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humble and medium - sized enterprises ( SMEs)account for nearly 50 % of Southeast Asia ’s GDP , impart to problem creation , innovation , and overall economic expansion . Nevertheless , as in other parts of the world , SMEs in Southeast Asia face challenge when it hail to sufficient working capital . In a nutshell , SMEs are typically deemedtoo riskyfor traditional bank to lend to them , so those banks charge high pace , if they approve them at all .
Kelvin Teo and Reynold Wijaya , two entrepreneurs from Southeast Asia who assemble while both were getting postgraduate degrees at Harvard Business School ( HBS ) , were acutely aware of that gap back place . Inspired by HBS’stated missionto “ make a difference in the world , ” they set out to speak it .
“ We had grown up as underdog , feel inner to be at HBS and wanted to pay up it forward to Southeast Asia , ” Teo said in an interview with TechCrunch . “ SMEs resonate with us and financing is their biggest botheration point . ”
Their startup , Funding Societies , is a Singapore - based SME loaning weapons platform with licensed and file authority in Indonesia , Malaysia , Thailand , and Vietnam . On the back of strong growth across the part — to engagement it ’s loan more than $ 4 billion to over 100,000 businesses — the fintech startup has been on a funding bout , too , most recently elevate $ 25 million in fairness .
The investment come from a single investor : Cool Japan Fund ( CJF ) , Japan ’s sovereign riches investment trust . Notably , this marks the fund ’s first investiture in a fintech company in Southeast Asia .
The late funding bring the sum raised by Funding Societies to some $ 250 million in equity . Investors have included strategic backers such asKhazanah Nasional BerhadandMaybank , which put in $ 40 million less than a year ago , as well as SoftBank Vision Fund 2 , CGC Digital , SBVA ( previously SoftBank Ventures Asia ) , Peak XV Partners ( formerly know Sequoia Capital India ) , and Alpha JWC Ventures , among others .
Funding Societies was founded in Singapore in 2015 on the back of the two laminitis ’ corporate backgrounds . Teo antecedently worked at Accenture , McKinsey , and KKR Capstone , while Wijaya had experience in a family business sector in Indonesia . After decide to make a job to work with SMEs , the duo spent around three years researching the most groundbreaking society in the U.S. , analyzing their journey to the top .
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The company say that it has loaned more than $ 4 billion in business sector funding to appointment to around 100,000 SMEs across its five southeastern Asian country . This is up from$3 billion in April 2023 . to boot , it has engender an annualized payment gross transaction value ( GTV ) of more than $ 1.4 billion since expanding into its payments business in 2022 .
The inauguration plans to use the money to expand its primary focus , providing financing services faster to SMEs in Singapore , Indonesia , Malaysia , Thailand , and Vietnam . It is also enthrone in AI to digitise and automatise the lending software mental process and grow its defrayment business , which was found in 2022 .
On top of that , through a partnership with CJF , it will proffer fiscal services to back Japanese company that are already mesh job , or looking to enlarge their presence in Southeast Asia , or entering unexampled market in Southeast Asia , Teo recount TechCrunch .
The startup leave a broad range of financing selection , including term loanword , micro - loans , receivable / collectible funding , revolver loan , and asset - backed business loans , roll from $ 500 to $ 2 million , to meet the diverse needs of business at unlike stages . Many companies use the pecuniary resource for make capital or as bridge deck loanword to scale up .
One of the things that sets the startup apart from competitors like Validus and Bluecell Intelligence is that it offers a one - stop shop serve , from short - term financing to supply chain funding , via online and offline channels and partnerships , and defrayal offerings , according to the ship’s company chief operating officer .
Revenue from digital financial services in Southeast Asia is carry to resurrect , with digital loaning leading the way and make up about 65 % of the total revenue , according to ane - Conomy SEA Report 2024 .
Since a gigantic $ 144 millionSeries C+ funding roundled by SoftBank Vision Fund 2 in February 2022 , the Southeast Asia SME loaning market has importantly consolidate , making the startup even substantial as a market leader , arrogate Teo .
Ironically , one company ’s crisis could become Funding Societies ’ gain . Teo said the company expects more integration among fintechs focusing on credit in Southeast Asia . That is because many company are getting to the end of their runway and ineffectual to upgrade more money in the still - slugging SEA funding clime . Those that have focused on single country are especially vulnerable , he tally .
“ Since SoftBank Vision Fund ’s investment in February 2022 , the macro market has changed considerably , with U.S. banks collapsing , impacting cite supply to non - bank loaner , ” Teo severalize TechCrunch . “ U.S. rate cost increase have also raised the toll of funds . ” Up until September , the macro market face a 23 - year period of rate hikes , and geopolitics have hurt SMEs and raised non - performing loans , he added .
In this challenging period , in December 2022 , the company made its first acquisition : redwood - backed payments fintech CardUp . This almost tripled its revenue while maintaining its head count almost flat . Teo note also that the inauguration made investments in three companies in the period , including a fintech company and a startup specializing in POS software .
A social and economical wallop report that the inauguration join forces on with the Asian Development Bank ( ADB ) in 2020 found that Funding Societies - game MSMEs impart $ 3.6 billion to GDP and created approximately 350,000 young jobs . In increase , it help SMEs encourage their receipts by 13 % through ready disbursal and a simple lotion process , according to the company .
