A Singapore-based startup, Funding Society raised $7.5 million of Series A round, reported Tech Crunch. The company allows SMEs to access loans from individual or institutional lenders. The fund will be used to expand the operations in Malaysia, in addition to Singapore and Indonesia under the name ‘Modalku‘. Sequoia India led this investment round, along with several angel investors.
The company claimed it has paid out $8.7 million across 96 loans to date and has 94% repayment rate. Fund Societies CEO, Kelvin Teo said the data shows the company’s reliability.
Funding Societies is primarily focused on working capital loans, to finance the day-to-day operations in a company. In Singapore, the average loan size is $67,000 ($90,000 SGD) while the number falls lower to $18,500 (SG$25,000) in Indonesia. It charges an origination fee to the borrower (3-4% in Singapore, 5-6% in Indonesia) and 1% monthly fee to the lender. It claims to have an approval rate of between 15-25% for loan applicants.
The fund will be used to expand its SME loans operations in Malaysia, in addition to Singapore and Indonesia under the name ‘Modalku‘. Sequoia India led this investment round, along with several angel investors.
In addition to the expansion, the fund will also be used to comply with myriad of regulatory variations in the three countries where it currently operates. It prided itself on being compliant with regulations and ensuring the safety of investors money.
“Industry regulation has been announced in Singapore, but it will still take some investment to reach that level of compliance,” Teo added. Likewise, in Indonesia, he said the company is working with regulators to introduce a framework to regulate peer-based lending.
Outside of compliance and expansion — including expansion beyond capital city Jakarta in Indonesia — Funding Societies is planning to invest in its product to streamline its services for borrowers and lenders, add more services to make the investment options more tailored to the investor needs. The company target to reach breakeven in two-to-three-years.
A version of this appeared in Techcrunch on August 9. Read the full article here.