Indonesian investment app, Ajaib just invested $52M to buy 24% of Indonesia's Bank Bumi Arta. The unicorn startup is now the bank's second-largest shareholder.

• Flashback. Ajaib hit unicorn status when it raised $153M in Series B, which we wrote about in October.
• This hops on a trend of fintech startups acquiring traditional legacy businesses.

Why the bank needs cash? It sounds like a pretty ironic problem, but Bank Bumi Arta only had $112M in common equity this September but needs to own $28B more by December 2021. So yes, it was a much-needed sell to Ajaib.

😉 Tables have turned

You'd think startups would be getting acquired by legacy businesses, not the other way around.

Fintech startups have been buying banks over the past few years. Gojek, Shopee's Sea Group, Akulaku and FinAccel (Kredivo parent) did the same.

• It's a global trend. In the US, LendingClub,  SoFi and several others did the same.
• With its new buy, Ajaib may have plans to become a full-fledged digital bank.

💰 Why buy?

Forget the bank license. Fintechs can only provide financial services to a certain extent — unless they get a digital banking license.

• It's hard (and takes ages) to jump through hoops and apply for a digital banking license. Who knows if you'll even get one?
• Acquiring a bank lets you provide banking services much faster. Plus, you get the banking expertise of the bank's employees.

By buying a bank, fintechs would be able to provide complete digital banking services through their apps. With Gojek and Bank Jago as an example, get features like:

• Connect your Gojek transaction history on the Jago app.
• Instantly open a Jago bank account through the Gojek app.

Other reasons. Some fintechs may buy banks because integrating with their services can lower expenses and improve financials — to help them turn a profit faster.

Extra Scoop: Banks and fintech. An arranged marriage built on trust, but does it last long?