Kredivo Holdings, a Southeast Asian fintech that offers credit services to underbanked consumers in Indonesia and Vietnam, has successfully raised $270 million in its oversubscribed Series D funding round. Japanese bank Mizuho Bank led the round with $125 million, while Square Peg Capital, Jungle Ventures, Naver Financial Corporation, GMO Venture Partners, and Openspace Ventures also participated.
With the latest funding round, Kredivo has raised a total of around $400 million in equity and has committed debt facilities of almost $1 billion to grow its loan book. CEO Akshay Garg revealed that Kredivo’s current valuation has increased by 4x to 5x in every valuation round historically, though he did not disclose its current valuation. Garg also noted that Kredivo now drives 3% to 4% of total gross merchandise value (GMV) for its top e-commerce merchants in Indonesia, compared to 15% to 20% from credit cards.
Kredivo, formerly known as FinAccel, is the parent company of Kredivo and Krom Bank Indonesia, its new neobank. The company’s products include online and offline buy now, pay later, personal loans, credit cards, and banking services through Krom. Kredivo’s target demographic is underbanked consumers, who have access to bank accounts but little credit access because of poor credit bureau infrastructure and the reluctance of traditional banks to offer unsecured credit.
To gauge the creditworthiness of potential consumers, Kredivo uses data sources such as telcos, e-commerce accounts, and bank accounts. By targeting urban, white collar, employed customers, usually with bank accounts, Kredivo mitigates risk and lowers the cost of its credit, compared to competitors that target higher-risk consumers and charge correspondingly higher interest rates.
Kredivo’s competitors include Akulaku’s buy now, pay later (BNPL) service, Bank Neo Commerce, Advance.ai’s Atome BNPL service, Kredit Pintar cash loans, and Sea Group’s Sea Money. According to Kredivo’s surveys, its approved user base is now in the same range as the credit card population of Indonesia, which is estimated to be around 15 million to 16 million unique cardholders.
Krom’s services, which will launch with deposits and transaction banking this year, pending final regulatory approvals, are very synergistic with Kredivo’s existing business and offer a very large business opportunity in its own right, given the scale of unbanked and underbanked users in Indonesia, according to Garg. Kredivo is also building an open loop credit card-like product, which includes Infinite Card, a virtual card partnership with Mastercard, and offline card Flexicard, through direct partnerships with online and offline merchants.
Kredivo has opted to remain private for the time being and will evaluate public listing options later, according to Garg. The company nearly went public last year in a $2.5 billion special purpose acquisition company (SPAC) deal but decided not to due to adverse market conditions.