Funding Societies raises US$25 Million in over-subscribed Series B funding led by SoftBank Ventures Korea

Largest funding round raised by a digital lending platform in Southeast Asia, in addition to credit lines from banks and financial institutions.

Singapore, 18 April 2018 – Leading SME Digital Financing platform Funding Societies (also known as Modalku in Indonesia), has raised USD 25 Million in Series B funding. Led by SoftBank Ventures Korea, the funding round also includes existing investors Sequoia India, Alpha JWC Ventures (Indonesia) and Golden Gate Ventures. Qualgro and LINE Ventures also participated in this over-subscribed round. Additionally, the platform has raised credit lines from banks and financial institutions to further support SMEs. This fundraise, the largest by a digital financing platform in Southeast Asia, will help realize Funding Societies’ vision of financial inclusion for Southeast Asia.

SoftBank Ventures Korea, an early stage venture capital arm of SoftBank Group famous for its US$ 100B Vision Fund, invested the lion share in this round of funding. SoftBank Group has also funded large alternative lenders like SoFi and Kabbage in US, as well as tech giants like Grab in Southeast Asia. “SoftBank Ventures Korea has been actively investing across Southeast Asia. SME digital lending across Southeast Asia is where we saw a huge growth potential. Among many players, we were most impressed with Funding Societies with what it has achieved in the short period of time and its potential to continue to become no. 1 player,” said Sean Lee, Partner and Managing Director, SoftBank Ventures Korea.

Funding Societies, which was founded by Kelvin Teo and Reynold Wijaya in 2015, is a digital lending platform that connects small and medium-sized enterprises ("SMEs") in Singapore, Indonesia and Malaysia with retail and institutional lenders. In January 2018, the platform crossed the SGD$100 million mark in funded SME loans, which marked a 300% growth of its loan book since the same period in 2016. This, while maintaining a default rate of less than 1.5%. The platform has also increased its lender base beyond 60,000 in less than 3 years of operation.

From a recent study conducted by Ernst & Young, UOB as well as Dun & Bradstreet, 65.2% of the SMEs in Southeast Asia do not have easy access to business financing. Funding Societies addresses this gap by providing fast and flexible funding for the growth of local SMEs. 67.8% of the surveyed businesses were also open to non-traditional financing options like Digital Lending.

“Being in a trust-based industry, we’re grateful for the confidence bestowed by our lenders, SMEs, team, partners, regulators, as well as early and new marquee investors. We will continue to enable growth for SMEs and create wealth for lenders. As for us, this is not a business, but a mission, to make a positive impact in our home countries across Southeast Asia,” said Kelvin Teo, Co-Founder and CEO of Funding Societies.

With relentless focus on technology and design to improve the lives of borrowers and lenders, Funding Societies has set several firsts in the industry. It was the first platform to introduce e-signing of contracts, auto investment algorithm for lenders and launch mobile app for borrowers and lenders. It was also the first digital lending platform to launch in Malaysia.

Sequoia India, which led the Series A, remains steadfast in Funding Societies.

“Sequoia India often invests very early – but not often in founders that are still in business school. And yet, Kelvin and Rey received a term sheet the month they graduated from Harvard. In those early days, we suggested they focus on the fundamentals: technology, product, risk management, and maintaining a high-quality loan book. They executed in all these areas with integrity and vision, and we believe these character traits will help them build Funding Societies into a large, enduring company,” said Pieter Kemps, Principal, Sequoia Capital (India) Singapore. 

Other investors with complementary capabilities also participated. Vinnie Lauria, Managing Partner of Golden Gate Ventures, most notable for their early investment in Carousell, commented, “We invest in disruptive technologies. Funding Societies uses machine learning on a large number of data points to identify opportunities that traditional banks would overlook. This leads to smarter financing decisions and higher-quality SMEs on their platform. Their loans are funded within minutes.”

Qualgro, a young but promising fund, is founded by Heang Chhor a former senior partner at McKinsey & Co, while his colleague Jason Edwards formerly from Baker & McKenzie has significant experience in alternative investment. “Funding Societies has built a market leading tech platform to provide Southeast Asian SMEs with fast and user-friendly access to credit, something that banks are not always able to provide. We’re delighted to support the team, who bring together deep credit expertise with a great user experience for lenders and SME borrowers,” stated Heang Chhor, Managing Partner, Qualgro.

Funding Societies has earned many local as well as global awards and accolades in 2017. At the end of 2017, its Indonesian entity Modalku won the Global SME Excellence Award from United Nations’ ITU Telecom. It is the first and only Asian startup to win the award. The company was also included in CB Insights’ Fintech 250, a select list of the top FinTech companies around the world working on ground-breaking financial technology. It also won the Best in Customer Experience Asia award from Retail Banker International and was conferred as the Hottest Startup In Singapore by Singapore Business Review. The awards reflect local as well as global recognition of FinTech solutions’ positive impact on the society.

About Funding Societies
Founded in early 2015, Funding Societies is a licensed digital lending platform that connects small and medium-sized enterprises ("SMEs") with retail and institutional lenders. It has achieved numerous milestones in a short span of time, including USD 25 million Series B funding round led by SoftBank Ventures Korea and supported by Sequoia India, Alpha JWC Ventures and Golden Gate Ventures. Funding Societies has expanded into Indonesia (where it is known as Modalku) and Malaysia, becoming one of the largest digital lending platforms in the region. Through its searing growth, Funding Societies and Modalku remain dedicated to the vision of funding underserved MSMEs and improving societies in Southeast Asia.

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Vikas Jain 
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Funding Societies is Southeast Asia's leading SME digital financing platform. We specialise in all forms of short-term financing for SMEs, funded by individual and institutional investors. We pride ourselves in speed and flexibility, offering the widest range of term loan, trade finance and micro loan products. Backed by SoftBank Ventures Asia Corp and Sequoia India, amongst many others, Funding Societies has helped to finance over S$2 billion in business loans regionally. We are dedicated to the vision of enabling SMEs through equitable financial access, ultimately making a positive impact for our societies in Southeast Asia.

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