Kredivo secures US$30mil in Series B funding

• Funds will be used to build out new product lines, expand in SEA, and on talent acquisition
• Latest funding round is the largest raised by an Indonesia-based fintech firm this year

INDONESIA-based fintech startup Kredivo raises US$30 million (RM121.82 million) in a Series B equity investment round led by Square Peg Capital, with participation from new investors MDI Ventures and Atami Capital, and existing investors Jungle Ventures, Openspace Ventures, GMO Venture Partners, Alpha JWC Ventures, and 500 Startups.

Operated by fintech company FinAccel, Kredivo functions like a digital credit card, enabling consumers without a credit card to shop online on credit and pay later in instalments.

FinAccel chief executive officer Akshay Garg says that the company intends to use the new funds to build out new product lines, expand geographically within SEA, and on talent acquisition; aiming to be a digital credit card provider to Southeast Asia (SEA)’s millennials.

“There is a chance for us to expand use cases in terms of products such as education or emergency loans. For geographical expansion, we are eyeing countries such as the Philippines, Thailand, and Singapore but are definitely still evaluating the market.

“For talent, we aim to double our current team of engineers and data scientists within this year. Now, we have 180 employees including approximately 120 collection agents and 60 to 70 office employees.”

Kredivo’s latest funding round is the largest raised by an Indonesia-based fintech firm this year, exceeding the US$25 million Series B funding secured by Modalku (Funding Societies) earlier in April.

Square Peg Capital partner Tushar Roy said, “Kredivo is helmed by high integrity, experienced founders, who are motivated to solve massive pain points for Indonesian merchants and consumers, and in doing so, drive the growth of overall economy. We are very excited to support the team’s vision of enabling financial services for Indonesian and SEA millennials.”

Kredivo charges no interest for loans on a 30-day term and 2.95% for payment-terms between three to 12 months with transactions from three million rupiah (US$207) to 20 million rupiah (US$1,380).

Garg says that the company has managed to set the NPL rate at under 5% by integrating full automation into its credit-scoring feature and enhancing collection methods.

“We use AI and machine learning technology for credit scores and approve consumers in real-time (within five minutes to a few hours) and we also utilise a desk collection system.”

Founded about two years ago, Kredivo now has 500,000 approved users, has credit scored nearly two million e-commerce consumers, and is available at 200 merchants including Tokopedia, Shopee, Bukalapak, and Lazada.

It also works closely with PT BFI Finance Indonesia Tbk (BFI), 15 credit funders, and other institutional lenders as a source of funds. Kredivo is officially registered as a peer-to-peer (P2P) lending platform supervised by Indonesian Financial Services Authority (OJK).

Garg says that he has seen transaction value and user base grow five times in the past two years.

“The key drivers are the fact that 80% of our monthly users are return users, automation in credit scoring, distribution channels, and quality of talent.”

He explains that the company has opted to have small team of high quality talent and this is also a challenge.

MDI Ventures chief executive officer Nicko Widjaja says, “Kredivo is the first lending tech company in our portfolio. It is the leader in Indonesia, with the most advanced credit scoring technology that we have seen so far in the market. We also like that Kredivo offers fair, transparent rates without any hidden fees or gimmicks.

“With our participation, we hope to push further into the under-served market segments while leveraging on Kredivo’s key strengths around technology automation and fair pricing.”

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