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The funding landscape in Southeast Asia is still in its infancy, but one fintech has managed to land a major round. Creditivo Holdings, which provides credit services to customers in Indonesia and Vietnam, has raised $270 million in what it says is an oversubscribed Series D.
The Japanese bank Mizuho Bank, a subsidiary of Mizuho Financial Group, contributed $125 million in the round. It includes 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 about $400 million in equity, and has committed approximately $1 billion in credit facilities to grow its loan book.
Akshay Garg, CEO of Credivo, declined to disclose Credivo’s current valuation, but told TechCrunch that historically it has risen by 4x to 5x in each valuation round. He added that Kredivo now drives 3% to 4% of total GMV for Indonesia’s top e-commerce merchants, while credit cards account for 15% to 20%.
The company nearly went public last year in a $2.5 billion SPAC deal, but nixed it, citing negative market conditions. Garg said there are no plans to recapitalize the SPAC and that Kredivo is “happy to remain private for the time being” and then evaluate options for a public listing.
Asked how many active users Kredivo has, Garg said its authorized user base is “the same size as Indonesia’s credit card population right now and we plan to surpass it in the next year or two.” According to Bank Indonesia, there are 15 million to 16 million credit cards in circulation, but Credivo’s survey shows that most credit card holders have two, so the number of special card holders is about half of that number.
Credivo Founding Team. Image credit: Credivo
Kredivo, formerly known as FinAccel, is the Indonesian parent company of Kredivo and Krom Bank, and is the new Neobank. The company’s products include online and offline shopping, pay later, personal loans, credit cards and banking services in Chrome.
“NeoBanking is a great fit with Credivo’s existing business, and offers a huge business opportunity given the size of the unbanked and unbanked consumers in Indonesia,” Garg said. Pending final regulatory approval, the Chrome service will launch in deposit and transaction banking this year.
Credivo is also developing an open-loop credit card-like product, including the Infinite Card, a virtual card with Mastercard, and an offline card, FlexiCard, in direct partnership with online and offline merchants.
Credivo’s target demographic is underbanked consumers or consumers who have bank accounts but are underserved due to poor credit bureau infrastructure and traditional banks’ reluctance to provide unsecured loans. Rather than relying solely on traditional credit bureaus, Credivo measures consumers’ creditworthiness through data sources such as telcos, e-commerce accounts and bank accounts.
Another is that Kredivo de-risks (reduces the cost of credit) by targeting urban, white-collar, employed customers, usually with bank accounts, compared to competitors who target high-risk consumers and charge similarly high interest rates.
Kredivo’s direct and indirect competitors include Akulaku’s BNPL and Bank Neo Commerce (a fintech that recently raised a large funding round from a Japanese bank), Advance.ai’s Atom BNPL service and Kredit Pintar’s money lending and sea group Sea Money.
Daisuke Horiuchi, the company’s vice head of retail and commercial banking, said in a statement about the investment: “Kredivo has a strong track record in Southeast Asia, leveraging its deep data partnerships to promote financial inclusion in Indonesia and the Southeast. Asia is maintaining bank-like risk metrics and building a capital-efficient business model.
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