What is Modalku? Modalku Review, Features

Modalku is a P2P online lending platform that focuses on financing small and medium-sized enterprises (SMEs) and connects SME owners with individual investors.

About Modalku

Modalku was founded in 2015, and its parent company is Singapore-based FundingSocieties. The Modalku platform was launched in Indonesia on January 13, 2016, and the FundingSocieties platform was launched in Malaysia in February 2017, and then in Singapore.

Modalku has been registered with OJK (Indonesian Financial Services Authority) and obtained a Fintech license with registration number OJK Nomor S-2493/NB.111/2017. It is a startup company that has received Series A financing (invested by Sequoia Capital and Alpha JWC) and has won honors such as the Global Fintech 250 (Global Best Technology Innovation Breakthrough Award), CB Insights Award, and Indonesia's Warta Ekonomi Digital Innovation Award.

Founding Team

1. Co-founder: REYNOLD WIJAYA, who holds an MBA from Harvard Business School and a Master of Science from the University of Michigan, worked as an executive in a well-known Indonesian company before founding Modalku, responsible for operations and team management. He is also the co-founder of "Let's Go to School", a non-profit organization that provides scholarships to poor children in Jakarta.

2. Co-founder: KELVIN TEO, born in Malaysia, KELVIN moved to Singapore at the age of 15 through a scholarship program. He graduated from the National University of Singapore and Harvard Business School. He worked as a management consultant at Accenture and McKinsey, developing management strategies for Southeast Asian banks, telecommunications and other large companies.

3. Co-founder: IWAN KURNIAWAN, graduated from Cornell University with a degree in Applied Economics and Management Science. He worked as a management consultant for Oliver Wyman in Singapore, developing growth strategies and operational risk management models for banks and financial institutions in Asia. He then worked as a strategic consultant for Indonesian companies and government agencies at a well-known consulting firm.

Business Model

Modalku is a P2P platform focusing on financing of small and medium-sized enterprises (SMEs). The asset side is SMEs. According to data, 45% of Indonesian SMEs need financing but cannot obtain loans from traditional financial institutions, while only 8% of SMEs have loans but face financing constraints. The main financing channels for Indonesian SMEs are bank loans, credit cards, loans from family or other partners, and P2P. In addition, for startups in better industries, venture capital is also one of the financing channels. Since Indonesian SMEs have a large financing demand but few financing channels, this may be one of the reasons why Modalku is positioned as a loan for SMEs.

There are three types of funding: individual investors, enterprises and institutions. Individual investors must register with Modalku and deposit at least 10 million rupiah. The minimum amount invested in each project is 10 million rupiah.

Platform Features

1. Unsecured loans for small and medium-sized enterprises. Unlike traditional financial institutions (such as banks) and other financial institutions, Modalku uses P2P lending and does not require asset collateral or collateral.

2. Fast borrowing. Thanks to financial technology, Modalku can complete the approval process in a short time, which only takes about 4 working days. If all terms and conditions are met, the loan can be obtained within 6 working days after approval. Compared with traditional financial institutions, Modalku is very efficient.

3. Safe and fast mechanism. Modalku regularly improves efficiency and focuses on financial transaction security and customer information security for the safety and convenience of P2P lending.

Development History

-As early as 2012, Modalku had provided loans of Rs 3.34 trillion, 70% of which were mainly provided to millennials.

-In April 2018, Funding Societies (Modalku) received US$25 million in Series B funding, led by Softbank Ventures Korea, with participation from existing investors Sequoia Capital, Golden Gate Ventures and Alpha JWC Ventures, as well as Qualgro and Line Ventures.

-In 2018, Indonesian e-commerce unicorn Tokopedia deepened its cooperation with Indonesian P2P lender Modalku to facilitate loans for its merchants, offering a feature called Modal Toko. Modal Toko was launched in April 2019 and has just been licensed by the Indonesian Financial Services Authority (OJK).