Compliance a big part of Funding Societies’ US$7.4mil Series A

  • Funds to be used strengthen its customer experience, streamline services
  • Also to comply with regulatory variations in Singapore, Malaysia and Indonesia
Compliance a big part of Funding Societies’ US$7.4mil Series A

 
SINGAPORE-based Funding Societies, a peer-to-business (P2B) lending marketplace which has secured S$10 million (US$7.4 million) in Series A funding, will be using part of the additional funding to meet with regulatory requirements in the three markets it currently operates in.
 
“There is no choice … we are dealing with the public’s money and therefore need to be regulated,” said cofounder Kelvin Teo.
 
“Regulation will also be a ‘safe card’ for investors to invest in our P2B crowdfunding.
 
“Compliance means we have to invest in few things as well – it could be a new office in remote areas, it could be deploying new technologies and algorithms, it could be adding more people or more capital.
 
“It depends on each government, but we are here to comply, and we have no other plan but to comply and to grow financial inclusion in these countries,” he told Digital News Asia (DNA) in Jakarta.
 
Funding Societies operates in its home market of Singapore, and as Modalku (or ‘my capital’ in Malay) in Indonesia and Malaysia.

READ ALSO: Bank Sinarmas allocates US$760K to Funding Societies’ Modalku platform
 
In a statement on Aug 4, it said in Series A funding round was led by Sequoia India, and included funding from Harvard University experts and existing investors such as Alpha JWC Ventures.
 
The additional financing will be used to strengthen its customer experience, streamline services for borrowers and lenders, and comply with regulatory variations in Singapore, Malaysia and Indonesia, it said in its official statement.
 
According to Teo, in Malaysia Modalku is applying for a capital market licence, having already met with regulatory compliance by having RHB as its escrow bank.
 
Indonesia’s Financial Services Authority (OJK) is in the midst of drafting a regulatory framework for financial technology (fintech) companies.
 
In that country, Funding Societies via Modalku will focus on improving its technology, building more partnerships and making sure that consumer protection is taken care of, Teo told DNA.
 
Modalku will expand to Bandung next month, and hopefully reach more cities by the end of the year, he said.
 
Smart money
 
Meanwhile, in the official statement, Teo said, “P2B lending is a capital and knowledge-intensive business. We believe in working with the best in the industry and are proud to partner with Sequoia in this journey.”
 
“Its experience investing in online lending platforms will bring Funding Societies to the next level. We will continue serving SMEs (small and medium enterprises) and lenders with the same focus on sustainable, quality growth,” he added.
 
Funding Societies said that since June 2015, it had provided more than S$8.5 million (US$6.3 million) in loans to about 100 SMEs in Singapore.
 
Modalku has also given about S$1 million (about US$740,000) in loans to more than 30 SMEs in Indonesia.
 
“Sequoia has been impressed by Funding Societies’ strong team and its ability to execute across South-East Asia,” Sequoia vice president Pieter Kemps said in the statement issued by Funding Societies.
 
“In a large market, it has grown fast by effectively meeting the needs of both SMEs and lenders,” he added.
 
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