The backbone of the Indonesian economy is Estimated over 60 million SMEs.. However, many lack access to working capital, and especially before the pandemic, they used manual processes such as spreadsheets to manage their finances. As COVID-19 encourages many to digitize, start-ups focusing on small businesses are raising large sums of money to scale up quickly. KoinWorks It’s the latest. Indonesia-based SME-based financial platform today announced that it has raised $ 108 million in Series C funding led by MDI Ventures. The round included $ 43 million in equity and $ 65 million in debt capital for working capital loans provided by KoinWorks to clients.
This round brings KoinWorks to a total of $ 180 million. Existing investors returning to the latest round include Quona Capital, Triodos Investment Management, Saison Capital, ACV and East Ventures. The new funds will be used to hire about 400 new employees and scale KoinWorks’ latest product suite, SM Neobank.
KoinWorks is headquartered in Jakarta, headquartered in Singapore, and technical offices in Yogyakarta, India and Vietnam. KoinWorks was originally created to give working capital access to SMEs, who are often turned away from traditional financial institutions. Since then, we have also developed a comprehensive platform for financial tools to increase customer sales, such as e-commerce vendors and social commerce sellers.
TechCrunch Koin Works first profiled in 2019 When raising $ 12 million for a lending platform. During the COVID-19 outbreak, more companies went online, and startups tripled their user base to 1.5 million customers and 100,000 SMEs participating in new financial software. Demand increased as the waiting list for. Co-founder and chairman Willy Arifin emailed TechCrunch that monthly loan payments have tripled to nearly $ 50 million and revenues have quadrupled since 2019.
KoinWorks focuses on small businesses that may not have a bank account or credit card due to poor traditional financial institution services. The platform allows users to create online bank accounts and cards, borrow working capital, and access accounting, point of sale, early wage access, and HR management systems for small businesses.
According to Arifin, KoinWorks’ monthly payments reached $ 50 million per month, so take rates have risen sufficiently, cash flow has been positive earlier this year, and the non-performing loan (NPL) percentage has fallen below 2%. I am. He says banks servicing traditional small businesses have at least twice as much bad debt as KoinWorks. “During a pandemic, as many as 20% of companies moved their sales channels from offline to online, and 89% now use online channels to sell their products and services,” he said.
Over the last three years, KoinWorks competitors have grown to include other neobanks and startups that started out as accounting software, but have expanded to include working capital loans and other financial services. Two notable examples include rivals Buku Warung and Buku Kas, both of which have raised significant funding.
“When we started, we were among hundreds of traditional financial institutions. Fast forward to today and you’ll see that the same bank is now digitized,” Arifin said. I am saying. “Nevertheless, Indonesia’s annual funding gap is US $ 80 billion, so people without or lacking bank accounts are still at a disadvantage. There is still room for improvement.”
“It’s not a winner-dominated market,” he added, given Indonesia’s tens of millions of entrepreneurs. The total market value of the top five banks in the country is close to US $ 160 billion. There will definitely be fintech companies working on bankless / bankless spaces, but KoinWorks has taken a best-in-class approach to meet the needs of small businesses and entrepreneurs, making it a big part of the future sector. I think it will have an impact.
In a statement, Donald Wiharia, CEO of MDI Ventures, said: We are excited to work with a team that understands the importance of each step in entrepreneurship and the growth journey of small businesses. “
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