JAKARTA (TheInsiderStories) — Komunal, an online peer-to-peer (P2P) lending company based in Surabaya, has secured an undisclosed amount of seed funding led by East Ventures, said the company today (12/03). A local venture capital firm, Skystar Capital, also participated in the funding round.
It said, the investment will accelerate Komunal’ mission to bridge the funding gap much-needed by the growing population of underbanked micro small medium enterprises (MSMEs) in Indonesia. Based of official data, Indonesia’ MSMEs’ credit gap reached Rp1,000 trillion (US$71.43 billion) per year despite the massive growth of its banking and micro-finance sectors.
The gap is even more apparent outside Greater Jakarta. However, the country has a substantial and growing mobile phone user base, most of whom are already used to e-commerce and ride-hailing apps. This opportunity prompted Hendry Lieviant, ex-Goldman’ credit analyst, to start Komunal together with Rico Tedyono and Kendrick.
Lieviant, the Co-founder of Komunal, commented, “MSMEs is the backbone of Indonesia’ economy, contributing to more than 60 percent of GDP and 95 percent of employment.”
Only in eight months of operations, Komunal has channeled around Rp50 billion of loans to MSMEs, mostly East Java area. Kendrick Winoto, Co-founder of Komunal, explained, “This is only the beginning, and we are excited to expand our network to serve more cities in East Java, as well other provinces that are still relatively untouched next year.”
Indonesia FinTech Lending scene itself has seen explosive growth in the past three years. As of June 2019, Financial Service Authority recorded that the P2P loan transaction reached Rp45 Trillion on a cumulative basis, up 97.7 percent from December 2018.
Willson Cuaca, Managing Partner of East Ventures says, “Komunal shares East Ventures’ mission of financial inclusion for the country.”
Recently, East Ventures said sill eyeing more than 10 companies to fund until the end of this year. To date, the Southeast Asian venture capital has supported more than 300 startup and develop more than 160 startups, including two Indonesian unicorn startups of around $4 billion.
“The start-up criteria invested by East Ventures is to have a solid founding team in the market with great potential, “said Batara Eto, Managing Partner of East Ventures on Oct. 8 by adding East Ventures is open to all vertical start-up and early-stage funding.
In 2019, the company will focus on new retail, e-commerce enabler, FinTech, and digital solutions for small and medium enterprises. However, he did not specify the total investment that had been disbursed to the start-ups. Likewise, the start-up target will be invested until the end of this year.
Last year, the firm also cemented its commitment to continuously support its portfolio companies and to build the digital infrastructure of Indonesia with the launching of its $200 million joint growth fund, EV Growth.
Two months ago, East Ventures announced has closed its sixth fund at $75 million, with support by prominent startup founders helping to surpass the fund’s initial $30 million targets.
Those investors include Facebook co-founder Eduardo Saverin, Alibaba co-founder Eddy Wu, Meituan-Dianping chief executive Wang Xing, Dianping founder Zhang Tao, and Razer Inc co-founder Kaling Lim. Institutional investors include Temasek, the Singapore government-owned investment firm, Pavilion Capital and Adams Street Partners.
The prominent family-controlled Sinarmas, Triputra and Emtek groups also joined in. Earlier this year, East Ventures and Sinar Mas Digital Ventures (SMDV) duet injected a startup of Fore Coffee worth $8.5 million.
Cuaca asserted: “We are overwhelmed by the support given by our investors and decided to expand, but hard limit, the fund to $75 million. We could have raised more but we wanted to maintain certain disciplines in this euphoria era. We saw more money than good startups.”
With the new fund, the firm cemented its commitment to continuously support the Southeast Asian startup ecosystem, particularly Indonesia. Leveraging on its local expertise, the firm will stay bullish to provide Seed to Series A funding for startups from all sectors and industries.
In years, East Ventures had invested in South-east Asian unicorns Traveloka, Tokopedia, Grab, Gojek, and ShopBack. It was recently named by Preqin as one of the world’s most consistently top-performing venture capital fund managers based on fund returns as in the third quarter of 2018. Its biggest exit was from online-to-offline startup Kudo, which Grabs acquired in a deal reportedly worth more than $100 million.
The participation in the sixth fund has been driven by the success of the previous 3 funds with 30 notable exits including Disdus’ exit to US-based Groupon back in early 2011 that happened after just less than one year of investment. In 2017, East Ventures-backed companies were acquired by two Southeast Asian unicorns, Grab acquired Kudo and Gojek acquired Loket.
In 2018, a successful SaaS company merger and acquisition happened through Sleekr acquisition to Jurnal and Talenta, which are both East Ventures’ portfolios. In 2019, another East Ventures’ portfolio company Bridestory was acquired by Indonesia based unicorn Tokopedia.
Established a decade ago, the funder is the VC pioneer in Indonesia managed by Cuaca, Eto, and Taiga Matsuyama. Through the sixth fund, East Ventures has invested in multiple new verticals: SME inclusion, new retail, fintech, news and media, healthcare, supply chain, and digital transformation. This includes investment into Wahyoo, Stockbit, AllSome Fulfillment, Katadata, Cicil, Mekari, Kedai Sayur, Advotics, The FIT Company, Nalagenetics.
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