Funding Societies raises $294m to fuel expansion plans in SEA

By Leandra Monteiro

Funding Societies (which goes by Modalku in Indonesia), a SME digital financing platform, announced that it has raised $144 million in an oversubscribed Series C+ equity round led by SoftBank Vision Fund 2, with new investors notably Vietnamese tech giant VNG Corporation, Rapyd Ventures, Asia-based global investor EDBI, Indies Capital, K3 Ventures, and Ascend Vietnam Ventures.

The company also received US$150 million in debt lines from institutional lenders across Europe, the United States, and Asia, some of which have been drawn down since 2021. This comes on the back of its $45 million Series C raised between 2020 and 2021.

Co-founder and Group CEO, Kelvin Teo, said, “We’re honoured by the faith of our new and existing shareholders. We started Funding Societies | Modalku to empower SMEs by solving their biggest problem, access to financing, especially unsecured financing. A common misconception is that we compete with banks. The reality is we ‘compete’ with savings, friends and families, and personal credit cards. There is a huge unsecured financing gap because it takes patience and focus, or you risk losing a lot of money. Having proven our AI-led credit capabilities in an unprecedented financial crisis, we look to serve SMEs even better with neobanking and deeper regional presence in Southeast Asia.”

“SMEs across Southeast Asia have historically struggled to access institutional finance and instead been forced to mainly rely on personal funding to support growth”, said Greg Moon, Managing Partner at SoftBank Investment Advisers. “Funding Societies is establishing a bridge for these companies to access more sustainable and cheaper financing by building unique data sets on their performance and using AI-led technology to assess their creditworthiness more effectively than traditional models. We are delighted to partner with Kelvin Teo and the team to support their mission to improve societies in Southeast Asia by funding worthy and underserved SMEs.”

Funding Societies’ annualised loan origination has exceeded US$1 billion in Q4 2021. Separately, a portion of the Group’s outstanding loan exposure comes from Europe-based institutional lenders. Since 2019, Funding Societies has expanded its suite of financial services beyond lending and plans to bring its operations to more locations in Southeast Asia within the next 12 months.