Fairbanc Receives Additional 72 Billion IDR Pre-Series A Funding Led by Vertex Ventures
The funds will be used to launch expansion in Indonesia as well as explore new markets such as Vietnam and the Philippines
Startups fintech Fairbanc announced the acquisition of additional fresh funds in a pre-series A round of $4,8 million (worth 72 billion Rupiah) led by Vertex Ventures, with participation from the Asian Development Bank, Accion Venture Lab, and Indonesian conglomerate Lippo Group.
The new funding is aimed at expansion in Indonesia and will help the company explore new markets such as Vietnam and the Philippines in its partnership with Unilever.
The Fairbanc platform allows MSMEs to take short-term credit to purchase FMCG goods from brand principal big. The company has partnerships with 13 brands, including Unilever, Nestle, Coca-Cola and Danone.
In 2020, US-based Fairbanc raised undisclosed funding from 500 Global and Indonesian billionaires, including from Sampoerna Strategic CEO, Michael Sampoerna. Following the investment, the startup has ventured into Indonesia. One year later, Sampoerna Strategic Group again participated in the A pre-series round, with ADB Ventures, Accion Venture Lab, and East Ventures.
The company has accepted more than 350.000 merchants in the past year. Around 75.000 of these merchants use BNPL's services at Fairbanc, which allows them to purchase high-margin products. Fairbanc is looking to scale quickly by leveraging a wholesale network of partner consumer brands.
According to a Unilever survey, 80% of Fairbanc beneficiaries are unbanked and around 70% are female traders who were able to increase their sales by an average of 35%.
Thanks to its partnership with a major FMCG brand, Fairbanc makes it possible to provide BNPL loans to retailers without the need to apply via a smartphone. The company uses AI-based credit scoring that can help process microcredit loans instantly.
With a system that is integrated into various consumer brands, Fairbanc can access merchant orders and payment track records. Companies can further utilize this data to perform underwriting loans and boost merchant sales by keeping operating costs low.
This business concept is slightly different from the others. Fairbanc makes money by optimizing direct cash payments to distributors and using discounts from sales volumes. That way, micro merchants are not charged with interest and additional fees from FMCG merchants and their distributors.
A similar concept has actually been accommodated by several fintechs in Indonesia through invoice financing services for businesses. One of the startups that have launched this solution is Investree, Modalku, and CloudCash.