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Parent Kredivo Announces IDR 4 Trillion Series D Funding, Led by Mizuho Bank

Fresh funds are focused on expanding the financial ecosystem Kredivo, as well as making the most of Krom's digital bank debut

Kredivo Holdings (rebranding from FinAccel) announced series D funding worth $270 million or the equivalent of IDR 4 trillion. This round was led by Mizuho Bank Ltd., a subsidiary of Mizuho Financial Group Inc. from Japan – noting that the company participated $125 million in this round of the series.

In addition to previous investors Kredivo also involved, such as Square Peg Capital, Jungle Ventures, Naver Financial Corporation, GMO Venture Partners, and Openscape Ventures.

Evercore, a leading global independent investment banking advisory firm, is acting as exclusive financial advisor in this series D equity transaction, and Cooley LLP is acting as legal counsel.

Previously there were rumors regarding this funding widely discussed at the end of 2022.

Even though it has a main office based in Singapore, its main product Kredivo Holdings is marketed to primary users in Indonesia. Their main service is the platform paylater Kredivo, which has now been integrated into 1000+ retailers online and offline in Indonesia. The company also operates KrediFazz, a service consumers who have distributed around IDR 37 trillion in funds to more than 4,8 million users.

Now they also operate a digital banking business through brands Krom Bank Indonesia, this is a follow-up to the company's acquisition of a majority stake in International Business Bank.

"Kredivo has an extraordinary track record in Southeast Asia, leveraging deep data partnerships to increase financial inclusion in Indonesia and Southeast Asia, while maintaining bank-grade risk metrics and building a capital efficient business model," said Group Executive Officer Deputy Head of Retail & Business Banking Company of Mizuho, ​​Daisuke Horiuchi.

Target after funding

Through this funding injection, Kredivo wants to expand the financial services ecosystem through paylater, cash loans, physical and virtual cards, as well as supporting the launch of neobank, Krom.

CEO Kredivo Holdings Akshay Garg said, “The upcoming expansion into digital banking is highly synergistic with the product Kredivo existing and also opens up very promising opportunities for us to become the digital financial services platform of choice for tens of millions of consumers in Southeast Asia. Therefore, we are very pleased to have Mizuho on board as our valued investor and strategic partner.”

In segment paylater, Kredivo facing a number of players in Indonesia. One of the biggest – which also has status unicorn as Kredivo-is Akulaku. Last year Mitsubishi UFJ Financial Group Inc. (MUFG) provided an investment of $200 million. This is the second strategic investment received by Akulaku in that year. Previously, they obtained funding of $100 million from Siam Commercial Bank (SCB) in early 2022.

A number of paylater players in Indonesia / DSInnovate (2021)

While in the neobank segment, this business is still growing, filled with innovation from digital companies. Recently a superbank was initiated Grab, EMTEK, and Singtel. Astra and WeLab are also heading there after acquiring a majority stake in Bank Jasa Jakarta.

However, since 2021, a digital banking ecosystem has actually begun to form in Indonesia with the presence of dozens of products targeting the same segment. This includes innovations born from the banking company itself.

More Coverage:

Competitive map of digital banks in Indonesia / DSInnovate (2021)

Recent equity funding Kredivo Holdings are clearly important ammunition to help companies present value propositions amidst an increasingly fierce industrial competition climate. However, the opportunity is still very big.

In 2021, credit card penetration in Southeast Asia is new around 9,98% only. Services paylater bridging this gap, making it easier for consumers to get similar facilities with an easier and digitalized process. Meanwhile, digital banking services also target 51% unbanked and 26% underbanked of the 181 million young people in Indonesia.

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