Why did Grab buy a robo-advisor few people know about?

Taken at face value, Grab’s acquisition of Bento Invest last month made plenty of sense. By bringing the robo-advisor into the fold, the super app could further its ambition of padding out its financial services offering – not only to bring affordable wealth management products to it users, but also to support its bid for a digital banking license in Singapore.

But the deal also came with a number of unanswered questions: Why did Grab opt for Singapore-based Bento, a relatively unknown player, in a world seemingly awash with higher profile robo-advisory startups with their own user bases and better brand recognition?

‘Most suitable partner’

Grab didn’t disclose financial details of the acquisition. A filing with Singapore’s Accounting and Corporate Regulatory Authority indicates that Bento – now known as GrabInvest – and its holding company have combined paid-up share capital of S$6 million (US$4.31 million).

Bento co-founder and former CEO Chandrima Das has joined Grab as its head of wealth management and is responsible for GrabInvest. She will be reporting to Philip Chew, head of investment and new businesses within Grab Financial Group, which is headed by senior managing director Reuben Lai. The robo-advisor’s 11 other employees have made the move to Grab as well.

Lai tells Tech in Asia that Grab saw Bento as the “most suitable partner” in the robo-advisor space due to its proprietary tech and experience in digital wealth and asset management.

(From left to right): Reuben Lai, senior managing director, Grab Financial Group (GFG); Chandrima Das, head of wealth management, GFG; Philip Chew, head of investment and new businesses, GFG / Photo credit: Reuben Lai

Bento may not have as much brand recognition as firms like StashAway, Autowealth, or Kristal.AI, but it has been an active player in the Singapore robo-advisor market since launching in October 2016.

This inconspicuousness is perhaps explained by the fact that it has mainly sold white-label solutions to financial services providers, while its smaller business-to-consumer operations have focused on managing assets for high-net-worth individuals, charities, and endowments.

“Bento’s clients represent some of the largest financial institutions in the region, and we are excited to welcome them to the Grab family,” Lai says, without naming any of those clients.

Such an “out-of-the-box” solution may have proven more attractive to Grab from the perspective of getting a wealth management service to market as quickly as possible. It may also have come at a more attractive price point than some of the better-known robo brands out there.

The fact that millions of… payments are already going through the platform gives Grab a significant edge in attracting funds.

Ultimately, Grab may have seen the acquisition mainly as a means to acquire the necessary regulatory clearance, as quickly and affordably as possible.

To sell wealth management products to retail consumers, Grab needed to attain a capital markets service license under the Retail Licensed Fund Management Company (retail LFMC) category from the Monetary Authority of Singapore (MAS).

Such rules require retail LFMCs to have a minimum base capital of S$500,000 (US$359,000), as well as “financial resources which are in excess of its total risk requirements,” a minimum of three full-time Singapore-based employees with at least five years’ experience, and a CEO with at least 10 years’ experience.

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