Singapore's Funding Societies raises $144 mln in SoftBank-led equity round
SINGAPORE, Feb 16 (Reuters) - Funding Societies, a Southeast Asian digital financing platform, has raised $144 million equity in a funding round led by SoftBank Group Corp's (9984.T) SoftBank Vision Fund 2, as it expands in one of the fastest growing digital markets.
In a statement on Wednesday, the Singapore-based firm said other new investors included Vietnamese tech group VNG Corp. It also received $150 million in debt lines from institutional lenders, some of which have been drawn down since 2021.
The seven-year-old company, whose main market is Indonesia, focuses on micro, small and medium enterprises, offering loans from $500 to as much as $1.5 million. It said it has disbursed more than $2 billion in business financing.
The COVID-19 pandemic has spurred a boom in Southeast Asia's internet economy, with many digital lenders scaling up their businesses as they capitalise on the growing funding needs of micro, small and medium enterprises in the region.
In the region's 650-million population, millions of small entrepreneurs are "under banked" or "unbanked" due to insufficient credit history and cumbersome requirements.
Funding Societies, which calls itself the biggest player in a highly-fragmented regional market, recently expanded into Thailand and Vietnam, and is rolling out new business lines.
"The three biggest funding sources for small firms are personal savings, if you're lucky to have, and friends and families, and banks," Kelvin Teo, co-founder and group chief executive officer of Funding Societies, told Reuters.
"We expect the financing business to be subsidising our new businesses," said Teo, who along with his Harvard classmate Reynold Wijaya, came up with the idea to set up Funding Societies while they were studying at the U.S. business school.
The company, recognised as Modalku in Indonesia, also works with banks and other financial firms to disburse loans on its platforms, and had default rates of 1-2%, Teo said.
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