Harvard-inspired Funding Societies gets Maybank investment
Published on: Thursday, September 12, 2024
By:
Lee Min Keong, FMT
Kelvin Teo and Reynold Wijaya founded Funding Societies while studying in Harvard Business School.
PETALING JAYA: Singapore-based Funding Societies has been given the stamp of approval by Malayan Banking Bhd (Maybank) with its strategic investment in the digital finance platform for the region’s micro, small-and-medium enterprises (MSMEs).
The strategic investment by Malaysia’s largest lender follows on the heels of similar investments by sovereign wealth fund Khazanah Nasional and CGC Digital, the digital arm of Credit Guarantee Corp, early this year.
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The financial details of Maybank’s investment were not disclosed.
A financial technology (fintech) company, Funding Societies has disbursed over US$4 billion (RM17.3 billion) in business financing to more than 100,000 MSMEs across Malaysia, Singapore, Indonesia, Thailand and Vietnam since its establishment in 2015.
Funds from the previous investments by Khazanah and CGC were used to expand the platform’s coverage in Malaysia to areas beyond Kuala Lumpur, Selangor, Penang and Johor.
The funding by Malaysian government-linked companies and top venture capitalist funds such as Softbank and Sequoia Capital is testament to the validity of a business concept hatched by two Harvard Business School students a decade ago.
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The duo were Kelvin Teo, who hails from Senai, Johor, and Indonesian Reynold Wijaya. They founded Funding Societies – a Web-based peer-to-peer lending startup targeting small businesses – in 2015 while pursuing their Master in Business Administration in Harvard.
Seizing an opportunity
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In an interview, Teo and Reynold said they established Funding Societies and its Indonesian arm Modalku as they saw significant opportunity across Asia as SME financing is a structural problem.
For example, MSMEs represent 97% of business establishments in Malaysia, and contribute 38% to gross domestic product (GDP).
However, compared to consumer financing, SME financing is also an extremely hard problem with considerable local nuances. For Funding Societies, we only enter markets that we’re passionate in and that we can win, hence Southeast Asia is our natural choice, they said.
It is fair to say that they have prevailed, given that Founding Societies is now the largest SME digital finance and debt investment platform in Southeast Asia.
On the latest investment, Teo, who is the group CEO, said: “We are honoured by Maybank’s support, reflecting a shared commitment to serve MSMEs in Southeast Asia.
This partnership reaffirms our dedication to extending credit access to underserved MSMEs that face cash flow management challenges – an area we are progressively expanding to help these businesses fulfil their business potential, he said in a statement yesterday.
For Maybank, the investment is part of the lender’s approach to accelerate innovation by collaborating with partners to extend its outreach to MSMEs across the region.
Maybank president and group CEO Khairussaleh Ramli said its banking expertise along with Funding Societies’ digital platform would foster a robust and sustainable SME ecosystem.
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