It has crowdfunded 37 SMEs in just six months since launched.
As Singapore continues to pursue its vision to be a Smart Nation, financial technology startups are rushing to revolutionise the industry. P2P lending, a proven model in US, Europe and Australia and serving as a form of alternative financing to SMEs and alternative investment to retail investors, is gradually being introduced to Singapore. One of which is Funding Societies, a P2P lending platform for SMEs to secure loans for growth, and crowdfunded by retail investors.
Founded in February 2015 by Kelvin Teo and Reynold Wijaya, the platform was launched in four months. Surprisingly, in just six months, the team has crowdfunded more than S$3m for 37 SMEs by December 2015 with 0% default to-date. The founders claim that in a short period of time, their achievements so far have made them the fastest-growing and safest platform in SEA. They have also been recognized by several award-giving bodies in the region.
According to Kelvin, co-founder and director of Funding Societies, who is also a Chartered Accountant, they started Funding Societies while he and Reynold were in Boston doing their MBA at Harvard.
“We couldn't wait for our graduation in May 2016 to start for fear of missing the market (neither could we drop out due to family reasons). Hence, we hired our first team in Singapore and Indonesia all via internet (Skype, email and i-banking). The first time we physically met our team was in June 2015, five months after they've joined us,” said Kelvin.
The platform is then built to solve two problems: one is as SMEs' lack of access to financing for growth and two is because casual investors' lack of good, short-term investment. The founders knew that P2P lending is the answer to these problems.
“By leveraging on technology and credit research, we identify non-bankable but creditworthy SMEs looking for loans and enable retail investors to crowdfund these loans in exchange for good monthly returns,” said Kelvin.
The platform differentiates itself from others through technology and management practices. In terms of technology, Kelvin explained that the end-to-end investing and borrowing process are conducted via their online platform, with the use of e-signature, online know-your-customer (KYC) check and internet banking. Kelvin added that their innovative credit assessment method helps to keep defaults low (currently zero).
“We're also the first and only platform to use an escrow agency to handle funds, and to be a signatory of the internationally recognized Small Business Borrower Bill of Rights,” he said.
Two months after the Funding Societies was launched, they have raised venture capital from SPH Media Fund (Singapore), Alpha JWC Ventures (Indonesia, whose co-founder Chandra Tjan invested in Indonesian techstars Tokopedia and Traveloka) and several angels.
Moreover, Funding Societies have already launched a P2P lending platform in Indonesia called Modalku last January 13, 2016. They plan also to scale up in Singapore and Indonesia, while leveraging on technology and marketing.
Kelvin Teo, 29, a Malaysian and Singapore PR, who came to Singapore at the age of 15 on the ASEAN scholarship. He graduated as the valedictorian of NUS Business School, before working as a consultant at industry leaders Accenture, McKinsey and KKR Capstone. He's a Chartered Accountant and currently sits on the young professionals advisory committee of the Institute of Chartered Accountants Singapore.
Reynold Wijaya 27, an Indonesian who graduated Summa Cum Laude from the University of Michigan with a Master and Bachelor in Engineering, before working as a leading executive in a reputable family business conglomerate in Indonesia. He's also the co-founder of Let's Go to School in Indonesia, a non-profit organization committed to help financially-challenged children resume education. Both founders Reynold and Kelvin are finishing their MBA at Harvard Business School, while running the startup full-time.
Company Name: Funding Societies
Founders: Kelvin Teo and Reynold Wijaya
Source of funding: SPH Media Fund (Singapore), Alpha JWC Ventures (Indonesia, whose co-founder Chandra Tjan invested in Indonesian tech stars Tokopedia & Traveloka) and Angel Investors
Start of Operation: June 2015
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