Komunal Raises $8.5M to Digitize Indonesia’s Land Banks • TechCrunch

Komunal reaches Indonesia’s rural customers by going where they are. Fintech works with more than 220 banks in tier 2 and tier 3 cities spread across 19 provinces. Founded in 2019, the startup announced today that it has raised $8.5 million in funding led by East Ventures Growth Fund, with participation from AlphaTrio Sustainable Technology Fund, Skystar Capital, Sovereign’s Capital, Ozora and Gobi Partners.

Komunal is digitizing rural banks, called BPRs (Bank Perkreditan Rakyat) through its DepositoBPR platform, which allows users to make deposits and apply for loans digitally without having to visit the bank’s physical location. In addition to DepositoPR, Komunal also has a peer-to-peer lending platform that connects MSMEs with lenders.

The startup says that in 2022, the platform channeled IDR 3.6 billion, or about USD 230 million, in deposits and loans to BPR and MSMEs, representing a 350% growth from USD 50 million in 2021. reaching more than USD $500 million by this year, and has recorded positive EBITDA since October 2022.

Komunal’s team

Komunal was founded three years ago as an SME financing platform based in Surabaya, East Java. CEO Hendry Lieviant told TechCrunch that the startup initially benefited from little competition because most lending fintechs were based in Jakarta, but then realized that a lack of data and Indonesian SME culture could limit scalability.

Another opportunity presented itself in the form of Indonesia’s 1,500 BPRs. “They have strong local connectivity, but their recent performance has been tepid, failing to catch up with digitization,” Lieviant said. “Together, they only accounted for about 2% of the Indonesian banking market, although they have much greater potential.”

Customers access banks through the DepositoBPR app. From there, they can select their rural banking and deposit product, create a virtual account and transfer money directly to it. Lieviant said they can also get state-guaranteed deposits with higher interest rates.

Komunal’s new funding will be used to market DepositoBPR and build the core banking system for rural banks. The company also announced that it has appointed Dr. Peter Jacobs, a former CEO of Bank Indonesia, as a commissioner, and will continue to hire for senior positions.