SINGAPORE (Apr 19): Funding Societies, the peer-to-peer (P2P) lending platform also known as Modalku in Indonesia, has raised US$25 million ($32.8 million) in Series B fund.

Led by Softbank Ventures Korea, the funding round also includes existing investors Sequoia India, Golden Gate Ventures and Alpha JWC Ventures from Indonesia.

Qualgro and LINE Ventures also participated in this round. Additionally, the platform has raised credit lines from banks and financial institutions to further support SMEs.

This fundraising is said to be the largest by a P2P lending platform in Southeast Asia.
Softbank Ventures Korea, an early stage venture capital arm of Softbank Group known for its US$ 100B Vision Fund, invested the lion share in the fundraise.

Softbank Group has also funded large alternative lenders like SoFi and Kabbage in US, as well as tech giants like Grab in Southeast Asia.

“SoftBank Ventures Korea has been actively investing across Southeast Asia.  SME digital lending across Southeast Asia is where we saw a huge growth potential.  Among many players, we were most impressed with Funding Societies with what it has achieved in the short period of time and its potential to continue to become No. 1 player,” says Sean Lee, Partner and Managing Director, Softbank Ventures Korea.

Funding Societies, which was founded by Kelvin Teo and Reynold Wijaya in 2015, is a digital lending platform that connects small and medium-sized enterprises (SMEs) in Singapore, Indonesia and Malaysia with retail and institutional lenders.

In Jan, the platform crossed the $100 million mark in crowdfunded SME loans. This marked a 300% growth of its loan book since the same period in 2016 while maintaining a default rate of less than 1.5%. The platform has also increased its lender base beyond 60,000 in less than three years of operation.

From a recent study conducted by Ernst & Young, UOB as well as Dun & Bradstreet, 65.2% of the SMEs in Southeast Asia do not have easy access to business financing. About 68% of the surveyed businesses were also open to non-traditional financing options like P2P lending.