The buy-now-pay-later platform, which gives retail borrowers instant credit financing for e-commerce purchases and personal loans in real-time, is the fastest-growing in the country.
Westpac-backed venture capital fund Reinventure has joined a $90 million funding round for the owner of Indonesia's Kredivo, the bank announced last week in a press release.
The investment in Singapore-based FinAccel, part of a funding round led by Asia Growth Fund (a joint venture between Mirae Asset and Naver) and Square Peg, is Reinventure's third investment in Asia, following stakes acquired in India credit platform Zest and Singapore co-living operator Hmlet in 2019, the release noted.
Singtel Innov8, the venture capital arm of the Singtel Group, also participated in the funding round. This brings Kredivo's funds raised to more than $200 million in debt and equity, and $140 million in equity to date. The firm said it would use the funds to «double down» on Kredivo’s growth and expand its financial services range.
Booming Digital Lending Industry
Indonesia has the region’s largest internet economy, which is on track to cross $130 billion in gross merchandise value by 2025, up from $40 billion in 2019, according to the «e-Conomy Southeast Asia Report 2019». However, it is also one of the most credit-starved in Asia, with less than 3 percent of its population having a credit card and less than 5 percent with access to unsecured credit from banks. This has led to a booming digital lending industry and a proliferation of online lenders that disburse loans through personal finance apps.
«Access to credit is a huge problem for Indonesian millennials, and we are solving for it through convenience, transparency and fairness,» said Kredivo co-founder and CEO Ashkay Garg.
His firm's payment option is integrated with major e-commerce platforms like Lazada and Shopee, as well as food delivery services like Deliveroo, allowing customers to get an interest-free loan of up to $2,200 for 1 month, with an interest rate of 2.95 percent thereafter. Kredivo has already amassed 1 million customers and has seen 300 percent annual growth.
