Funding societies co-founders Kelvin Teo (L) and Reynold Wijaya
Funding Societies (also known as ‘Modalku’ in Indonesia), an online lending platform for small and medium enterprises (SMEs) in Southeast Asia, has received an undisclosed amount of investment from Samsung Venture Investment Corporation (SVIC), the VC arm of the South Korean tech giant.
As part of this investment, Funding Societies and Samsung Ventures, along with Samsung Life Insurance Co., will create a strategic alliance to introduce prospective partnerships and collaborations.
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Funding Societies intends to expand its technology team across the region to tap on the best of the tech and data talent available.
The funds raised will also be channelled towards developing the fintech firm’s strategic and new business models in its next stage of evolution, driving its vision of financial inclusion for SMEs in Southeast Asia.
“Funding Societies’s digital financing solutions effectively bridge the SME credit gap in Southeast Asia and we are confident that they will continue to lead the region’s digital lending industry and finance the future of these economies,” a Samsung spokesperson said in a statement.
Founded in 2015 by Kelvin Teo and Reynold Wijaya, Funding Societies connects SMEs in Singapore, Indonesia and Malaysia with retail and institutional lenders.
As of November 2020, it claims to have given out more than SGD$1.8 billion (US$1.4 billion) across 3.3 million loans. The platform has also increased its individual lender base to 200,000 in just over five years of operation.
Recently, the company received an exemption from Singapore’s Ministry of Law to provide loans to sole proprietors along with a tax exemption where interest returns for its investors will not be taxable from 2020 onwards.
Earlier this year, Funding Societies raised US$40 million in a Series C round of funding from investors, including Sequoia India, Softbank Ventures Asia Corp, SG Innovate, BRI Ventures, Qualgro Partners and Endeavor.
Additionally, the platform raised credit lines from Asian and European financial institutions to further support small and medium-sized enterprises.
Ever since the pandemic accelerated the adoption of digital means, fintech has been predicted to overtake traditional banking and finance sources as the leading source of financing opportunities for SMEs.
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In Southeast Asia in particular, investors have been bullish about the fintech sector because of the market size which includes a large unbanked population size.
According to the SME Finance Forum, there is a US$320 billion SME financing gap in Southeast Asia today despite the many startups operating in the sector.
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Image Credit: Funding Societies
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