Southeast Asian online lending platform Funding Societies, popularly known as Modalku in Indonesia, has announced raising $27 million in debt funding from institutional investors led by Asia-focused private credit financier AlteriQ Global.
Multi-family office Aument Capital Partners and sustainability-focused fund Orange Bloom also invested in the debt funding, which will be used to support SMEs in the five markets that Funding Societies operates in through its range of financing solutions.
Founded in 2015 by Teo and Reynold Wijaya, Funding Societies is licensed in Singapore, Indonesia, and Thailand, registered in Malaysia, and operates in Vietnam.
It seeks to bridge the region’s $300-billion financing gap to help small businesses get the required support they lack from traditional financial institutions.
“Amid uncertain macroeconomic conditions, we continue to deepen our financing propositions across our five markets for more underserved SMEs, alongside existing and new partners,” said Teo, who is also the company’s CEO.
Funding Societies offers microloans from $500 to $1.5 million that can be disbursed within 24 hours, suitable for small businesses looking to manage their cash flow.
The company targets the more than 70 million businesses in Southeast Asia that are categorised as MSMEs. According to the United Nations Capital Development Fund, 39 million of these MSMEs in the region still face challenges in financing, resulting in the $300-billion gap.
Funding Societies said it has achieved over $3.2 billion in business financing, processed more than 5 million transactions, and served about 100,000 SMEs across the region.
The company is backed by SoftBank Vision Fund 2, SoftBank Ventures Asia, Sequoia Capital India, Alpha JWC Ventures, SMBC Bank, BRI Ventures, VNG Corporation, Rapyd Ventures, Endeavor, EBDI, SGInnovative, Qualgro, and Golden Gate Ventures, among others.
In 2022, Funding Societies raised $144 million in its Series C+ round and $150 million in debt to fuel its regional expansion. The round was anchored by SoftBank Vision Fund 2. Previously, it raised $45 million in Series C funding between 2020 and 2021.
The company posted a revenue of $0.94 million in 2022, up about 21% from a year earlier. Its losses, however, widened 13.18% to $6.47 million last year from $5.71 million in 2021, according to data accessed by DealStreetAsia DATA VANTAGE.
Its total assets surged 70.21% to $14.82 million, while its liabilities stood at $2.4 million in 2022.