Funding Societies, an SME crowdfunding and alternative investment platform based in Singapore, became a recipient of an undisclosed amount of funding support from Samsung Venture Investment Corporation (SVIC), the venture capital arm of Samsung Group.
The FinTech startup intends to use the newly secured funds for the expansion of its tech team across Southeast Asia. Funding Societies seeks to hire the best tech and data talents in the region.
Also, Funding Societies plans to use some of the funds for the development of its strategic and new business models. The company wants to improve its systems further to advance its mission of attaining wider financial inclusion for small and midsize enterprises in Southeast Asia.
SVIC expressed optimism in the outcomes of the funding support extended to Funding Societies, lauding the company’s solutions. “Funding Societies’s digital financing solutions effectively bridge the SME credit gap in Southeast Asia and we are confident that they will continue to lead the region’s digital lending industry and finance the future of these economies,” SVIC conveyed in a written statement.
As part of the funding deal, Funding Societies is required to form a strategic alliance with Samsung Ventures and Samsung Life Insurance Co. to come up with prospective partnerships and collaborations that support the goal of extending financial inclusion for SMEs.
Established in February 2015, Funding Societies was the pioneering SME digital financing platform in Singapore to employ an escrow agency to manage investor funds securely and independently. The company itself does not provide the amounts being loaned out to SMEs. It only serves as a platform to connect borrowers to retail and institutional lenders in Singapore, Malaysia, Indonesia, and other parts of Southeast Asia.
Funding Societies uses a proprietary scoring model to make decisions on online loan applications. These loans are unsecured but guaranteed by the personal promise of the business owners that apply for loans. Interest rates are determined based on the credit scores computed on approved applications.
As of November 2020, the company claims to have already extended more than $1.4 billion to SMEs in approximately 3.3 million loans. Hitting the $1 billion milestone earned Funding Societies the distinction of being the largest SME digital funding platform in Southeast Asia.
Funding Societies started with support from various VC firms. For its series A funding, it raised $10 million in a round led by Sequoia India and Alpha JWC Ventures. For its series B funding, the company secured $25 million with Softbank Ventures Korea, Sequoia India, Alpha JWC Ventures, and Golden Gate Ventures leading the round.
Moreover, the SME digital financing company completed its series C funding round in the early part of 2020, wherein it raised $40 million. The lead investors for this round were Softbank Ventures Asia Corp, Sequoia India, BRI Ventures, Endeavor, SG Innovate, and Qualgro Partners.
The company was recently granted an exemption by the Ministry of Law of Singapore, allowing it to offer loan services to sole proprietors. The Ministry also gave the company a tax exemption that waives taxes on interest returns for investors starting in 2020.
A recognized partner to SMEs in Southeast Asia, Funding Societies is listed as one of the Top 100 FinTech companies of the world by KMPG and was conferred a Brands for Good award in 2019.
Featured image: Kelvin Teo and Reynold Wijaya, Co-Founders of Funding Societies