WELAB, backed by investors including billionaire Li Ka-shing and Astra International, a unit of Jardine Matheson, is launching a digital bank in Indonesia to tap the young and fast-growing economy.

Bank Jasa Jakarta, which WeLab and Astra jointly bought last year, launched the digital bank called Bank Saqu on Monday (Nov 20). The bank is targeting the younger generation, including so-called “solopreneurs”, such as small business owners, freelancers, and full-time employees juggling side hustles.

The expansion is part of WeLab’s ambitions to grow in the Asia region, after starting a digital bank in Hong Kong in 2020. The fintech also runs several businesses in mainland China.

“The aspiration of the company is to build this from where we are today, around 60 million users to half a billion users by 2032,” said Simon Loong, group chief executive officer of WeLab.

The solopreneur segment is fast-growing, and a study commissioned by Bank Saqu estimates that one in three Indonesians, or some 117 million people, will have multiple side gigs by 2030.

Bank Saqu allows customers to open up to 20 accounts to cater to different income streams, and plans to roll out lending and fee-income products in 2024, said Loong. On average, it takes about three to five years for virtual banks to be profitable, he added.

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Profitability path

WeLab has a cooperation with HSBC Holdings to co-develop digital offerings in Malaysia, and potentially, the efforts could expand elsewhere, according to Loong.

In Hong Kong, WeLab Bank reported a loss of HK$161.5 million (S$27.8 million) during the first half, narrowing from HK$224 million a year ago. Its net interest income doubled in H1.

“We are on track to hopefully achieve profitability in 2024, 2025,” said Loong.

The bank unrolled its digital wealth business in Hong Kong in 2022, and has 15,000 wealth customers and is targeting launching in the Greater Bay Area, according to Loong.

WeLab, a so-called unicorn, filed for a Hong Kong initial public offering (IPO) application in 2018, but that was delayed. Loong said that the company is still “looking at” an IPO but the equities market is “pretty soft,” and it doesn’t have a specific timeframe. BLOOMBERG