INSUBCONTINENT EXCLUSIVE:
FinAccel, a Southeast Asia-based startup that offers a digital credit card service in Indonesia, has closed a $30 million Series B round as
it begins to consider overseas expansion.
The company launched its ‘Kredivo& service two years agoto help consumers pay online in
Southeast Asia, where credit card penetration is typically low,and it is essentially the combination of a digital credit card and PayPal
The service is available in Indonesia, Southeast Asia largest economy, where it uses a customer registered phone number — there is no
physical credit card — and a dedicated checkout on online retail websites.
For consumers, the service offers a 30-day payback option and
then more longer-term options of three, six and 12-month payback windows
The 30-day option is interest-free, but other plans come with a2.95 percentper month charge on the reducing principle, which effectively
makes it 25 percent flat.
FinAccel says it has credit scored close to two million consumers in Indonesia, while on the retail side it has
partnered with200 online sales platforms including large names such as Alibaba Lazada, Shopee (which is owned by U.S.-listed Garena), and
unicorn Tokopedia, which counts SoftBank and Alibaba among its investors.
This new investment, by the way, is a notable one for Southeast
Asia, which has generally been considered to have a gap in Series B funding, so $30 million for a two-year-old business is quite
something.
The round itselfis led by Australia&sSquare Peg Capital — in what is one of its highest-profile overseas deals to date —
alongside new investors MDI Ventures, which is affiliated with Telkom Indonesia, and UK-based Atami Capital
Existing investors Jungle Ventures, Openspace Ventures, GMO Venture
Partners, Alpha JWC Ventures and 500 Startups also took part in the
round.
FinAccel founders (left to right)Umang Rustagi (COO), Akshay Garg (CEO) andAlie Tan (head of product engineering)
The startup raised
a seed round of over $1 million in 2016, before quietly raising a $5 million Series A last year, FinAccelco-founder CEO Akshay Garg revealed
in an interview with TechCrunch.
Garg,who founded ad tech firm Komli, said the company is processing &hundreds of millions& in U.S
dollars per year and the immediateplan is to keep growing in Indonesia.Already, however, it is eyeing up potential expansions with its first
move overseas is likely to be in Southeast Asia in early 2018, although he declined to provide more details.
&Our goal is to become the
preferred digital credit card for millennials in Southeast Asia,& he told TechCrunch
&Those are consumers who are mobile-first and already bankable
The credit gap in this market is huge, there no electronic verification and other things that we take for granted in the West just don&t
work here.&
FinAccel isn&t going after the unbanked in the region, but it also isn&t going after banks either
Garg said that it is possible that the company might try to work with banks in the future in order to grow its market share and offer new
products.
One area it is looking at is financial products — such as loans for personal, educational and emergency purposes — but there
could be ways to leverage its online presence and adoption among young people and work with existing financial institutions, which
hebelieves simply aren&t equipped to reach out in the same way.
&We don&t see ourselves disrupting the banks, we are more partners,& he
&We could partner on balance sheet and onissuing credit cards to offer more efficient and seamless financial inclusion at best possible
