In the midst of a tech funding winter, which is felt by fintech startups in particular, Investree recently announced a US$231 million Series D funding round. Apart from securing the funding round, the Indonesia-based company has also made several important milestones that contribute to its growth.

In an email interview with e27, Investree Group CEO Adrian Gunadi named the company’s collaboration with the National Public Procurement Agency (LKPP) through E-Catalogue and Electronic Procurement Services (LPSE) as one of its notable milestones.

He sees that the company’s strategy to provide a source of funding for MSMEs who are involved in government procurement projects has been a key milestone for its growth.

“So far, we have recorded a total of IDR1.2 trillion in loan disbursement specifically for MSMEs who won government tenders. This makes up around 10 per cent of our total loan disbursement figure since we started in 2015. Through this collaboration, we have assisted MSMEs from various industries to obtain a source of funding, including MSMEs providing goods & services for health facilities, electronic office supplies, and MSMEs in the creative industry. We have done this specifically through Garuda Financial, Investree’s sales channel specifically for government projects or tenders,” Gunadi elaborates.

“This is important as MSMEs are the backbone of the economy, especially throughout difficult times such as the pandemic. We are also proud of the collaboration that we have built, as we believe that collaborating with strategic partners enables us to leverage each other’s strengths and bring the best results for MSMEs in Indonesia, in line with our campaign #KolaborasiUntukTumbuh (#CollaborationForGrowth).”

Also Read: Investree completes acquisition of Amar Bank, increases stake to 18.4 per cent

What is the thought process behind these initiatives? According to the company, supporting and empowering MSMEs has always been its vision and mission since it started in 2015.

Investree acknowledges that the difficulty faced by the MSMEs may not come from the financial institution itself because, per law for loan disbursements, the requirement for legal documents and collaterals can be quite complex. This is the part where MSMEs usually face the issue of their loan application being rejected.

“Our goal is to support various industries in Indonesia, such as creative industries or service provision industries, to be able to grow at a rate they’re comfortable with and support them with the financial needs to grow. Thus, we wanted to reach as many MSMEs as possible in order to bridge the credit gap that remains in Indonesia through strategic initiatives, where one of them is to build collaborations with relevant stakeholders to increase our reach to more MSMEs,” Gunadi says.

“With LKPP and LPSE being the main government institutions that deal with MSMEs who are involved with government tenders, we decided that collaborating with them would be the right strategy to reach and support more MSMEs in various industries inside their ecosystem.”

When asked about why these initiatives are better at delivering success for the company, Gunadi says that the company did not see its initiatives in terms of better or worse, as they are all “developed based on the needs of our borrowers.”

“From a business point of view, we aim to provide a solution to a problem faced by a market, in this case, the problem faced by MSMEs in Indonesia when it comes to loan applications,” he explains.

Also Read: Investree attracts US$10M from Swiss firm to fund Indonesian MSMEs making social, economic impact

“It comes back to our vision and mission to provide access to financial tools for those that did not have access to it from conventional financial institutions.”

Across the SEA

Investree is one example of an Indonesian startup that has expanded its footprints across the region. With regards to their expansion across Southeast Asia (SEA), what lessons can Investree share with us?

It all begins with the differences between the countries that the company operates in, which include Indonesia, Thailand, and the Philippines.

“This became both a challenge and an opportunity for us, as we had to do our research to obtain a good understanding of the different needs and behaviours of MSMEs in these three countries, along with the different rules and regulations that apply in each respective market. Moreover, we also built positive relationships with the regulatory bodies that are responsible for fintech in each market, such as the Securities Exchange Commission in the Philippines and Thailand,” Gunadi explains.

“We are continuously committed to increasing our business performance sustainably in each market while keeping in mind our goal to empower the MSME sector as the backbone of the SEA economy. To do this, we have developed strong partnerships with local partners and stakeholders who are knowledgeable of each market’s behaviours and developed relevant strategic initiatives that answer the needs of MSMEs in each market.”

Gunadi gives an example of Investree Philippines’ partnership to launch an AI-powered credit scoring solution to increase accuracy and inclusiveness in assessing MSME players. Leveraging AI technology, Investree Philippines can now conduct extensive evaluations of potential borrowers, considering various data and factors beyond the traditional credit matrix.

Investree Thailand has also announced a collaboration with Thanachart Group subsidiary T Broker to maximise MSME credit access amidst the ongoing increase in interest rates in Thailand.

Also Read: Bank BRI-Investree partnership earmarks US$143M to support creative entrepreneurs in Indonesia

“Our various partnerships show how Investree is leveraging local knowledge and catering to the different needs of MSMEs in each market, which has also helped us in obtaining Series D funding from trusted investors as we continue to demonstrate our capabilities to create relevant solutions for MSMEs in various contexts,” Gunadi says.

“We are focusing our efforts on scaling our business in a sustainable manner instead of chasing unsustainable growth that will cost us in the future. We are committed to expanding our reach to more MSMEs in the region but still keeping our business growth efforts at a reasonable and sustainable level.”

So when it comes to building relationships with external parties, there is only one advice that Investree would like to share.

“We would advise other startups to build valued partnerships whenever possible to achieve things that would be difficult to do on their own. We believe that partnerships allow us to take advantage of each other’s strengths and bring more impactful results.

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Image Credit: Investree

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