CJF's injection kicks off Funding Societies' 10th year track record in serving SMEs in Southeast Asia

Investment bridges gap for Southeast Asia's SMEs supporting Japanese companies' overseas expansion

SINGAPORE,Dec. 19,2024 --Funding Societies | Modalku (Funding Societies),the largest unified SME (small and medium enterprises) digital finance platform in Southeast Asia,today announced that it has raised US$25 million in equity investment from Cool Japan Fund (CJF) – Japan's sovereign wealth fund. The investment from CJF signifies the fund's first investment into a Fintech company in Southeast Asia.

Funding Societies will funnel the investment to deepen its core business in SME financing across its five markets; whilst further expanding its payments business since embarking on it in 2022.

Funding Societies will funnel the investment to deepen its core business inSME financing across its five markets (Singapore,Indonesia,Malaysia,Thailand and Vietnam); whilst further expanding its payments business since embarking on it in 2022.

Having served SMEs in fulfilling their business potential for a decade,the company will focus on helping businesses get paid faster through innovative receivables and financing solutions. It will also leverage technology and AI to digitise and automate lending origination processes. These initiatives and synergies between payments and lending,align with the company's objectives of achieving growth and profitability.

Annually,Japanese direct investment in the ASEAN region averaged about US$18.6 billion[1]. Furthermore,there are approximately 15,000 business establishments set up by Japanese companies in the region. In a 2024 survey conducted by the Japan Bank for International Cooperation[2],asking 500 Japanese companies their top 10 promising countries for overseas business development,ASEAN countries made up half the list.

Through this investment,Funding Societies will also embark on a partnership with CJF,leveraging the former's strong track record in serving SMEs in Southeast Asia,to provide financial services to support Japanese companies. The partnership will foster positive commercial relations for Japanese companies and local SMEs in the region,and help expand overseas demand for attractive products and services unique to Japanese lifestyle and culture by supporting the overseas business expansion of Japanese companies engaged in providing them.

President and CEO of Cool Japan Fund,Kenichi Kawasaki, said,"We are excited to be backing Funding Societies through this investment. Their track record of supporting SMEs in Southeast Asia well places them to help Japanese companies overcome challenges when entering new overseas markets – particularly in this region. With the shift of interest from Japanese firms steering towards Southeast Asia,we believe our partnership with Funding Societies through this investment will grow the overseas demand of Japanese products and services,in turn,benefitting Japan's economy as well as the local SMEs doing business with Japanese companies."

Co-founder and Group CEO of Funding Societies | Modalku,Kelvin Teo,said,"We're honored for the commitment from Cool Japan to collaborate and support Japanese companies expanding overseas. Many businesses we serve in Southeast Asia are Japanese firms,suppliers and/ or customers to them. Together with CJF,we intend to further strengthen these ties."

Revenue of digital financial services in Southeast Asia is projected to be on the ascent,with digital lending to be the biggest driver – contributing approximately 65% of the total revenue[3]. The total loanbook[4] has a year-on-year growth of over 20% to US$71 billion from 2023 to 2024 (only covering under 1% of the US$2.5 trillion credit access gap in the region[5]),and is expected to grow steadily to approximately US$200-300 billion by 2030.

This injection follows successful milestones in 2024 achieved by Funding Societies including: a strategic equity investment from Maybank; and a third annual credit facility from HSBC's ASEAN Growth Fund which is part of an accumulative commitment of over US$100 million credit facility with the bank.

To date,Funding Societies has achieved over US$4 billion in business financing serving about 100,000 SMEs,and processed an annualised payments gross transactions value (GTV) of over US$1.4 billion – since expanding into its payments business in 2022.

[1]Co-creating the future of the Indo-Pacific based on trust- ASEAN-Japan Commemorative Summit in 2023

[2]Top 10 Promising Countries- Japan Bank for International Cooperation

[3]e-Conomy SEA Report 2024- Google,Temasek and Bain & Company

[4] Total loanbook includes end-of-year balance for consumer loans (excluding credit card and mortgage) and SME loans

[5]MSME Finance Gap - SME Finance Forum

About Funding Societies | Modalku

Funding Societies | Modalku is the largest unified SME digital finance platform in Southeast Asia. It is licensed in Singapore,Thailand,registered in Malaysia,and operates in Vietnam. The FinTech company provides US$1 billion annually of business financing to small and medium-sized enterprises (SMEs). Since embarking on its strategic milestone to expand into payments,the company processes an annualised US$1.4 billion in gross transactions value,following the acquisition of regional digital payments platform CardUp in 2022.

Funding Societies | Modalku is backed by SoftBank Vision Fund 2,Maybank,Khazanah Nasional Berhad,CGC Digital (the digital arm of the Credit Guarantee Corporation Malaysia Berhad),SBVA (previously SoftBank Ventures Asia),Peak XV Partners (previously Sequoia Capital India),Alpha JWC Ventures,SMBC Bank,BRI Ventures,VNG Corporation,Rapyd Ventures,Endeavor,EBDI,SGInnovative,Qualgro,and Golden Gate Ventures among others.

It has received accolades through the years including: Brands for Good (2019,2023),Global SME Excellence Award,Global SME Finance Awards by IFC (2021-2023) Global Startup Awards (2020),MAS FinTech Award (2016,2021),Singapore's Fastest-Growing Companies 2024 (a list of 100 companies compiled by The Straits Times and Statista),High-Growth Companies in Asia-Pacific 2024 (a list of 500 companies compiled by the Financial Times and Statista) .

For more information,please visit: www.fundingsocieties.com