Peer-to-peer (P2P) lender Funding Societies, also known as Modalku in Indonesia, has set its sights on profitability seven years after being in business, an executive said.
“Our number one focus in the company this year is profitability. We realise that, as a startup, we must move forward to make a profit. We need to see our fundamentals, to figure out how all of our employees work as productively as they can,” Arthur Adisusanto, the head of growth at Modalku, said.
According to Adisusanto, Modalku has planned to set up automation to maintain costs and refrain from making excessive hiring when business picks up. Besides manning growth at Modalku, Adisusanto is also in the process of taking on more responsibility for covering the Indonesian market.
The company did not disclose its headcount numbers, but its LinkedIn page showed the company has around 51 to 200 employees.
In a separate statement on Wednesday, Modalku said it disbursed more than 41.2 trillion rupiah ($2.7 billion) loans through 5.1 million transactions with small businesses in Indonesia, Singapore, Malaysia, Thailand, and Vietnam throughout 2022. This, according to the company, was a more than 40% jump compared with the previous year.
“The year 2022 was indeed a tough year for many industries across Indonesia or even the globe,” Reynold Wijaya, co-founder and CEO of Modalku, told reporters. “Many companies were not as lucky as we were.”
Modalku announced in February last year that it managed to raise $144 million in a Series C+ funding round and secure $150 million in debt lines from institutional lenders. The company also dipped into the banking industry by becoming a minority investor in Bank Index while acquiring local multi-finance company PT Buana Sejahtera Multidana and a Singapore-based online card payments startup CardUp.
Last year, Modalku also expanded into Makassar, a city on the Sulawesi Island in the eastern part of Indonesia. Both Adisusanto and Wijaya said the company will focus on growing its Makassar branch before moving on to another location in the archipelago.
Besides commended progress, Modalku is well aware of the current global gloomy scenario of rising interest rates, inflationary pressures, and other macroeconomic challenges. Iwan Kurniawan, Modalku co-founder and COO, said at DealStreetAsia’s PE-VC Summit 2023 last week that many startups are struggling to raise new funding amid a downturn in the P2P lending industry.
Being closely linked to the operations of small businesses that are vulnerable to an economic downturn, Modalku joined a list of P2P lenders struggling to maintain their TKB90 levels. TKB90 is a measure of loans settled successfully within 90 days of their due date. Modalku’s TKB90 was at 91.5% on Wednesday, compared with Investree’s 96.1% and Koinwork’s Koin P2P’s 94%.
DealStreetAsia has learnt that Kurniawan will be more focused on Modalku’s regional operations going forward. The company is still waiting for the Financial Services Authority’s (OJK) approval to make any announcement.
Additional reporting by Khamila Mulia.