P2P Lender Robo.cash Claims it’s Been Successful During Current Crisis Because of Profits from 2019 and Working with Affiliated Loan Originators

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A study recently performed by the European peer to peer (P2P) lending platform Robo.cash reveals that the main factors for its success during COVID were the profits it generated in 2019 and “work with affiliated loan originators.”

Robo.cash claims that “remarkably, interest rates, funding volumes and the platforms’ experience do not play big roles here.”

Robo.cash’s research study looked at the 15 most popular or widely-used P2P platforms from 6 different European countries – which includes platforms that have been “performing successfully” during the pandemic and those that have recovered “at least 80% of their pre-crisis volumes.” This is category A of businesses, Robo.cash noted.

Another category of businesses that Robo.cash looked at were those platforms that are trying to bring back their volumes “after the first wave of COVID-19 and have not yet reached 80% of the funding levels prior to the crisis.” This is the second or category B of lending platforms.

Robo.cash wrote in a blog post:

“[Our] research indicates 2 major factors that have apparently determined the platforms’ successful performance. First, all the A-category platforms except one work with their own or fellow loan originators. Second, profitability matters. All the platforms (or financial groups they operate within) from the category A have reported positive profits in the previous year. The B-category platforms, on the other hand, finished the FY 2019 with negative profit – or have not published any reports for this period at all.”

They added:

“Surprisingly, interest rates and the period of the platforms’ operation have shown little to no correlation with their success during the crisis. The ‘size’ of the platform does not determine its successful performance either. Large platforms might seem more capable of weathering the storm, but as they often work with third-party loan originators, it is not always the case. In the meantime, smaller platforms are more flexible.” 

As reported in early September 2020, Robo.cash had claimed that it was still profitable, despite COVID related Issues. The company said that it was preparing for its initial public offering (IPO) in December 2020 in Australia.

Sergey Sedov, CEO at the Robocash Group, had confirmed during a webinar last month that the IPO will take place toward the end of this year. He also mentioned that Robocash is planning to secure AUD 60 million (appr. $43.7 million) in capital.

Sedov added that most of the funds will be directed towards developing Robocash’s existing line of products and also to expand further by offering new products. The P2P lender will also be entering new markets in 2021, Sedov said.

The funds raised from the planned IPO will also be used to establish a virtual bank in the Philippines.

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