Southeast Asian Digital Financial Services Market Sees Significant Funding Injection

“We Want to Pay It Forward”: Funding Societies Raises $25 Million to Boost Capital for SMEs in Southeast Asia

In a significant move, Funding Societies has secured $25 million in funding to strengthen its position as a leader in the digital financial services market in Southeast Asia. The capital injection will be used to expand its reach and increase access to credit for small- and medium-sized enterprises (SMEs) across the region.

According to an e-Conomy SEA Report 2024, digital lending is expected to rise significantly in Southeast Asia, accounting for around 65% of the total revenue. This growth presents a unique opportunity for Funding Societies to capitalize on the trend and cement its position as a market leader.

The company’s CEO, Teo, emphasized that the funding will be used to expand its reach and increase access to credit for SMEs in Southeast Asia. He noted that the startup made its first acquisition in December 2022 by acquiring Sequoia-backed payments fintech CardUp, which almost tripled its revenue while maintaining a flat headcount. This strategic move demonstrates Funding Societies’ commitment to growth through consolidation.

Teo also highlighted the challenges faced by SMEs in Southeast Asia, stating that “U.S. rate hikes have raised the cost of funds.” He emphasized the importance of providing affordable and accessible credit options for these businesses, which are crucial to driving economic growth and job creation.

The capital injection will also be used to invest in three companies, including a fintech firm and a startup specializing in POS software. This strategic investment will enable Funding Societies to expand its offerings and increase its reach across the region.

Funding Societies has made significant strides in the past year, with a report from 2020 revealing that MSMEs backed by the company contributed $3.6 billion to GDP and created approximately 350,000 new jobs. The company’s model of providing quick disbursement and simple application process has also helped SMEs boost their revenue by 13%.

The move is expected to have a significant impact on the digital financial services landscape in Southeast Asia, where fintech companies are increasingly focusing on credit solutions for small businesses.

Funding Societies’ commitment to paying it forward by supporting SMEs in Southeast Asia demonstrates its dedication to creating positive economic and social impact.

Source: techcrunch.com