In the last couple of weeks, two leading fintech companies focused on Indonesia have confirmed large rounds of fundraising:
Fazz, a merger of PayFazz and Singapore’based Xfers, in September announced a US$100m series C; while FinAccel, which operates consumer lending (BNPL) platform Kredivo, is reported to have raised US$140m series D to become a unicorn.
Interestingly, the two funding events have one thing in common. Let’s take a look at their investors:
- Fazz’s series C investors include: Tiger Global, DST Investment, B Global, Insignia Ventures Partners, and ACE & Company.
- FinAccel’s series D investors include: Mirae Asset, Square Peg, GMO Global Payment Fund, Jungle Ventures, Openspace Ventures, Cathay Innovation, and Endeavor Catalyst.
If we go back in time to look at the previous round of each company:
- Investors of Fazz’s US$53m series B in 2020 include: B Capital Group, Insignia Ventures Partners, Tiger Global, Y Combinator, DST Global ACE & Company, and Quiet Capital;
- Investors of FinAccel’s Dec 2019 series C include: Asia Growth Fund (Mirae Asset and Naver JV), Square Peg, Singtel Innov8, TMI (Telkomsel Indonesia), Cathay Innovation, Kejora-InterVest, Mirae Asset Securities, Reinventure and DST Partners.
Yes, existing shareholders backed the two latest rounds, with no notable new names on the cap table.
Is that a good or bad thing?
The situation is – we all know that consumption power in Indonesia is impacted by the global macro factors: rising US dollar, inflation and in particular fuel prices.
Every fintech lending company we know is telling us about rising cost of capital and also increasing non-performing loan ratio. This is a sector wide challenge which might last for a year or two at least.
Serious investors, in this situation, would be rational choose to double down on their existing portfolio who are more likely to emerge as winners after the period of uncertainties is over.
We almost saw this coming in the beginning of 2020, when the pandemic first hit. Back then a number of large investors also chose to double down on some of their portfolios (for example: Sequoia India on Kopi Kenangan and Beam).
Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected]