Facebook wants to be your “bank” through the blockchain and alternative money universe. Google wants to be your “bank” by making it possible for you to open a bank account on its platform, abstracting its bank partners which legally have to power everything for compliance. What is happening here is evident: controlling and maintaining demand in the 21st century will go through the path of financial services and money. In other words, if you are part of the network into how someone spends and uses his or her money, you are sure to get the attention of that person. That explains why fintech remains one of the most fascinating sectors in the world of modern venture funding.
The business of finance is even more fascinating in the emerging world. Yes, one of the biggest frictions remains how to pay and be paid, outside the nexus of cash transactions. That explains why Gojek, which began life as a bike sharing app, wants to co-own a bank. Yes, “Indonesian internet giant Gojek paid about $160 million to increase its stake in PT Bank Jago, making its biggest investment in financial services to date.” The playbook is simple: connect the millions of Gojek users into a banking ecosystem and capture value directly, instead of funneling it into a bank where you get nothing. That is a clear double play strategy.
GoPay, Gojek’s payments and financial services arm, bought almost 1.96 billion shares at 1,150 rupiah apiece, according to a stock exchange filing. The internet firm used call options to acquire its stake, completing the deal at a steep discount to Friday’s close of 3,900 rupiah and paying about 2.25 trillion rupiah ($159.5 million) in total. Combined with an existing stake of 4.14%, the additional investment takes Gojek’s holding in Bank Jago to 22.16%.
The move reflects the company’s ambition of accelerating its forays into financial technology. Gojek — Indonesia’s most valuable startup, backed by Facebook Inc. and PayPal Holdings Inc. — aims to let users open bank accounts with Jago and then manage their finances through its app, according to an emailed statement. GoPay has been trying to extend digital financial services to merchants and drivers since 2017.
Gojek wants to capture more value just as MultiChoice/DStv’s BBNaija which invested in BetKing wanted to capture value in betting. The company had noted that betting sites were capturing more value on its shows, as people bet on contestants being cut. So, by bringing BetKing home, it could make it an official partner and capture more value.
Tomorrow at Tekedia Live, I will lead our live session. During my monologue part, I will discuss Scaling through Partnerships. As I do that, I will illustrate how MultiChoice is executing a winning strategy, and what we can learn from the firm. Also, I will discuss the latest deal where the entertainment giant in Africa acquired 20% of BetKing for $81 million.
Many of our Tekedia members would have understood the strategic play in that acquisition: Double Play Strategy; I will explain at deeper levels. Essentially, the best consumer money-making business in BBNaija is the gambling part in which betters wager who among the housemates would be cut as the show progresses.
These playbooks are about playing at the edges which offer “extra”, as noted in our 2021 Outlook video.
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