Indonesian stock trading platform Stockbit to acquire local brokerage firm

The Stockbit team

Stockbit, an Indonesia-based stock trading platform and community, has secured approval from Financial Services Authority (OJK) to acquire local securities company Mahakarya Artha Sekuritas.

The deal value has not been disclosed.

Mahakarya Artha Sekuritas has been Stockbit’s brocking partner since September and will now be rebranded to Stockbit Sekuritas, TechinAsia has reported.

The acquisition will enable Mahakarya’s users to open stock accounts and trade in the Indonesian Stock Exchange via the Stockbit app.

In May this year, Bibit, a mutual fund investment app acquired by Stockbit in 2019, raised a US$65 million growth round led by Sequoia Capital India. The Stockbit app itself also raised an undisclosed amount of Series A funding led by East Ventures in 2019.

Also read: Pocket power: 27 personal finance startups in SEA to help you manage money

Founded in 2013, Stockbit is a social network for stock investors, before gradually changing into an app that integrates stock trading, information aggregation, and social networking. Its Bibit and competitors aim to simplify capital investment for first-time investors while requiring a lower fee and a smaller minimum initial investment sum than traditional brokerages.

To provide its users with stock trading services, Stockbit is required to team up with traditional securities firms, such as Sinarmas Sekuritas. This partnership then ended up in August before Stockbit’s tie-up with Mahakarya.

According to OJK, retail investors in Indonesia surged 56 per cent year-over-year in 2020. Investors in mutual funds also grew 78 per cent year-over-year to 3.2 million.

However, financial literacy in the country’s capital market remains low at 4.9 per cent, with a total of only 2.69 million retail equity investors out of its 270 million population.

This presents opportunities for investment services, which are buoyed by the COVID-19 pandemic when people took advantage of a market pullback and turned to online environments.

Last month, Indonesia produced a unicorn in the stock and mutual fund investment sector. Ajaib, a Robinhood-like mobile-first stock and mutual fund investment platform, became a billion-dollar company after a US$153 million Series B fundraise. The app requires no minimum sum to open a brokerage account and claims to charge the lowest brokerage fees in the market.

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