Investree Acquires Part of Mbiz Shares, Starts Developing Infrastructure to Support SME Business

Platform Investree announces the acquisition of platform shares b2b procurement Mbiz with an undisclosed transaction value, as an effort to start the construction of SME business support infrastructure that is not only about financing.

Investree Co-Founder & CEO Adrian Gunadi was reluctant to give more details about the percentage of shares taken by the company in Mbiz. He only mentions quite significant, because the company puts observer board within the Mbiz board of directors.

board observers is a position at the level of the board of directors and can attend regular company meetings. However, they do not have the authority to make business decisions.

"Investree's future strategy will not only offer financing course, but a business solution for SMEs. Instead of waking up alone procurement, it is better to make a strategic partnership by becoming a shareholder," he explained, Friday (27/12).

Adrian admitted that the process of acquiring these shares had been carried out for almost a year and started with working capital financing for beg. The partnership announced in the third quarter This year. It is said that there are dozens of Mbiz users consisting of vendors and buyers who take advantage of financing facilities worth Rp90 billion.

According to him, Mbiz is interesting because it has a unique structure, has vendors and buyers that match what Investree is after. The digitization of SMEs can be done through e-procurement because the transaction process for the procurement of goods and services is transparent, accountable, and the business is more competent.

The digital transformation of SMEs in Indonesia is only 8% or 3,92 million of the total 59,2 million actors present in Indonesia. Also supporting the report from McKinsey & Co, potential e-procurement in Indonesia to reach $125 billion by 2025. This estimate is a combination of global corporate services ($18 billion), b2b marketplace ($76 billion), and b2b services ($36 billion).

Meanwhile, the leading players in Indonesia are still dominated by companies engaged in the b2c marketplace (Lazada, Tokopedia, Shopee, Bukapalak), transportation, travel, and hospitality (Traveloka), and mobility (Gojek and Grab).

Mbiz CEO Rizal Paramarta explained, for his company, the inclusion of Investree as a shareholder strengthens the company's commitment to become a leading player in the business. e-procurement. In the next year there will be many product developments from Investree that are devoted to targeting more Mbiz clients.

"So far we've only met buyer and seller only, even though we want to create an ecosystem end-to-end for solution procurement. We enter the initial stage with financing because this b2b transaction cannot be separated from the need for working capital," he said.

Through the Mbiz.co.id platform and Mbizmarket, SMEs together with vendors of goods and services will have access to working capital to market their business. So far, vendors have experienced production difficulties due to unfriendly payment terms , making it difficult for them to develop the business further.

The presence of Investree on the Mbiz platform is expected to be an effective solution for companies or institutions buying goods and services that experience a time gap to make payments to vendors, while the need for goods or services that are transacted is in an urgent condition.

Rizal added that the entry of Investree also marked the entry of the second external investor after Tokyo Century Corporation during the series A round in 2017. In that round, the company received fresh funds of Rp. 1 trillion. Investree, he continued, entered into two methods, namely equity funding and dominated by debt financing.debt).

"This is our second investor, after Tokyo Century because our business model is not to burn money, b2b buyers are rational, so they are not suitable when offered promotions."

Mbiz is a subsidiary of Multipolar, part of the Lippo Group which was founded in 2015. Lippo was also an angel investor when Mbiz was founded.

Next plan

The results of these corporate actions will be carried further for expansion Investree in Philippines. This expansion will be inaugurated in January 2020 under the Investree Philippines brand. There the company will provide financing solutions e-procurement because the condition is more or less like Indonesia.

Adrian admitted, the company is in the final stages of discussions with local conglomerates that have various business lines from hotels, properties, planting, to the bank, to solve the problem procurement there.

After Mbiz, the company will target other companies engaged in the SME business support ecosystem. The location is not only in Indonesia, but also in Southeast Asia. Adrian admitted that he had seen several prospective companies, but could not say further. One of the targeted sectors is in logistics.

As of mid-December 2019, Investree recorded a total loan facility of IDR4,28 trillion and the value of disbursed loans of IDR3,19 trillion. Investree is already operating in Thailand and Vietnam (under the eLoan brand).

Adrian said that when the regulations in Vietnam were completed, there was a high possibility of changing the brand to Investree Vietnam. Naming question brand this also concerns the percentage of shares owned by Investree there with eLoan.

"Our share ownership in Vietnam is a minority. Later, if the regulations fintechit's ready, then there is a consideration to add shares and use the Investree branding," he concluded.