Southeast Asian credit fintech Kredivo scores $270 million in Series D

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The financing landscape in Southeast Asia remains wintry, but one fintech managed to land a big round. Kredivo Holdings, which provides credit services to underbanked consumers in Indonesia and Vietnam, has raised $270 million in what it says was an oversubscribed Series D.

The round was led by Japanese bank Mizuho Bank, a subsidiary of Mizuho Financial Group, which contributed $125 million. It included participation from returning investors such as Square Peg Capital, Jungle Ventures, Naver Financial Corporation, GMO Venture Partners and Openspace Ventures.

The company has now raised around $400 million in equity, and has committed nearly $1 billion in debt facilities to expand its loan book.

Kredivo CEO Akshay Garg declined to disclose Kredivo’s current valuation, but told TechCrunch that it has increased 4x to 5x “in every valuation round historically.” He added that Kredivo now drives 3% to 4% of total GMV for its top e-commerce merchants in Indonesia, compared to 15% to 20% from credit cards.

The company nearly went public last year in a $2.5 billion SPAC deal, but turned it down, citing adverse market conditions. Garg said there are no plans to revive the SPAC and that Kredivo is “content to stay private for the time being” and will evaluate public listing options later.

Asked how many active users Kredivo has, Garg said the approved user base is “now in the same range as the credit card population in Indonesia, and we intend to surpass it in the next year or two.” According to Bank of Indonesia, there are about 15 million to 16 million credit cards in circulation, but Kredivo’s research found that most credit card holders have two, so the number of unique card holders is about half that number.

Kredivo’s founding team

Formerly known as FinAccel, Kredivo is the parent company of Kredivo and Krom Bank Indonesia, its new neobank. The company’s products include online and offline buy now, pay later, personal loans, credit cards and banking services through Krom.

“Neobanking is very synergistic with our existing Kredivo business, and offers a very large business opportunity in its own right, given the scale of unbanked and underbanked users in Indonesia,” Garg said. Krom’s services will be launched with deposits and transaction banking this year, pending final regulatory approvals.

Kredivo is also building an open-loop credit card-like product, which includes Infinite Card, a virtual card partnership with Mastercard and offline card Flexicard, through direct partnerships with online and offline merchants.

Kredivo’s target demographic is underbanked consumers, or people who have access to bank accounts but little access to credit due to poor credit bureau infrastructure and traditional banks’ reluctance to offer unsecured credit. Since Kredivo does not rely solely on traditional credit bureaus, it measures the creditworthiness of potential consumers through data sources such as telephone services, e-commerce accounts and bank accounts.

Another way Kredivo reduces risk (and lowers the cost of credit) is by targeting urban, working-class employees, usually with bank accounts, compared to competitors who target higher-risk consumers and charge correspondingly higher interest rates.

Kredivo’s direct and indirect competitors include Akulaku’s BNPL and Bank Neo Commerce (the fintech also recently raised significant funding from a major Japanese bank), Advance.ai’s Atome BNPL service and Kredit Pintar cash loans and Sea Group’s Sea Money.

In a statement about the investment, Mizuho Group CEO, Vice President of Retail and Commercial Banking said, “Kredivo has an amazing track record in Southeast Asia, leveraging its deep data partnerships to advance financial inclusion in Indonesia and Southeast Asia, while maintaining bank-like risk metrics and building a capital-efficient business model.”