Jakarta, Gizmologi – The Modalku Group, called Funding Societies officially announced that it had raised USD 144 million in its Series C+ funding round which attracted the attention of many investors. Modalku is a digital funding platform for Micro, Small and Medium Enterprises (MSMEs) originating from Indonesia.
Funding was led by SoftBank Vision Fund 2, with new investors including VNG Corporation, a technology giant from Vietnam, Rapyd Ventures, Asia-based global investor, EDBI; Indies Capital, K3 Ventures, and Ascend Vietnam Ventures.
The company also received a USD 150 million loan facility from institutional lenders in Europe, the United States and Asia which has been partially disbursed since 2021. This funding follows a Series C round of USD 45 million raised between 2020 and 2021.
Modalku Group Plans to Expands Southeast Asia Market
The funding raised strengthens the Modalku Group’s position as a leader in regional digital funding. The funds will be used by the company to manage expenses and improve B2B payments services for MSMEs in Southeast Asia. USD 16 million of this new funding will be used to contribute to the company’s stock plan options (in the form of share repurchases) for past and current employees.
Modalku Group was founded in 2015 by Kelvin Teo and Reynold Wijaya who graduated from Harvard Business School to empower MSMEs in Southeast Asia. The Modalku Group seeks to solve the main challenges of MSMEs that hinder their growth, starting with the existence of a financial gap of USD 300 billion in the Southeast Asia region.
Although almost 99% of all businesses in Southeast Asia are small businesses, in fact, MSME actors face many obstacles in obtaining business loans from conventional financial institutions due to the lack of a credit track record or collateral to guarantee. The Modalku Group is here to offer loans of up to IDR 2 billion that can be disbursed within 24 hours, thus becoming a solution for MSMEs to face challenges related to access to capital for businesses.
The Modalku Group has distinguished itself as a one-stop-shop in MSME funding so that it no longer uses the traditional supply chain approach to achieve financial inclusion but uses an Artificial Intelligence (AI)-based credit model and uses the added value of its products to reach underserved businesses.
After seven years, the Modalku Group currently has licenses in four ASEAN countries, namely Singapore, Indonesia, Malaysia, Thailand, and is already operating in Vietnam. To date, the Modalku Group has channeled business funding of more than Rp 29.4 trillion to more than 4.9 million MSME loan transactions in Southeast Asia.
Funding Societies Co-founder | Modalku, Reynold Wijaya, said that after successfully proving credit capability during the unprecedented financial crisis, Modalku will expand its business to neo banking.
“We are committed to being able to better support MSMEs, strengthen our presence in Southeast Asia, and bring a greater positive impact to society,” he said.
Meanwhile Greg Moon, Managing Partner of SoftBank Investment Advisers, added that MSMEs across Southeast Asia have historically struggled to access loans from financial institutions, but have instead been forced to rely on private funding to support their business growth.
“The Modalku Group is here and bridges these entrepreneurs to access funding that is more suitable for their needs and more affordable by building a data system that assesses a business based on its performance and using Artificial Intelligence (AI)-based technology to make the process more effective. We are pleased to be able to support the mission they contribute to Southeast Asia by funding viable but underserved MSMEs,” said Greg.
Modalku Group’s annual funding has exceeded USD 1 billion in Q4 2021. In addition, part of the loan facility funded by the Modalku Group comes from European-based institutional lenders. Since 2019, the Modalku Group has expanded its financial services beyond lending and plans to expand to more locations in Southeast Asia in the next 12 months.