As humans, we often want instant gratification.
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But sometimes, our wallet isn’t ready for a flight, or a wedding dress, or an Instant Pot, or a burger through our favorite food delivery service.
So, Singapore-based FinAccel, along with a crowd of international installment loan startups, has a simple pitch: shop now, pay later. With some credit on top, maybe.
To help ecommerce customers have flexible spending, and aid ecommerce merchants with faster checkout, FinAccel has raised a $90 million Series C round. The round was led by Asia Growth Fund and Square Peg, with participation from Singtel Innov8, TMI (Telkomsel Indonesia), Cathay Innovation, Kejora Intervest, Mirae Asset Securities, Reinventure, DST Partners and more.
The financial services startup now has around $200 million in mixed venture capital and debt funding to date, per Crunchbase. Bloomberg reports that FinAccel is now worth $500 million. It plans to use this new cash to expand in Indonesia and the region, as well as launch new services.
Now that we have an idea of FinAccel’s funding situation,let’s get into its main product, Kredivo.
How It Works
If a customer is shopping on an ecommerce website that has integrated with Kredivo, they can choose a payment plan upon check out. Per TechCrunch, Kredivo allows customers to take credit between $100 and $2,200. If a customer pays back that total within a month, there’s no fee. If it takes longer than a month, then the service has a variety of different interest rates and payment schedules.
The upstart claims that it can get customers lower financing rates than consumer finance companies. The startup says in return merchants benefit from instant point-of-sale financing, high settlement rates, and a seamless checkout experience.
But both in and out of the region, Kredivo is not alone in the credit loan space. In terms of competition in the check out cart, I’d point to San Francisco-based Affirm. The purchase financing company startup, founded in 2012, has raised $1 billion in known funding to date, according to Crunchbase. It integrates with check out across various merchants like Peloton, Casper, and Adidas. It can charge an interest rate atop a monthly payback plan.
A Gaggle Of Competitors
Take Julo, that raised $15 million in September. The Jakarta-based startup provides loans of about $300 to families and small businesses. There’s also KoinWorks, which focuses on lending to small businesses, and raised $12 million in June. In South Asia more broadly, PayTM, which recently raised $1 billion, is offering digital loans to customers (more on this topic, here).
Why the focus? In a press release announcing the round, FinAccel pointed to the Indonesian government’s goal to increase access to financial services for the country’s growing middle class. User-wise, there is definitely a demand. In three years, FinAccel has doled out over 30 million loans to customers. With this new funding under its belt, it wants to service 10 million users total in the near future.
Illustration: Li-Anne Dias