Finance companies are said to have invested in the Indonesian banking index

Online lending platform Funding Societies, better known as Modalku in Indonesia, has taken a minority stake in Indonesia’s PT Bank Index Selindo, sources told DealStreetAsia.

As DealStreetAsia reported in November, Funding Societies co-founder and CEO Kelvin Teo said the company wanted to invest in a local bank. “As we grow into neo-banking, we are open to both partnering and owning parts of a bank,” he said.

The latest development was first reported by Tech in Asia.

Used car platform Carro is also believed to have invested in Bank Index, the sources mentioned above said. Carro is also expected to be an investor in PT Bank Allo, which joined the platform late last year, alongside CT Corp, e-commerce marketplace Bukalapak, consumer conglomerate Salim Group and tech giant. Grab carpool as investors in its rights issue. .

DealStreetAsia has reached out to Modalku and Carro for comment.

Bank Index, which operates in key cities in Indonesia, focuses on banking services to SMEs (small and medium enterprises). Its largest shareholder is PT Khazanah Indexindo, and major shareholders include Malaysian private equity firm Creador Capital. Creador invested approximately $24 million in the bank in 2015, in exchange for a 20% stake.

The finance companies recently raised $144 million in its Series C+ and $150 million in debt to fuel its regional expansion. SoftBank Vision Fund 2 led the oversubscribed Series C+ round with participation from Vietnamese tech giant VNG Corporation, Rapyd Ventures, EDBI, Indies Capital, Ascend Vietnam Ventures and existing shareholders Sequoia Capital India and BRI Ventures.

Founded in 2015 by Teo and Reynold Wijaya, Funding Societies seeks to fill the region’s $300 billion funding gap to help small businesses gain the necessary support they lack from traditional financial institutions. Finance companies offer microloans ranging from $500 to $1.5 million that can be disbursed within 24 hours, suitable for small businesses looking to manage their cash flow.

Series of offers

Besides Modalku, several top fintech companies in Indonesia are looking to acquire local banks.

These include SME marketplace Investree, payment solutions provider Xendit, P2P lender Komunal and financial group Fazz, which owns PAYFAZZ.

Indonesia’s banking sector is ripe for mergers and acquisitions given the impending deadline the regulator has set for banks to meet revised capitalization standards.

Announced in March 2020, commercial banks must have a minimum capital of 2 trillion rupees ($140.36 million) by the end of 2021 and 3 trillion rupees ($210.5 million) d ‘by the end of 2022. Many small banks, with insufficient capital, are under pressure to seek strategic partners with injections of liquidity.

Meanwhile, well-funded tech companies are exploring the acquisition route to enter the lucrative digital banking space in Indonesia, which is Southeast Asia’s largest internet market by gross merchandise value (GMV). $70 billion in 2021, according to Google. , Temasek and the Bain & Co. e-Conomy SEA 2021 report.

Several tech companies have also secured banking assets in Indonesia over the past year.

Online brokerage and unicorn Ajaib took a 24% stake in PT Bank Bumi Arta Tbk for 745.67 billion rupees ($52.23 million) late last year while the media conglomerate Indonesian Emtek acquired Bank Fama in October 2021.

Among other major deals, Sea Group acquired Bank Kesejahteraan Ekonomi (Bank BKE), while consumer finance company Akulaku Group holds a 31.1% stake in Bank Neo Commerce Tbk and ride-sharing giant Gojek holds a 21.4% stake in Bank Jago. Finaccel (parent company of the Kredivo credit platform) holds a 24% stake in Bank Bisnis Internasional Tbk. Sharia-compliant P2P lender ALAMI also invested in an Islamic rural bank in March 2021.

About Nicole Harmon

Check Also

SoftWorks AI goes TRUE and meets the need for loan intelligence –

The new name truly reflects the company’s ability to make decisions faster and reduce lending …