Modalku Receives Series C+ Funding of More than 2 Trillion Rupiah
The Modalku Group announced a series C+ funding round of $144 million (approximately 2.06 trillion Rupiah) led by Softbank Vision Fund 2, with participation from VNG Corporation, Rapyd Ventures, EDBI, Indies Capital, Ascend Vietnam Ventures, and previous investors, such as Sequoia. Capital India and BRI Ventures.
On the occasion, the company also announced a new loan facility of $150 million (approximately 2.15 trillion) from financial institutions in Europe, the United States, and Asia.
This announcement follows a series C round worth $45 million earned between 2020 and 2021. In total, the company pocketed $189 million (approximately 2.7 trillion IDR). The funding raised will strengthen the company’s position as a leader in regional digital funding.
The funds will be used to manage expenses and improve B2B Payments services for MSMEs in Southeast Asia in order to become a neobank. The same strategy is also taken by KoinWorks for its next focus.
Management also said that $16 million (approximately 229 billion Rupiah) of this new funding will be used to contribute to the company’s stock options plan in the form of share repurchases, for former and current employees.
Commitment to Better Support MSMEs
In an official statement, Funding Societies Co-founder Reynold Wijaya said that Modalku is committed to being able to better support MSMEs, strengthen the company’s presence in Southeast Asia, and bring a greater positive impact to society.
SoftBank Investment Advisers Managing Partner Greg Moon added, “MSMEs in Southeast Asia have historically struggled to get access to loans from financial institutions, but they have been forced to rely on private funding to support their business growth.”
Modalku is here and bridges these entrepreneurs to access more funding that suits their needs.
Also, it is more affordable to build a data system that judges a business based on its performance and uses Artificial Intelligence (AI)-based technology to make the process more effective. “We are pleased to be able to support their mission of contributing to Southeast Asia by funding viable but underserved MSMEs,” said Moon.
Focus on SMEs
The Modalku Group, which was founded in 2015, seeks to solve the main challenges of MSMEs that hinder their growth, starting from the existence of a financial gap of $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.
Modalku service is here to offer loans of up to IDR 2 billion which can be disbursed within 24 hours, so that it becomes a solution for MSMEs to face challenges related to access to capital for businesses.
Currently the company is positioning 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.
A recent study using methodology from the Asian Development Bank, revealed that MSMEs supported by the Modalku Group contributed USD 3.6 billion (approximately Rp 51.6 trillion) to GDP in Southeast Asia.
After seven years, the Modalku Group currently has licenses in four ASEAN countries, namely Singapore, Indonesia, Malaysia, Thailand, and is already operating in Vietnam.
Modalku has disbursed more than IDR 29.4 trillion in business funding to more than 4.9 million MSME loan transactions. The company has expanded its financial services beyond lending and plans to expand to more locations in Southeast Asia in the next 12 months.