Nearly 75% of limited partners (LPs), or organizations and individuals investing into funds and non-direct investment entities such as family offices, high net worth individuals and corporate venture capital entities, are bullish on fintech in Southeast Asia with Indonesia perceived as the most attractive market, according to a new survey by tryb.

Limited Partners View on Southeast Asia Market, tryb Fintech and Limited Partner Survey 2018

tryb, which surveyed over 85 respondents from a wide range of fintech sectors and LP segments across Asia, Europe and the US in late October 2018, found that nearly 60% of LPs reported that Southeast Asia is a “very attractive” market for fintech companies. Over 40% of LPs are planning to increase investment into fintech investment strategies in 2019.

Limited Partners Future Investment Plans for 2019, tryb Fintech and Limited Partner Survey 2018

In particular, Indonesia is considered the most attractive market (48%), followed by Singapore (32%) and Vietnam (13%).

Limited Partners View on Most Attractive Southeast Asia Markets, tryb Fintech and Limited Partner Survey 2018

Indonesia, the largest economy in Southeast Asia with an estimated population of over 260 million people, has witnessed the rapid development of fintech with over 260 companies as of early 2018 and US$26 million raised in 2017, according to EY.

About 78 fintech companies are operating in the payments segment, while between 20 and 30 companies are in the lending, savings and investments segments each, showcasing the latter segments’ infancy and opportunity for growth.

According to the executive chairman of the Indonesian Financial Technology Association (Aftech), Kuseryansyah, five fintech sectors will experience significant growth in the country in the next five years, namely online payments, peer-to-peer (P2P) lending, insurtech, crowdfunding and price aggregators.

Kuserasyah noted that P2P lending could offer easily accessible small loans in a country where only 36% of the population is banked. Meanwhile, insurtech could serve the large pool of uninsured people in Indonesia, where only 1.7% of adults currently have an insurance program today.

“The insurance protection gap in Southeast Asia offers new possibilities for innovation in micro-insurance and community-based insurance, where new business models are about to emerge in e-commerce, auto, travel and health protection,” commented Evgenia Vorontsova, senior strategy project manager at Allianz.

Similarly, the tryb survey found that payments (39%), lending (16%) and enterprise technologies (16%) in particular are perceived as the most attractive fintech sectors to LPs. Over 90% of LPs surveyed agree that fintech will support financial inclusion in Southeast Asia.

Limited Partners View on Most Attractive Fintech Sectors, tryb Fintech and Limited Partner Survey 2018

Fintechs’ perspectives

According to the tryb survey, fintechs too are optimistic about Southeast Asia’s growth prospects and the fundraising environment. Most fintechs expect “moderate to rapid growth” in their markets, and are now focused on scaling and fundraising.

Market Growth Prospects, tryb Fintech and Limited Partner Survey 2018

“Southeast Asian companies have raised some capital and are now putting efforts into scaling across the region. It is time to bring products to market and produce numbers for the next fundraising round,” said Markus Gnirck, co-founder of tryb Group. “One of the most under-appreciated challenges for entrepreneurs is balancing the effort needed to raise capital and managing a business to scale.”

Three quarters of the fintech companies surveyed are currently raising capital. Fundraising was named the most impactful way that investors can help a fintech achieve their goals. Fintechs also feel that investors can add value by leveraging networks (15%) and assisting with scaling (14%).

About a third of fintechs receive guidance, advice or operational support from their investors every month, followed by ad-hoc (22%) and weekly (18%) support.

Top Priorities for a Fintech Company, tryb Fintech and Limited Partner Survey 2018

The survey findings also highlight the strong demand from fintechs and LPs for investors with specific mandates and expertise in fintech.

Over 85% of respondents have met with or pitched to a fintech-focused investor while nearly 40% reported they would have liked more access to fintech focused investors in the past.

Almost all fintech respondents would want to access more fintech-focused investors in the future, the research found.

Have you engaged a Fintech-Focused Investor, tryb Fintech and Limited Partner Survey 2018

The tryb study echoes predictions from other top firms. According to a recent study by US-based consultancy Bain & Company, the investment ecosystem in Southeast Asia is poised for growth, driven by strong investor interest in the region’s tech sector, especially the fintech space.

Over 60% of investors from Southeast Asia cited technology as their focus area in 2018 and 2019 with fintech being the largest sub-sector, ahead of artificial intelligence and blockchain.

Featured image via unsplash.

DailySocial Indonesia recently released a report about their findings on the Indonesian fintech scene, recently notable with the rise of peer-to-peer (P2P) lending.

Between December 2017 to November 2018, DailySocial observed at least 14 disclosed funding for fintech startups, noting that there are more later stage investments than the previous year. These facts imply that the Indonesian scene is growing more mature.

Therefore, we have looked into the top 5 of those investments, which could give us a hint on which sectors are more mature in Indonesia. In fintech’s ever growing march, these startups could give us a glimpse into the ares which new fintechs might face stiff competition if they’d like to enter today, or simply fintechs that are best tuned to the unique needs of the Indonesian people.

As for an overall observation, 8 out of 14 of the fundings listed in the report are related to lending startups, lending credence to the idea that P2P lending has become a significant factor in Indonesia.

Beyond 2018, Indonesian fintechs have also made an impact on the general Southeast Asian scene, with one of our representatives making it to the list of top funded fintechs across Southeast Asia.

The companies listed below are arranged based on disclosed funding numbers on the aforementioned DailySocial report. Therefore, there may be variations in the actual valuations of the company, and certain companies that may otherwise belong on this list have gone unlisted—like Investree.

5. Koinworks – US$15 million

Koinworks is an Indonesian P2P that does online P2P lending matching via machine learning. Borrowers can request funds starting from Rp 100,000, with what the company claims are lower interest rates.

In August, the company closed its Series A funding round at US$15.77 million, led by Mandiri Capital Indonesia, the venture capital arm of Bank Mandiri. The round gained participation from Gunung Sewu and Convergence Venture as well. Koinworks said they would utilise the funds by investing into developing its technology side, which could be a hint to the company venturing into other machine learning-related arms of finance.

Koinworks is said to hold a significant slice of the crowded retail P2P investment space, where investors are given access to curated financial products with analytics of said investments outlined to them.

4. Funding Societies (Modalku) – US$25 million

While Funding Societies has a presence across various Southeast Asian markets, Modalku is probably the company’s most successful venture at this time. Modalku, as the name implies, aims to help SME owners start or grow their business by providing a platform that could connect them to investors—via a crowdfunding, or P2P model.

As of 2012, Modalku claims to have facilitated up to Rp 3.34 trillion loans, which is a long way from the Rp 999 million the company reported just earlier that same year. The company also noted that 70% of Modalku’s total loans are provided my millennials.

Funding Societies’ most recent round netted them US$25 million in a series B round, in what Tech in Asia characterises as an “oversubscribed round“. It was led by Softbank Ventures, with participation from existing investors Sequoia Capital, Golden Gate Ventures, and Alpha JWC Ventures, while Qualgro and Line Ventures.

3. C88 (CekAja) – US$28 million

CekAja.com, loosely translating to “Just Check”, is a comparison platform that banks on its neutrality to gain trust among the Indonesian society in making financial decisions. They compare financial services from credit cards, loans, insurance, investments and SME-specific products.

Its parent company, C88 raised US$28 million in a Series C round led by global credit-scoring giant Experian. And in addition to the growth capital, Experian partnered with C88 to implement its demand generation, analytics and digital on-boarding technology onto C88’s CekAja platform, as well as its sister site in the Philippines.

2. FinAccel (Kredivo)  – US$30 million

Branding themselves as a digital credit card for the masses, Kredivo is an app that evaluates the creditworthiness of someone wanting to shop online in real-time. The registration process, Kredivo claims, takes about 1 minute and approval will be given in a few hours. Kredivo can be used to get installments for online shopping.

In July, Kredivo’s parent company FinAccel raised US$30 million in Series B equity investment. This was led by Square Peg Capital, with participation from new investors such as Telkom’s MDI Ventures and Atami Capital, and existing investors Jungle Ventures, Openspace Ventures, GMO Venture Partners, Alpha JWC Ventures and 500 Startups.

A few months following this investment round, Kredivo announced that they are joining the heated personal loans race in Indonesia, carrying 2.95% in interest per month. Kredivo offers personal loans in two varieties— Mini, which entitles borrowers to Rp3.000.000 (US$209) with a 30 day and Jumbo, allowing for loans up to Rp30.000.000 (US$2,092) with up to a six month tenure.

1. Akulaku – US$70 million

Akulaku started out as a service that allows online shoppers without credit cards to purchase high-ticket items in installments. This starting point eventually led to diversification—into credit cards, and even later an e-commerce platform selling both in-house products and items from third-party suppliers. Furthermore, Akulaku have also expanded into digital payments, like utility bills, game credits and mobile phone bills.

In October, Akulaku raise US$70 million in Series C funding to strengthen its market presence in Southeast Asia, and launch yet other financial services. The round was led by Fanpujinke Group with participation from Sequoia India, BlueSky Venture Capital, and Qiming Venture Capital.

Credit Financing was Deemed Highly Valuable in 2018

What has been interesting to note is that while Indonesia’s scene is known for P2P lending, the highest value in funding last year came from credit financing startups. With that being said, the reasoning behind its higher valuations may not boil down to Indonesia at all. These platforms may experience high use amongst Indonesians, but we feel like high-ticket investors might be more keen on these platforms simply due to potential in Southeast Asian regions, should they choose to expand.

Indonesia experiences a high unbanked population, with 180 million adults unbanked, or 66% of its population. These numbers line up with what KPMG estimates of Southeast Asia, only 27% of the region’s populations with a bank account.

And even among those, credit card use has been decreasing in popularity. according to Asia the Asian Nikkei Review, Philippines and Vietnam showcased significant enthusiasm for credit cards in 2017, but lagged in markets like Indonesia, Malaysia and Thailand, in parts, thanks to platforms like GrabPay, Go-Pay, or simply bank-issued mobile payment apps.

Indonesian platforms are well-poised to capture the credit card-reticent market of Southeast Asia, and even do better than western or Chinese contemporaries simply because they would understand neighbouring developing nations better, or have a product that better caters to similar needs.

With that being said, investors who are interested in Indonesia’s P2P scene may have simply been holding back higher sums pending Indonesia’s Financial Services Authority’s (OJK) regulations, which was only recently implemented.

Other reasons behind their lower funding rounds could also boil down to the scene’s general maturity, or a solution that is not seemed to have much value outside of Indonesia as of now.

Of course, the above companies listed represent only a small slice of the Indonesian ecosystem. For a more holistic view of the state of play of fintech in Indonesia, our state of play report highlights some of Indonesia’s players and scenes with high potential.

Featured image edited from Wikimedia Commons

KinerjaPay, a digital payment and e-commerce platform, announced that it has received US$200 from PT. Investa Wahana Group, Indonesia, divided into US$100 million in shares of the Company’s Series F and and another US$100 million in shares of the Company’s Series G Convertible Preferred Stock.

The payments firm, will utilise the proceeds to fund their  peer-to-peer lending operations, potential acquisitions and strategic investments in Indonesia as part of their 2019 expansion plans. The company also plans to allocate a certain portion of the subscription proceeds to repurchase KinerjaPay’s stock in the open market.

It is looking to expand into prepaid mobile business, P2P lending, mobile payment solutions, online gaming, and e-commerce services initially in Indonesia, and later across Southeast Asia. Additionally, the company intends to make investments in certain related industries in other foreign countries.

KinerjaPay’s use of proceeds are to fund the Company’s peer-to-peer lending operations, potential acquisitions and strategic investments in the Company’s home-based region as part of their expansion plan for 2019. The company also plans to allocate a certain portion of the subscription proceeds to repurchase KinerjaPay’s stock in the open market, subject to the rules and regulations of the SEC.

Featured image via Marquee Executive Offices

Thanks to Go-Jek’s diversification strategy, it’s pretty easy to get a glimpse about the company’s future direction based on what companies they’ve acquired or shook hands with. This time around, it’s come out that the US$9 billion-worth company gained a majority stake in Philippine blockchain-based platform Coins.ph.

Since their entry into Singapore as a ride-hailing contender, it seems like Go-Jek is interested in going toe-to-toe with Grab in conquering a slice of the Southeast Asian market. For our interests, this is clear in the application of both Go-Pay and GrabPay, the fintech arm of both companies, respectively.

We think there’s more to this acquisition than just Coins.ph’s experience in the Philippine market, though that is a major concern as it faces accreditation issues in getting cleared for operations in the Phillippines. The acquisition of a Filipino payments company is no doubt, part of Go-Jek’s strategy in gaining entry into the Phillippines. 

Beyond that, the Indonesian unicorn’s acquisition could put them on a fast track to catch up with GrabPay.

Coins.ph, based on a blockchain network, is a platform that allows even those without a bank account to access financial services directly from their phone. Their business encompasses financial services like remittances, mobile air-time, bill payments, and even online shopping—the blockchain company is said to have processed over six million transactions per month.

Many segments of these services are a vector of focus for Grab Financial as well, so with strategic implementation of Coin.ph’s blockchain capabilities, Go-Jek could find itself catching up, and even surpassing Grab Financial’s offerings.

Experts have opined before that when it comes to consumer-facing products, good blockchain application could be invisible. This means that an application of blockchain could translate to quicker transaction speeds, for example, or more streamlined management of business, or even lowered prices.

This is exactly Coin.ph’s expertise—utilising blockchain for ‘regular’ payments transactions.

Meanwhile, Grab carries on with Grab Financial efforts with a newly minted partnership with ZhongAn, a famed insurtech company from China to offer mobile insurance products in the Grab apps on many Southeast Asian phones. It seems like 2019 will be the year that Go-Jek and Grab will clash in earnest and with similar origins and goals, we’ll be watching both unicorns to see who gains the upper-hand.

Featured image via Go-Jek

Ride-hailing service GOJEK has today announced a partnership with Carousell, Singapore’s most popular consumer-to-consumer marketplace, to reward Carousell users who are new GOJEK riders with S$13 in ride vouchers.

From today to Mar 6, Carousell users who download the GOJEK app by clicking on the GOJEK ads on Carousell’s app or website will receive an additional S$3 ride voucher on top of the usual 2 x S$5 vouchers* offered to new riders by GOJEK.

GOJEK’s Global Head of Transport, Raditya Wibowo, says:

Raditya Wibowo

“At GOJEK, we look to partner with local brands that align with our mission of making the everyday lives of people better. As Singapore’s most well-known consumer-to-consumer marketplace, Carousell solves a pain point for consumers by making the exchange of goods and services more accessible. We are excited to team up with Carousell and grow together with such an innovative local partner.”

*All vouchers are valid for 14 days, and will be issued within 24 hours of a user installing the GOJEK app and registering a GOJEK account. A voucher will automatically be applied when a rider makes a booking.

Featured image credit: Carousell

In today’s digital world, investors increasingly demand to be able to stay abreast of market developments and manage their financial assets from their mobile devices. However, most financial institutions struggle with delivering this experience as they are tied up in a maze of legacy systems and disjointed service channels.

PT. Bank Commonwealth (PTBC), the Indonesian subsidiary of Commonwealth Bank of Australia (CBA), has recognized this challenge early on and entrusted Switzerland-based Fintech additiv with delivering the platform for its mobile “SmartWealth” Service.

Widely seen as a game-changer in the industry, it provides Premier Banking clients with a 360-degree view of their investment holdings, bank accounts and bancassurance policies. It also displays relevant financial news, robo advisor-like investment recommendations and the ability to stay in touch with their advisors. Additiv’s technology provided the functionality and flexibility to do this with minimal impact on the bank’s legacy systems.

In recognition for this innovative solution, PTBC also received the prestigious MURI award for best digital wealth management app. MURI (Museum Rekor-Dunia Indonesia) is the local equivalent of the Guinness Book of Records.

Ivan Jaya

Ivan Jaya, PTBC’s Head of Wealth Management & Client Growth, stated

“With the robo-advisory feature, customers can monitor their portfolios and optimize investments in a simple, smart and integrated way, anywhere and anytime.”

Michael Stemmle

Michael Stemmle, additiv’s CEO, added

“We are particularly proud of our partnership with PTBC whose vision and pioneering spirit we share. The launch marks an important milestone for the additiv that demonstrates our commitment to the Asia Pacific region and also the strength of our Digital Finance Suite Version 4, the technology underpinning SmartWealth.”

Featured image credit: Unsplash

UnPAY and Tencent Research Institute have jointly published a whitepaper (in Chinese) on Indonesia’s payment market.

This whitepaper focuses on hotspots and key issues of the payment system in Indonesia and is the second of its “Venturing Out” series. It aims to help Chinese payment companies expanding overseas gain a deeper understanding of the world’s fourth most populous country. The first whitepaper which was published in October last year, honed in on Singapore’s payment infrastructure.

Even as a developing country, Indonesia is already the largest economy in ASEAN with a Gross Domestic Product (GDP) of USD1.016 trillion in 2017. Its GDP growth rate is expected to reach 5.3% in 2020. Cash is still highly utilised while traditional bank account penetration rate is at a low rate of 34%. With a huge untapped market, it is no surprise that Indonesia remains as a highly attractive market in the digital payment and finance sector.

To operate in Indonesia, payment companies must have a comprehensive license access system, a regulation required by the Central Bank, Bank Indonesia, and Otoritas Jasa Keuangan (OJK), the two financial and payment transaction services authorities. Payment services are categorised into front-end and back-end.

The front-end body includes institutions that have direct contact with customers such as acquirers, payment gateway operators and electronic wallets. Conversely, back-end entities do not have direct contact with customers and these include card organisations, clearing houses and final settlement agencies. Applicants can only choose to operate in one category but they can apply for multiple licenses in one category.

There are three main pillars of Indonesia’s payment infrastructure: card payment, peer to peer (PTP) and electronic money. Card payment facilities are limited to credit card, ATM card and debit card. PTP regulations oversee the purview of transfer/ payment gateway services and e-wallet service providers. It is worth noting that payment service providers (PSPs) are prohibited from using virtual currencies for PTP payments.

Under the electronic money quota management, unregistered users can store a maximum of 2 million rupiah while a registered user can have a wallet limit of 10 million rupiah. Electronic trading limit is 20 million rupiah per month. As of 21 December 2018, a total of 34 institutions in Indonesia had obtained e-money business licenses. Bigger players in the market include GoPay, T Cash, PayPro and OVO.

Mobile Payments in Indonesia: Race to Big Data Domination, MDI Ventures & Mandiri Sekuritas Research

To ensure a more cohesive and consistent payment structure, the Central Bank, Bank Indonesia has established a National Payment Gateway (GPN) to integrate the fragmented payment solutions. The GPN is a unified and interconnected clearing network that will unite all payment channels in Indonesia, including ATMs, POS, payment gateways and e-payment methods like credit and debit cards. In the pipeline, the Central Bank, Bank Indonesia will be developing a universal QR code payment standard for an interoperability and secure payments infrastructure.

Ping An, the world’s largest insurer by value,  has announced the launch of it’s fintech arm OneConnect in Indonesia. The fintech arm will be offering a suite of services ranging from Artificial Intelligence, Blockchain, Biometrics and other tech that were previously deployed within the Ping An Group.

The groups call to fame is its Biometric Authentication which boasts an accuracy of 99.8% which is widely regarded as among the best in the world.

OneConnect is also known for its blockchain solution, it is the technology provider for Hong Kong Monetary Authority trade finance blockchain project Hong Kong eTrade Connect

To mark the first step in the company’s effort toward accelerating digital transformation in Indonesia’s finance industry, OneConnect is forming a partnership with Indonesia’s traditional market association (ASPARINDO). The collaboration will see OneConnect conducting training workshops and also performing site visits at the markets to help the traders and kiosks digitize themselves.

Featured image credit: Unsplash

Grab has been accused of being the most capitalised startup in Southeast Asia’s history, and with this recent closing of a whopping Series H we find it hard to disagree. Grab opened this round round since June last year, and at its close, sees participation from quite a few big names: returning investor Softbank Vision Fund, Toyota Motor Corporation, Oppenheimer Funds, Hyundai Motor Group, Booking Holdings, Microsoft Corporation, Ping An Capital, and Yamaha Motor.

With Softbank Vision Fund’s injection, the total financing secured in Grab’s Series H totals up to over US$4.5 billion (SG$6.11 billion).

As usual, Grab expressed interest in furthering its “super app vision” in Southeast Asia, which refers to their efforts into a multipurpose app—for ride-hailing, financial services, deliveries, food delivery and even media content.

Grab revealed a few things that it would like to embolden with the new fund injection; like expanding on its existing verticals, and rolling out new services that it announced in 2018 like on-demand video, in-app digital healthcare, mobile insurance, and hotel bookings. Grab also mentioned that it plans on investing a significant portion into its Indonesian market.

Out of the many plans that Grab has with the funding, here’s two things we’re interested in:

Doubling Down on Insurtech

Slated for a mid-2019 launch in Singapore, Grab announced a joint venture with ZhongAn, one of China’s insurtech giants to launch a digital insurance distribution platform for Southeast Asia.

They will start out by offering drivers’ insurance to its drivers in Singapore, but the overall goal  is to offer a variety of mobile insurance products for underinsured or uninsured populations.

Another affected party could be Ping An, without coincidence, one of the investors to Grab’s new round.

In August last year, Ping and and Grab announced that they will establish a joint venture company, looking to offer a variety of integrated medical services like AI-assisted medical consultations, medicine delivery and appointment bookings through the online platform.  It’s indirect, but

Driving Competition in Go-Jek’s Home Turf, Indonesia

In particular, Grab plans to invest a significant portion of fresh proceeds in Indonesia, where company claims that its revenue has doubled in 2018.

Grab gave particular attention to growing GrabFood and GrabExpress in the region, though it did also mention that it is part of the payments ecosystem in Indonesia thanks to partnerships with OVO and Tokopedia.

Seeing as Grab is in the middle of a stiff Southeast Asian competition with Indonesia-based Go-Jek, we won’t be surprised if Grab has aspirations towards giving the Indonesian platform a run for its money; especially since Go-Jek has also expressed similar “super app” interest with Go-Pay at its center.

Featured image via Grab Thailand

Alibaba-backed Akulaku is the top funded fintech startups in Indonesia, and now a shareholder of a local bank as reported by Katadata.

Akulaku reportedly made an Rp 500 billion (approximately SG$48 million) stake into PT Bank Yudha Bhakti Tbk (BBYB), in stages. At the time of writing, Bank Yudha Bhakti has pocketed Rp 158.7 billion (approximately SG$15 million) from the deal. After the first stage, Bank Yudha Bhakti will conduct a rights issue in May and Akulaku will act as a standby buyer.

As a result, Bank Yudha Bhakti will adopt technology from Akulaku into its business as part of its plans towards digital transformation. Bank Yudha Bhakti also has plans on utilising the investment to expand its lending beyond individuals and towards agriculture and small businesses.

For now, Yudha Bhakti doesn’t have a clear picture yet on further collaborations with Akulaku, but Bank Yudha Bhakti consumers would be able to utilise Akulaku services when doing their online shopping with Akulaku-linked e-commerce sites.

Just 30 minutes after the Akulaku deal, Bank Yudha Bhakti’s shares went up by 10% .

Featured image via Akulaku

Fintech has entered a new age in Indonesia, most ostensibly represented when the wild wild west of the peer-to-peer lending scene in Indonesia is finally regulated by the Otoritas Jasa Keuangan (OJK), the country’s financial services authority.

Standing as a nation with 180 million unbanked individuals (or 66% of its population), Indonesia is moving towards financial inclusion at record speed.

The same nation had the biggest account ownership increase in the region, growing from 20 percent in 2011 to 36 percent in 2014 to 49 percent in 2017. It also had a huge growth in savings behaviour of many other emerging countries, as usage of accounts for saving registers at 10% higher than the developing world average.

Not only is Indonesia a rife market for fintech to set its roots and thrive, lately the Asia Pacific region is also showcasing that its people is ready for financial inclusion to take root; they understand its importance.

2019 should shape up to be an interesting year for fintech in Indonesia. Some of the startups we think should be of note this year are:

Akulaku

Geared for the working class in the general Southeast Asia market, Akulaku call themselves an e-commerce platform with a specific focus on cardless installment shopping on products like car loans, bill payment, topups, travel and other leisure packages. Akulaku is operational in Philippines, Vietnam, Malaysia, and Indonesia. Today it’s raised a disclosed total of US$220 million.

Cashlez

Cashlez offers a mobile POS sales system, which allows SMEs and smaller vendors to accept card-based transactions (including Visa and Mastercard) on card readers which are connected to their smartphones via bluetooth. The system can also monitor sales transactions in real-time.

It’s reportedly raised US$2 million, and now looks to distribute up to 5,000 of its mPOS systems by the end of 2019, partly by expanding to popular tourist cities including Bali, Lombok, Yogyakarta, Solo, Surabaya, Malang, Medan, and Bandung.

Cermati

Cermati is an e-commerce site that allows users to research and sign up for credit cards, insurance, and loans. And it announced in February that it raised a Series B round from a cigarette manufacturer owned by the Hartano family for an undisclosed sum. Cermati claims to bring in more than 5 million monthly visits. With the funding, Cermati is looking at expanding their product categories, like general insurance and micro loans provided by fintechs.

C88 (CekAja.com)

C88 operates the comparison platform CekAja.com, a ccomparison platform that allows users to compare credit, insurance, savings, investments, and other consumer financial products. The portal also offers free consultation services through live chat, call center services, and related interactive media. Most recently, CekAja has also received OJK’s blessing to offer microloans.

Jojonomic

Jojonomic began its journey as a personal finance platform, but has since moved to create a cloud-based business suite that allows businesses to “intuitively” manage aspects of its business, like keep track of monthly expenses, disburse claims, manage procurement, and overall create a cashless ecosystem. Since the pivot, Jojonomic was recently able to secure an undisclosed amount of funding. The company will, in parts, use this funding to research machine learning capabilities.

Payfazz

In 2016, Payfazz’ three co-founders started a fintech company that realised that the path to financial inclusion cannot be fully technological, as most Indonesians store their money as cash. Therefore, they deployed an army of offline agents as part of its fintech offering, allowing unbanked users to top up a mobile wallet through an agent, which then gives users access to paying online, like prepaid credit and electricity bills. Payfazz was the first Indonesian company to make it to Y Combinator accelerator, and its founders were also recently part of the 2019’s Forbes 30 Under 30.

Pundi X

Pundi X aims to develop a point of sale (PoS) terminal network which would help people buy and sell cryptocurrencies over the counter. The company aims to launch the service in countries like Singapore, Indonesia, Africa, Brazil and India. They will also partner with cryptocurrency exchanges in realising their vision.

It is also currently developing its own blockchain powered smartphone called X Phone

Ajaib

Claiming to run Indonesia’s first robo-advisor, Ajaib is an online wealth management app that aims to help regular Indonesians grow their money, with low minimums and no account fees. And it just got the attention and funding from SoftBank Ventures, to the tune of US$2.1 million. To grow, the Ajaib team looks to gain virality through rewarded referrals. Ajaib is a summer of 2018 alum of Y Combinator.

KoinWorks

KoinWorks is a P2P lending online investment platform that utilises machine learning to connect investors with SME borrowers or individuals looking for financial help. Investors can invest from IDR 100,000 and borrowers can apply for loans with lower interest rates. The company has raised a total SG$22.5 million(approximately IDR 234.7 billion) of publicly disclosed funds, and aims to loan up to IDR 2.3 trillion this year.

TunaiKita

TunaiKita is one of the recent recipients of the OJK lending license. A joint venture between Wecash Southeast Asia, JAS Kapital, and Kresna Usaha Kreatif, the platform  provides a peer-to-peer licensing framework to arrange unsecured loans between peer lenders and consumer borrowers, and combines first principles of finance, mobile technology, big data and machine learning for credit evaluation and loan application underwriting.

Other resources you might be interested in:

Curious about what are the top fintech startups are in other Asian countries? Here’s a handy guide looking at the top fintech startups in Asia by country.

tryb announced today that it lead the pre-series A round for Gradana, a peer-to-peer property crowdfunding platform based in Indonesia.

According to Gradana’s CEO Angela Oetama, one of the key challenges towards buying and renting property in Indonesia is the hefty down payment that’s required; an issue that the startup aims to address with its platform. Indonesians interested to rent a house can sometimes be slapped with the requirement of a minimum one-year rental payment in advance.

Gradana’s core offering can be broken down into four products; property purchase financing, rental bridging loan, renovation financing and invoice-based financing for property related vendors.

Gradana is the latest in tryb’s series of investment into startups in South East Asia with the most recent being Maria Health a Philippines’ based digital health with an insurtech play. On the Indonesian front tryb was also seen investing into Islamic fintech startup Alami.

Featured Image Credit: tryb

One cannot talk about startups in Indonesia without bringing up Bukalapak, arguably one of the biggest e-commerce platforms in the nation.

Bukalapak has graduated from its startup roots and gained the coveted title of Indonesian unicorn. They are now in the midst of an expansion exercise into other Asia Pacific markets.

Bukalapak has a robust history with the many e-wallet providers operating in Indonesia right now, and has also opened their platform up to more innovative fintech providers.

The e-commerce unicorn allows its e-commerce buyers to pay with Akulaku and Kredivo, both platforms which grants installment payment abilities to buyers without credit cards or a traditional credit history—a significant offering in a region where only about 4% of the population had a credit card in 2017.

Suffice to say, there seems to be a direct correlation between the rise of e-commerce with the rise of fintech in Indonesia.

The Ups and Downs of Bukalapak’s Fintech

It is not a stretch then, for Bukalapak themselves to dabble in fintech. Despite a slowdown on P2P lending in Indonesia, Bukalapak teamed up with P2P lending startups Amartha, Modalku and PohonDana to provide loans in their app under a program called Modal Mitra, geared towards their offline vendors part of the Mitra Bukalapak program.

A few months before that, another partnership with Investree allowed the platform to launch BukaModal, a feature to offer financing for its online sellers that hits a certain amount of sales.

Seemingly geared towards the company’s stated goal of financial inclusion meanwhile, Bukalapak has also has offerings in other fintech realms, like mutual funds (BukaReksa), credit (BukaCicilan), and most interestingly, a gold investment marketplace, BukaEmas, which the company claims is garnering traction.

There is also the platform’s e-wallet BukaDana, seemingly a tide-over wallet for the controversial BukaDompet. The original e-wallet has been frozen due to a Bank Indonesia crackdown that put a moratorium on a variety of e-money providers dealing with a large amount of funds, Bukalapak included.

BukaDompet awaits a new set of laws regulating e-money issuance before it can be allowed to reinstate its original e-wallet.

Despite their difficulties so far dealing with the grey areas of a nascent scene, president and co-founder of Bukalapak, Fajrin Rasyid, has a surprisingly positive outlook on Bukalapak’s fintech journey.

“Fintech Will Potentially Grow Even Faster Than E-commerce Itself”

Image Credit: BukaLapak

For now the fintech market on Bukalapak is small, but Fajrin is optimistic that it will become more important moving forward.

Fajrin’s opinion here is an observation of their own operation in Indonesia, but it is also part of the company’s vision towards its newly-launched BukaGlobal, which opens doors to customers from Singapore, Malaysia, Hong Kong, Taiwan and Brunei to receive purchases from Indonesian merchants within 6-11 days. For now, this is more of a logistics play, but it may also be an avenue for further fintech ambitions.

“We haven’t decided. But we are thinking of some (potential fintech offerings). For example, one that is relevant is remittance.”

“We don’t know how people here usually send money to Indonesia, and vice versa. If I send money from Indonesia to here, for example, how do people here take out the money? One way is through the e-wallet. But aother way is to get it in cash. Recently we have this initiative called Mitra, which we partner with more than 800 thousand offline stores in Indonesia at the moment. And we’re thinking of using that as a cash-out point (for recipients).”

As Indonesia moves towards cashlessness, it seems like Fajrin still sees value in offering cash to Indonesians.

However, a big question remains. It’s all well and good for Bukalapak to offer a wide variety of fintech services to its consumers—be it via partnerships or via its own in-house driven initiatives—but how would it “grow even faster than e-commerce”?

Presenting E-Commerce and Fintech as One Unit

Image Credit: Bukalapak

During our little chat, Fajrin painted a picture of integration between its e-commerce side and its fintech side.

Using its investment offerings as an example, Fajrin clarified that anyone can use the platforms to invest in mutual funds. However, through its escrow system, Bukalapak will prompt merchants with the option to funnel their earnings into a mutual fund instead of their bank account. Therefore, they have a specific set of promotions and campaigns targeted to the merchants on their platform, ostensibly offering a more convenient avenue for SMEs to grow their wealth.

Fajrin even claims that the returns are higher than putting the funds into a bank normally.

Creating an ecosystem around its offerings, be it in-house expansions or partnerships, is a strategy that has served China behemoths like Alipay, WeChat Pay and Ping An well. Alipay’s value accelerated when they began sewing a tapestry of services into its offerings, financial or otherwise, like investments, loans, crowdfunding, and etc. WeChat Pay meanwhile, was already a lifestyle app to begin with so it had this strategy in the bag.

With integrated services in mind, Bukalapak’s new fintech baby is an upcoming insurance offering. The obvious idea would be to provide a marketplace for insurance, like life or health insurance, and Bukalapak intends to do so. But Fajrin also said that:

“You could also get insurance for, let’s say buying a smartphone on Bukalapak. Now you can add insurance on top of (your purchase) to gain more coverage.”

Eventually, Bukalapak may get to a point where users can’t figure out where e-commerce ends and fintech begins—and that may be just the way they like it.

We also asked for hints on any future projects, and Fajrin complied:

“Maybe I can share about one we haven’t launched, which is equity investment. Hopefully in the near future, you can also buy stocks on Bukalapak, from Indonesia’s Bank BCA or Telkom Indonesia, etc.”

Fajrin admits that the legality of that future offering is still in a grey area, so he concluded saying “that’s why I can’t share in regards to timeline yet, but in the near future”.

Avoiding Another BukaDompet Debacle

At the launch of BukaDana, the company’s workaround to the frozen BukaDompet (Image Credit: Bukalapak)

It is no surprise that the continuous freeze of BukaDompet continues to be a bane to its users, and this plagues the company to this day as consumers are still facing difficulties liquidating BukaDompet funds. There was apparently some issue with communicating the freeze to its users, and now many consumers have branded the platform thieves.

With a plethora of competition, any difficulties experienced by customers, especially pertaining to their money, could tank a brand’s entire reputation.

So Fajrin told us that Bukalapak has brought on two teams focused specifically on regulations.

“The first deals with legal compliance (with) regulations that already exist. If we want to launch fintech in Malaysia, for example, then this team will look at regulations (there we need) to comply with.”

“(When) talking about fintech, there are regulations in grey areas, or regulations that just don’t exist yet. That’s why we have a public policy team, whose job is to discuss with the government regarding what we plan to do.”

The hope is that Bukalapak will be able to anticipate regulator movements moving forward, and plan its fintech products accordingly.

For now, Bukalapak’s fintech strategy veers towards partnerships, but signs point to them shifting gears.

“We didn’t have expertise when we started this. So if we do it ourselves using our own balance sheet money, if we lose it, then we lose our own money. With the partnership, it’s not our money. Yes, we have to share the revenue, but at the same time, it also lowers the risk.”

“As we grow over time, then we’ll also build the expertise and database. We’ll know out of the loans given to our merchants, these are the characteristics of merchants that are good at returning the money.”

Fintech is pretty much a data game nowadays, so we do see some validity in Bukalapak’s fintech plans at this point. With more internal red-tape implemented in the company now though, will Bukalapak’s careful steps come at the price of innovation? Between its regulatory difficulties and BukaGlobal, we can at least say for sure that the company is in the midst of a transitional phase, and keen Indonesian observers will be keeping an eye on the company for the conclusion of their metamorphosis.

Featured image via Bukalapak

Bank Indonesia Governor, Perry Warjiyo recently unveiled “Indonesia’s Payment System 2025 Vision” a strategic framework consisting of 5 key initiatives to future proof Indonesia’s payments ecosystem for a digital future.

According to a press statement issued by the central bank, some of IPS 2025’s goal include enabling closer collaboration between banks and fintech, and faster digital transformation within banks.

The 5 initiatives that will be carried out by the central bank will revolve the following key themes; open banking, development of retail payments, development of wholesale payments & financial market infrastructure, data & digital identity, and regtech & suptech.

Laying down the foundation for the five initiatives, Bank Indonesia held a soft launch for QR Code Indonesia Standard (QRIS), which will allow all QR payments to be interoperable using only one QR code.

KoinWorks, one of Indonesia’s key players in the peer-to-peer (P2P) lending space, OJK, today announced its Series B fundraise of S$16.5 million (IDR 170 billion). Prior to this funding round, Koinworks was seated firmly among the 10 top funded fintech startups in Indonesia.

The oversubscribed round was co-led by EV Growth and Quona Capital, with participation from existing investors. The new funding will be used to expand the KoinWorks team and partnerships, and further develop systems and technology to provide financial inclusion throughout Indonesia with its popular one platform.

KoinWorks was established in 2016 by co-founders Benedicto Haryono and Willy Arifin. The company brings together borrowers and lenders online through a single platform that provides access to financial services for SMEs.

Claiming to leverage machine learning, KoinWorks enables borrowers to access low interest loans while funders receive better returns. Available products include business financing and invoice financing.

“When we started KoinWorks, we set out to democratize finance in Indonesia while fostering financial inclusion,” said KoinWorks’ co-founder and Executive Chairman Willy Arifin.

“In just a few short years we’ve grown to have the largest retail investor base in Indonesia, with more than 300,000 users. The round was oversubscribed, which means that the money raised only represents the amount of liquidity that existing shareholders were willing to make available, and does not reflect the true appetite of investors in KoinWorks.”

Today more than 60 percent of investor-funders in KoinWorks’ platform are millennials, and 70 percent of investors say KoinWorks is their first investment product.

KoinWorks had previously raised a Series A in 2018 from investors Mandiri Capital Indonesia, Convergence Ventures, Gunung Sewu, Beeblebrox and Quona Capital.

Featured image credit: Benedicto Haryono, Chief Executive Officer & Co-Founder of KoinWorks

OVO, one of Indonesia’s leading digital payments platform, has selected Refinitiv’s World-Check to support its Know-Your-Customer (KYC) and Anti-Money Laundering (AML) procedures to minimize its exposure to financial crime risks.

This partnership comes at a time when OVO looks to continue the expansion of its business and to drive financial inclusion across the country.

World Check, image via Refinitiv

With Indonesia’s push to build an inclusive digital economy and financial ecosystem, financial technology services such as OVO play an integral role in defining industry standards and enhancing measures to fight against financial crime.

According to Refinitiv’s annual financial crime report 2019, three-quarters of Asia Pacific organizations have been affected by financial crime over the past 12 months, leading to 60% of these businesses adopting new technologies to combat the issue.

World-Check is a highly structured database of intelligence on heightened risk individuals and organizations. Widely adopted by financial services companies, it supports the KYC and Third-Party Risk due diligence process and helps uncover risks associated with sanctions, organized crime, fraud, money laundering, bribery and corruption, as well as modern day slavery and country risk.

Phil Cotter, Managing Director of the Risk business at Refinitiv , said,

Phil Cotter

“We are delighted to support Ovo in its journey to becoming Indonesia’s primary payment method with our trusted intelligence. As we continue to fight the uphill battle against financial crime, our World-Check offering meets the crucial KYC and third-party screening needs for OVO to serve Indonesian consumers, as well as the regulatory obligations as it grows its business.”

Harianto Gunawan , Director at OVO , said,

“OVO’s adoption of World-Check highlights our continued commitment to building a robust security infrastructure to support Indonesia’s vision for a future-proof and digital economy. It also ensures that we remain vigilant in countering financial crime, which is critical to the success and future of our business. As Indonesia’s digital economy continues on its path to growth, OVO will continuously evolve and adapt to anticipate our customer’s needs, while maintaining industry leading security standards.”

Go-Jek announced that it will integrate its rival e-wallet, LinkAja by the end of this year, which means that it will operate alongside Go-Pay within its extended ecosystem.

Go-Pay is an extension of Go-Jek and often, seen as a rival to LinkAja.

The collaboration, according the press release, aims to reach those untouched by formal financial services.

The Jakarta Post further stated that LinkAja seemed less vocal about the partnership with Go-Pay compared to Budi Gandasoebrata, Go-Pay’s managing director.

The article further stated that LinkAja, with shareholders all from state-owned enterprises, has been positioned as their response to the growth of private e-wallets like Go-Pay and OVO: both Indonesia’s most popular wallets.

LinkAja’s strategy in overtaking the two rivals is by leveraging its network of SOEs, like market leaders like Pertamina and Telkomsel, are market leaders.

Featured image via LinkAja

Visa, has invested in GOJEK, as part of the latter’s ongoing Series F fundraising round. The two companies will work together to provide greater options for cashless payments and more seamless experiences for consumers across Indonesia and Southeast Asia.

With GO-PAY’s position as one of Indonesia’s market leader in digital payments and financial inclusion, this round of funding will support the acceleration of GOJEK’s payment services across Southeast Asia.

The partnership will see GOJEK and Visa collaborating on payment solutions for digital-first consumers and Southeast Asia’s unbanked and underserved population.

Financial inclusion in Southeast Asia continues to be an urgent and important issue. The vast majority of Indonesia’s transactions are still cash-based and the adoption of digital payment services is as low as one in four users in markets like Vietnam.

Addressing this opportunity could increase Gross Domestic Product levels by between 9% and 14%, even in relatively large Southeast Asian economies.

Visa Regional President Asia Pacific, Chris Clark said,

Chris Clark

“We are excited about this partnership because Visa and GOJEK share common objectives. We both want to make everyday life more convenient, whether it’s how people move around town in Southeast Asia’s fast-growing urban areas, or making it easier for people to pay and be paid all over the world. We also have a shared goal to bring formal financial services to the unbanked and underserved, including micro, small and medium businesses. Through this partnership, we will explore ways to leverage the power of GOJEK and Visa’s networks to expand financial access in Southeast Asia.”

GOJEK President Andre Soelistyo said,

Andre Soelistyo

“We’ve been humbled by investor support over the course of our current fundraising round as they have truly shown confidence in our long-term vision of powering the next phase of technology-enabled growth in Southeast Asia. Visa’s investment in GOJEK is an endorsement of our business model and reflects their belief in GOJEK’s ability to improve the lives of people across the region through our services and payments ecosystem.”

GO-PAY CEO Aldi Haryopratomo added,

Aldi Haryopratomo

“GO-PAY and Visa share a collective vision of enabling convenient and seamless transactions for consumers across socio-economic groups. Having driven the adoption of digital payments in Indonesia to improve incomes and lives, we are delighted to work with Visa to collaborate on further expanding our solutions to consumers across Southeast Asia. Together with Visa, we will have the unique opportunity to provide greater access to cashless payments across the region.”

Featured image credit: Screengrab from Youtube

Grab announced today it will invest US$2 billion into Indonesia over a period of five years with the capital invested by SoftBank, to accelerate the development of the country’s digital infrastructure.

The investment will go towards creating a next-generation transportation network for cities and transforming how critical services, like healthcare, are delivered.

The initiatives were announced after a meeting between Indonesia’s President Joko Widodo, Masayoshi Son, Chairman & CEO of SoftBank Group, Anthony Tan, CEO of Grab and Ridzki Kramadibrata, President of Grab Indonesia, at the Merdeka Palace in Jakarta.

SoftBank, which invested US$1.46 billion in Grab earlier this year, will seek to grow its presence in Indonesia. To play its part in helping Indonesia achieve this ambition, SoftBank will invest the US$2 billion into the country through Grab, to drive the digitization of crucial services and infrastructure.

Grab and SoftBank will invest to create a next-generation transport network for Indonesia based around an electric vehicle (EV) ecosystem that will drive cities toward a greener and cleaner transportation grid. Both companies will also develop geo-mapping solutions for Indonesia, in order to drive the country’s development and adoption of future technologies.

Grab will also launch affordable e-healthcare services in Indonesia, within the next three months, aiming to increase access significantly to doctors and medical services for all Indonesians.

As part of Grab’s long-term commitment to Indonesia, the company also announced plans for a second headquarters in Indonesia. It will house Grab’s rapidly growing R&D centre in Jakarta and will be the dual headquarters for the GrabFood business, which it claims is the largest food delivery provider across Southeast Asia.

Grab’s second headquarters will serve the unique needs of customers in Indonesia, and focus on developing solutions that empower micro-entrepreneurs, like Grab-Kudo agents. Relevant solutions will be introduced to other Southeast Asian emerging economies.

Masayoshi Son, Chairman & CEO of SoftBank Group said, “Indonesia’s technology sector has huge potential. I’m very happy to be investing US$2 billion into the future of Indonesia through Grab.”

Anthony Tan, CEO of Grab, said, “With our presence in 224 cities, Indonesia is our largest market and we are committed to long-term sustainable development of the country. We are delighted to facilitate this SoftBank investment, as we believe by investing in digitizing critical services and infrastructure, we hope to accelerate Indonesia’s ambition to become the largest digital economy in the region and improve the livelihoods of millions in the country.”

Since 2017, Grab has invested over US$1 billion into Indonesia through its Grab 4 Indonesia 2020 master plan, and its commitment to invest into Indonesian startups. Grab aims to double the number of micro-entrepreneurs in the country in five years, up from the 5 million created so far, with this additional US$2 billion commitment to Indonesia.

While much of this announcement is centered largely around transportation, food delivery and e-healthcare, much of this will play a big role in creating an ecosystem for it to compete against Go-JEK on a more equal footing.

Ever since Anthony Tan announced Grab’s fintech ambitions with Grab Financial in March 2018, he has made it clear that Indonesia is one of their primary markets. They reaffirmed that in March 2019 when they announced that they will be doubling down on their insurtech initiative in Indonesia.

As recent as November last year GO-JEK has also made similar announcement in taking the fight to Grab’s home turf, although they have not laid out specifically an investment commitment as Grab did with this announcement.

Singapore based fintech KOKU has announced its plans to expand into Indonesia.  Its regional expansion follows their successful US$2 million pre-series A funding round earlier this year, which was led by Decent Capital, an investment firm started by Tencent Co-Founder Jason Zeng.

KOKU works with Non-Bank Financial Intermediaries (NBFIs), building foreign exchange (FX) technology solutions. It is already exploring initial projects with NBFI partners in Indonesia.

The startup views Indonesia as an increasingly promising market with a high migrant population and increasing inbound and outbound remittance.

Through technology, there is immense potential for Indonesia to grow its remittance industry as well as contribute to the growth of the region’s e-payments and money transfer capabilities.

According to the World Bank, Indonesia’s economy has experienced tremendous improvements and growth, partly due to the contributions of its remittance industry.

Examples of this growth include double-digit growth of 24.7 percent in 2018, and a recorded transaction value of US$8.9 billion of foreign exchange by migrant workers in 2017. Indonesia is also considered as one of the top ten largest remittance recipients in Asia in 2018, per the Asian Development Bank’s estimates.

Calvin Goh

“Indonesia is uniquely fragmented, and for us this presents great opportunity to contribute to the growth of the country’s financial capability as well as the region’s. We offer technology that doesn’t silo growth, but enables our partners to grow to their strengths, whilst at the same time leaving room to collaborate and tap on the strength of others. KOKU envisions greater growth opportunities for the industry by leveraging technology to deliver financial inclusion and change the way of life for Indonesians,”

said Calvin Goh, Founder and CEO of KOKU.

As part of KOKU’s strategic plans to expand into Indonesia, KOKU will move to collaborate with partners who possess expertise of the local market. These partners include e-wallet players, micro-lending and payment companies, remittance and money exchange businesses.

Partnerships with these NBFIs will be centered around the integration of KOKU’s technology into existing operations – ensuring that partners have the ability to go-to-market quickly and without disruption to their business.

In addition, KOKU is potentially exploring opportunities to partner with local supermarkets and convenience stores, which will act as points of access to financial services, which will help the unbanked community move closers to financial inclusion.

Featured image credit: Koku