Indonesian fintech startup Investree is aiming for the Philippines to become its third market next year. Apart from that, the startup is also preparing a strategy of setting up several subsidiaries to accelerate the SME financing.
Investree Co-Founder and CEO Adrian A. Gunadi explained that the company’s Southeast Asian expansion move had revealed that SME across the region are facing a similar issue. A great number of underserved communities in these markets are providing an opportunity for Investree to seize.
“The problem [that they are facing] is the same: Many SMEs are still untouched by banks. This provides a unique case study, that Indonesian fintech companies have the opportunity to expand region-wide. Many of these markets ended up copying what has been done in Indonesia, from products to regulation,” he told the press on Thursday, May 21.
The expansion to the Philippines will begin next year, but the company has found a potential partner to help with the operations. The potential partner has even visited Indonesia to see how things are being run in the field.
Earlier this year, Investree has named Thailand as its first international expansion location. Together with eLoan, the company has worked with local partners and conducted a soft launch in April.
In the meantime, it is actively building connections with several ecosystems to accelerate their expansion plan. However, the company has not begun any business activities as they are required to enter a regulatory sandbox programme by the authority in Thailand.
“This month we are going to register ourselves to a regulatory sandbox so that we can start channeling financing,” Gunadi said.
He further explained that Vietnam was the second country that the company has expanded to. But since the regulation in the market has not accommodate the business model that Investree is implementing, they are operating manually there. Despite the challenge, Investree claimed to have channeled up to IDR144 billion (US$10 million) of financing in the market.
“Vietnam does not implement the host-to-host system as the regulation is yet to accommodate the system. We are operating the way we did in Indonesia four years ago in the market; the data are being uploaded manually. But regulators in the country plans to accelerate the implementation of sandbox in the second semester as they are trying to catch up with Indonesia,” Gunadi said.
According to Gunadi, once the expansion plans has been finalised, the company plans to start fundraising for their Series C funding round. The early stages of their expansion plan is being supported by the funds from their Series B round last year, led by SBI Holdings.
Setting up subsidiaries
In order to further develop Investree’s business in Indonesia, the company plans to launch new subsidiaries by setting up joint ventures with partners in the logistics, supply chain, and other sectors with strong relations to SME financing.
Gunadi did not mention specific details on the number of subsidiaries that they are planning to set up, which may go beyond two companies. He assured that the announcement will be made after June.
“It will be in the form of a strategic partnership. So that we are going to have a captive market,” he said.
Through the subsidiaries, the company will be able to acquire SMEs more effectively as there will be no need for them to approach the SMEs one-by-one. When entering a new ecosystem, this can serve as an added value.
Gunadi also stated that from the point of view of capital expenditure in setting up a new business, the company will be able to manage their budget more effectively as the company that they plan to work together with are already working in the tech sector. They only need to integrate their existing systems.
Accumulatively, by April, Investree has channeled up to IDR2.1 trillion (US$144 million) in financing and grew 82 per cent YOY. Its sharia-based service Investree Syariah has channeled IDR69 billion (US$4.7 million) and grew 311 per cent since it was first launched eight months ago.
The number of retail lenders on Investree has reached 14,375 individuals; there are also institutions such as BRI and Credit Saison while the number of loan receivers has reached 1,084 businesses. Seventy per cent of them are repeat customers.
The article Investree Segera Rambah Filipina dan Buat Beberapa Anak Usaha Baru was written by Marsya Nabila in Bahasa Indonesia for DailySocial. English translation and editing by e27.