Funding Societies, a Singapore-based digital financing platform for small and medium enterprises (SMEs), was officially launched in Vietnam on Tuesday, marking its fifth expansion into the market.
Addressing the SME funding gap in Vietnam, where the SME landscape is growing but financially underserved, is a natural next step for the fintech company as it expands further into Southeast Asia, said finance companies in a statement.
As the leading digital SME lender in Southeast Asia, Funding Societies serves as a platform for SME financing with an artificial intelligence (AI)-based lending model, offering traditional term loans, customizable financing solutions and a range of trade-based financing options, such as invoice financing.
In its seven years of operation, the company has disbursed more than $2 billion in corporate finance through more than five million loans in the region.
“Since our inception in 2015, our vision has been to uplift societies in Southeast Asia. So, Vietnam has always been part of our roadmap. It’s an opportune time as we emerge from COVID-19, build a strong team with local FinTech veteran Ryan Galloway, and secure investment from tech giant VNG. We believe that Vietnam will be one of our biggest markets given its enormous potential,” said Kelvin Teo, co-founder and group managing director of Funding Societies | Modalku.
Earlier this year, Vietnamese tech giant VNG Corporation invested $22.5m in finance companies as part of the FinTech firm’s $294m Series C+ fundraising round, including $144m of dollars were raised in equity and 150 million dollars in debt lines.
The funding companies have also received support from other notable investors in the funding round, including SoftBank Vision Fund 2, Rapyd Ventures, EDBI, Indies Capital, Ascend Vietnam Ventures and K3 Ventures, among others.
VNG will help finance companies adapt quickly to the local market so that they can provide solutions tailored to the unique needs of Vietnamese businesses.
“Vietnamese SMEs do not have the same access to venture capital and seed capital markets as other Southeast Asian markets, but the Vietnamese market is just as competitive, so Vietnamese entrepreneurs are trained to do more with less. We see many opportunities in Vietnam and are excited to support the country’s burgeoning SME landscape as we continue to serve the needs of millions of SMEs across Southeast Asia,” said Ryan Galloway, national director of Funding Societies Vietnam.
“Building on the success of finance companies in other markets, we will improve turnaround times by further automating origination and underwriting to more effectively support Vietnamese SMEs,” he added.
Operating in Singapore, Malaysia, Thailand and Indonesia (where it is known as Modalku), Funding Societies is the only digital SME finance platform to be licensed and/or registered in four South Asian countries -East.
In Vietnam, it serves SMEs in various sectors such as education, retail, technology and fast moving consumer goods (FMCG), offering products such as trade finance, inventory finance, accounts receivable (AR) and accounts payable (AP) financing in and around Ho Chi Minh and Hanoi.
The company plans to roll out local currency digital finance capabilities nationwide in the second half of the year.
Since its soft launch in Vietnam in December 2021, finance companies have already made over $20 million in disbursements, and they are looking to boost that figure to $90 million this year.
To achieve this ambition, in Vietnam, the company is looking to work with technology platforms and banking partners to support its medium to long-term ambitions, in line with how it partners with banks and has recently invested in Bank Index in Indonesia.
At the same time, at the regional level, Funding Societies will continue to deepen its presence in the five countries where it operates, with new financing and neobanking products.
“SMEs play an important role in economic growth in Southeast Asia. It is difficult for them to access the financing and capital necessary to stimulate growth. Our investment in finance companies aims to create opportunities for SMEs and support their growth and development,
“As a local Vietnamese technology company, we are also well positioned to help finance companies expand into the Vietnamese market,” said Kelly Wong, Vice President of VNG Game Entertainment and Lead Game Business.
Funding Societies co-invests with Carro in the Indonesian banking index