Lightspeed’s investment in Pintu, Indonesia’s leading crypto broker for the millennial investor

Today, we are honored to announce a $35M series A1 investment in Pintu — a mobile-first crypto investment platform focused on the millennial, new to investing user segment in Indonesia. Over the years, Lightspeed has invested in over 50+ crypto / blockchain companies across the world, including the likes of FTX, Wintermute, Zerion, DeversiFi, and Blockchain.com. Our investment in Pintu furthers our commitment both to the crypto ecosystem as well as to the APAC region from where some of the best crypto entrepreneurs are emerging.

Lightspeed is a long-term venture investor with a horizon of 10+ years and we invest in teams first. In Pintu, we found one of the strongest technology, business, and product teams we’ve ever seen in the region. As a fund, we have seen several crypto bull and bear markets and we really gravitate towards teams that have stuck to their long term belief in the potential of crypto through all the ups and downs that are common in this evolving ecosystem. Pintu was founded during the early 2020 crypto lull. As a result, the Pintu team has survived some challenging regulatory and market uncertainties: an important rite-of-passage in crypto.

Our investment in Pintu is based on our global crypto thesis that is playing out in Indonesia and other parts of the world.

First and foremost, we believe that Crypto is at an inflection point. In the US, crypto has transitioned from retail-led speculative trading to an institutional asset class. We expect markets in SEA/India to follow suit as global crypto users grow from 5 million in 2016 to 100+ million in 2020 — still at just 2.7% of bank account holders globally.

Second, each local market has a dominant exchange — e.g. Coinbase (US); Binance (CN); BitSo (MEX); Upbit (S. Korea), and so on. Pintu has built the best brand and the most user-friendly app for the retail, new-to-investing user segment in Indonesia, and the growth it has seen since launch has all the makings of a player that will come to dominate the region. Since inception, Pintu app downloads have grown by 70% month over month and the transaction volumes grown by 80% month over month. All of this growth has come organically with minimal marketing spend so far.

Third, we believe that crypto exchanges such as Pintu that are compliant with local laws and regulations and plugged into the local banking ecosystem will have a key advantage over international players over time. Foreign exchanges that operate locally in Indonesia are often doing so without the necessary legal compliances. In the absence of these compliances, user experience suffer over time — on/off-ramping into local fiat becomes a challenge, working with local banks is out of the question, and offering a variety of innovative products such as yield-producing crypto accounts is also not possible. As a result, we believe the long term winners will be local players that work closely with regulators and understand regional nuances deeply.

Finally, we believe that crypto — not stocks — is going to be the insertion asset-class of choice for new-to-investing millennials in Indonesia. Retail investing overall is highly under-penetrated in Indonesia — the Indonesian stock exchange yearly retail trade volume was ~$14B in 2019; for comparison, Malaysian exchange does $0.4B per day in retail volume. The retail stock investor penetration in Indonesia is still <1% compared to 3.7% in India, 9% in Malaysia and 26% in Singapore.

Given the severe under-penetration of investment products in the retail investor base and the heavy debasement of the Indonesian currency, which has lost 84% of its value since late 1990s, many new investors are getting attracted to crypto as their asset class of choice due to the potential high yield it offers. According to Indonesian Ministry of Trade, as of June 2021, Indonesia has 6.6 million crypto users, up from 1.2 million in 2019. In comparison, there are 2.2 million public equity investors in the country today. In the next five years, we expect Indonesia to reach crypto adoption similar to where the US is today (~10% of population), and touch over 30 million users. This trend towards crypto adoption is further accelerated by crypto-supportive policies in Indonesia as well as the covid-19 pandemic which brought far more new retail investors online globally, hungry for yield.

There are 33 million young users in Indonesia and over 55 million e-wallet holders, which are the prime target segment for Pintu in the next 5 years. Crypto allows Indonesians access to — for the first time — a globally traded investment product. Pintu has the strongest market brand, the best user experience, and hands down one of the strongest teams we’ve ever seen operating in this region. We are excited to back them on their way to becoming the leading brand in crypto throughout the region and are glad to work together with the best crypto investors in the world.

— Hemant Mohapatra & Amy Wu

About Lightspeed: Lightspeed is a multi-stage venture capital firm focused on accelerating disruptive innovations and trends in the Enterprise, Consumer, and Health sectors. Since 2000, Lightspeed has backed entrepreneurs and helped build companies of tomorrow, including Snap, Affirm, AppDynamics, OYO, Nutanix, Byju’s, and Udaan. Lightspeed and its affiliates currently manage more than $10 Billion across the global Lightspeed platform, with investment professionals and advisors in India, Silicon Valley, Israel, China, Southeast Asia and Europe.