Partners for Growth seals debut Indonesia venture debt deal

The credit line, which can be drawn down on-demand, will be used to support the expansion of the company’s loan book. It will also bring diversification to funding streams that are predominantly domestically originated. Kredivo claims that its transaction value and loan book have been growing at 40% and 35% per quarter, respectively, over the past 18 months.

Kredivo is operated by FinAccel, a Singapore-based financial technology business that has previously received equity funding from the likes of Square Peg Capital, MDI Ventures, Jungle Ventures and Openspace Ventures. Square Peg led the company’s $30 million Series B in July 2018.

The Kredivo platform serves as a digital credit card, offering access to instant credit financing for online and offline purchases as well as personal loans. Credit checks are conducted in real time. Indonesia is one of the most credit-starved countries in Asia, with less than 3% of its population in possession of a credit card and under 5% having access to unsecured credit from banks.

Digital lending has grown rapidly to fill the gap, but Kredivo differs from most start-ups in that it doesn’t rely on peer-to-peer lending. Prior to investing in the company in 2017, Jungle identified 200 businesses in China with the same model, of which 50 had VC investors. In India, 20 out of 43 comparable businesses had financial sponsors. Kredivo was the only company of its kind in Southeast Asia, although competitors have since emerged.

“We have invested in a unique company that matches our values of fair and sustainable financial inclusion. Kredivo is one of the lowest cost lenders in the market and has one of the best risk metrics that we have come across, yet it is also one of the fastest growing. We are very pleased to anchor our first investment in this region with a team and business of this caliber,” said Jason Georgatos, a partner at PFG, in a statement.

PFG was established in 2004 by members of Hambrecht & Quist's venture lending business, with support from Silicon Valley Bank (SVB). It primarily focuses on venture capital funding for late-stage technology and life sciences companies, offering growth capital lines of credit, term loans, and convertible debt loans. PFG is active in Australia and has previously provided funding to Yello Digital Marketing, the digital marketing unit of South Korean mobile internet company Yello Mobile.

The firm’s rationale for entering Asia was that once stakeholders in the innovation ecosystem recognized the advantages of the asset class – in allowing companies to raise capital without diluting the equity stakes of existing shareholders – being an early mover would start to pay off.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Southeast Asia
• Financing
• Early-stage
• Financials
• Technology
• Indonesia
• venture debt