JAKARTA (TheInsiderStories) – Investree, an Indonesian local startup providing peer-to-peer (P2P0) lending marketplace, will receive US$10 million worth of Series B funding from some local and foreign venture capital firms, a source who are close to the deal said.
The funding round will be lead by a local venture capital firm PT Mandiri Capital, joint concert with Convergence Ventures, a technology venture fund that invests and accelerates early stage technology companies in Indonesia. There are also an undisclose Chinese investor and a local venture capital firm Kejora.
In 2016, Investree has secured a series A funding from Kejora which typically invest US$2 to US$5 million in their portfolio firms. Before securing the funding commitment, the company has been bootstrapping for almost a year, raising $500,000 for its initial stage development.
Adrian Gunadi, Co-founder and CEO of Investree and Adrian Li from Convergence Ventures refused to comment on the deal, citing a confidentiality agreement between his company and the investors
According to him, the startup company eager to expand its business to Southeast countries such as Vietnam, Thailand or Philippine. He admitted, currently his company in talks with one peer to peer lending firm in Vietnam to form a joint venture capital in the country.
The reason the financial technology (FinTech) firm enter those countries cause the financial inclusion is still limited and still attractive for small and medium enterprises (SME) lending. SME’s lending in Vietnam has reached US$4 million since January of 2018 and has huge potential to grow in the future, he said.
This year, Investree looking to disburse loan Rp1 trillion ($72.99 million) from last year Rp500 billion. To reach this year targets, Gunadi commenting, his company will rise as more partnerships into various market place like Tokopedia, Lazada and others.
Founded in 2015, Investree connects lenders with borrowers who loan to invest for returns as well as those who require funds for personal use or funding businesses. The startup has managed to disburse loans with an average funding period of five days and a 17.5 percent average rate of yield.
Investree connects lenders with borrowers – those that want to invest their money to get returns and those who need funds for personal use or businesses. The company offers lending solution for both business financing and employee loan.
Gunadi himself is not a new name in the Indonesian banking industry. He was a director of retail banking at Bank Muamalat, managing SMEs, consumer, liabilities and e-banking across 400 branches. A trained banker, he holds a bachelor degree from Faculty of Economics in University of Indonesia and an MBA from Rotterdam School of Management.
Indonesian Financial Services Authority (FSA) has estimated that the actual needs of business financing in the country would be around Rp1,600 trillion. In reality, only Rp600 trillion could be disbursed every year through banking, capital market, and multi finance.
The disparity is further shown in the fact that only 11 million out of 60 million SMEs could get loans from the banks. Sixty per cent of that figure are based in the Java island.
A recent report by Oliver Wyman and Modalku reveals that Indonesia will see a $54 billion small and medium enterprises financing gap by 2020, with more than 57 million potentially bankable micro businesses.
Globally, the FinTech industry has been progressing very fast. In the past two years, this phenomenon has also been seen in Indonesia. Shifting people’s preferences on digital services with utilizing the use of computer technology, mobile phones, smart-phones, and the use of mobile internet has fueled the development of the FinTech industry in Indonesia.
In response to these developments, FSA have formed Task Force Development of Financial Innovation, and published Guidelines for Fintech industry players.
President Joko Widodo has target the e-commerce transactions in Indonesia will reach $130 billion by 2020. Recently, the government altered regulations to allow more foreign investment in this sector to attract more capital into e-commerce business in the country.