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Starts Operation, Modalku Thailand Receives Initial Funding from 500 TukTuk

Starts Operation, Modalku Thailand Receives Initial Funding from 500 TukTuk

Funding Societies (known as Modalku in Indonesia) announced the start of operations in Thailand, after obtaining a crowdfunding license from the Thailand Securities and Exchange Commission (SEC) in February 2021.

Starts Operation, Modalku Thailand Receives Initial Funding from 500 TukTuk

Simultaneously, the company obtained initial stage funding with an undisclosed amount of 500 TukTuk. Besides Modalku, another fintech company that is also working on the same opportunity in the regional arena is Investree.

In addition, there is Danacita which is already present in Thailand. 500 TukTuk is a venture capital part of 500 Startups that focuses on early-stage funding for startups spread across Thailand and CLMV (Cambodia, Laos, Myanmar, and Vietnam).

Country Head of Funding Societies Thailand Varun Bhandari said, the company’s vision is to always serve credit-worthy SMEs while growing wealth for investors.

“We believe that this will pave the way for Funding Societies to become the digital lender of choice for SMEs,” he said in an official statement.

Partner 500 TukTuk Krating Poonpol added, fintech is one of the rising industries that has grown exponentially in recent years.

Starts Operation, Modalku Thailand Receives Initial Funding from 500 TukTuk

Fintech Success in Southeast Asia due to Many Factors

In Southeast Asia, there are many successful fintech startups due to many different factors including its large market size, population size, established financial institutions, and businesses that are open to new technologies and innovations.

We see an opportunity for Funding Societies to grow exponentially with its capacity to solve the challenges faced by SMEs and startups in the region.

Since launching in Thailand, Funding Societies has funded local Thai SMEs and startups of up to more than THB100 million (approximately 42 billion Rupiah) at affordable prices, with no bad credit.

Also, partnering with Central Retail, NocNoc, Freshket, and Accrevo as institutional lenders. Funding Societies offer short-term financing to businesses, connecting them to retail and institutional clients seeking attractive alternative investment opportunities.

In Thailand, there are more than 3 million SMEs operating in various industries, and more than 60% of them have experienced a decline in income due to the pandemic.

Many of these SMEs do not have access to adequate funding from traditional financial institutions. As small businesses are the backbone of the economy, Funding Societies is committed to bridging the SME financing gap in the region.

They provide flexible loan products to meet working capital and expansion needs such as invoice financing, PO financing, project financing and term loans up to THB 50 million (approximately 21 billion Rupiah).

Starts Operation, Modalku Thailand Receives Initial Funding from 500 TukTuk

MSME Market in Southeast Asia

Based on a study by the Asian Development Bank entitled “Asia Small and Medium-Sized Enterprise Monitor 2020”, MSMEs accounted for an average of 97% of all types/scale companies, 69% of the total workforce, and 41% of the country’s gross domestic product (GDP). during 2010-2019.

The COVID-19 pandemic in 2020 exacerbated the already increasing global trade tensions and economic uncertainty in the region.

Indonesia is a country in Southeast Asia that has the largest number of MSMEs in the region with 64 million, followed by Thailand with 3.5 million, and the Philippines with 1.2 million MSME units.

MSMEs are a major and important force to drive the Southeast Asian economy. The number is 97% of the business world and absorbs 97% of the national workforce in the period 2010 to 2019. MSMEs also contribute an average of 41% of GDP for each country in the same period.

However, there are still many business actors who do not have access to financing. Many of them are considered ineligible to borrow from banks and have no credit history.

Fintech can make it easier for MSMEs to optimize the effectiveness and efficiency of business operations, as well as make it easier for MSMEs who do not have sufficient requirements to access banking financing, in accessing working capital financing.