Southeast Asian credit fintech Kredivo secures $270m in Series D

The funding landscape in Southeast Asia is still wintery, but one fintech has managed to land a major round. Kredivo Holdings, which offers credit services to underbanked consumers in Indonesia and Vietnam, raised $270 million in what it says is an oversubscribed Series D.

The round was led by Japanese bank Mizuho Bank, a subsidiary of Mizuho Financial Group which contributed $125 million. It included participation from returning investors such as Square Peg Capital, Jungle Ventures, Naver Financial Corporation, GMO Venture Partners and Openspace Ventures.

The company has now raised a total of approximately $400 million in equity and committed nearly $1 billion in credit facilities to grow its loan portfolio.

Kredivo CEO Akshay Garg declined to disclose Kredivo’s current valuation, but told TechCrunch it has increased 4x to 5x “in every historical valuation round.” He added that Kredivo now generates 3-4% of total GMV for its top e-commerce merchants in Indonesia, compared to 15-20% for credit cards.

The company nearly went public last year in a $2.5 billion SPAC deal but called it off, citing unfavorable market conditions. Garg said there are no plans to relaunch SPAC and that Kredivo is “happy to remain private at this time” and will evaluate public listing options later.

When asked how many active users Kredivo has, Garg said its approved user base is “now in the same range as the credit card population in Indonesia and we intend to surpass it in over the next two years”. According to Bank Indonesia, there are about 15-16 million credit cards in circulation, but Kredivo’s surveys found that most credit card holders have two, so the number of credit card holders unique cards is about half that number.

Formerly known as FinAccel, Kredivo is the parent company of Kredivo and Krom Bank Indonesia, its new neobank. The Company’s products include online and offline buy-it-now, pay-later, personal loans, credit cards and banking through Krom.

“Neobanking is highly synergistic with our existing Kredivo business and offers a very large business opportunity in its own right, given the scale of unbanked and underbanked users in Indonesia,” said Garg. Krom’s services will launch with deposits and transaction banking this year, pending final regulatory approvals.

Kredivo is also building an open-loop credit card-like product, which includes Infinite Card, a virtual card partnership with Mastercard, and an offline Flexicard card, through direct partnerships with online and offline merchants.

Kredivo’s target demographic is underbanked consumers, or people who have access to bank accounts but little access to credit due to poor credit bureau infrastructure and the reluctance of traditional banks to offer credit. not guaranteed. Since Kredivo does not rely solely on traditional credit bureaus, it assesses the creditworthiness of potential consumers through data sources such as telecom carriers, e-commerce accounts, and bank accounts.

Another way Kredivo is mitigating risk (and lowering the cost of its credit) is to target urban, white-collar, employee customers, usually with bank accounts, versus competitors who target high-risk consumers and charge higher interest rates accordingly.

Kredivo’s direct and indirect competitors include Akulaku’s BNPL and Bank Neo Commerce (the fintech also recently raised significant funding from a major Japanese bank), Advance.ai’s Atome BNPL service, and Cash Lending from Kredit Pintar and Sea Money from Sea Group.

In a statement on the investment, the Deputy Managing Director of the Mizuho Group, Managing Director of Retail and Corporate Banking, said: “Kredivo has an outstanding track record in Southeast Asia, building on its deep data partnerships to promote financial inclusion in Indonesia and Southeast Asia, while maintaining bank-like risk measures and building a capital-efficient business model.