Indonesian P2P lender Komunal bags seed money in East Ventures-led round

Indonesian peer-to-peer lending company Komunal secured an undisclosed amount of seed funding in a round led by East Ventures, with local VC firm Skystar Capital also participating.

From left: Komunal co-founders Rico Tedyono, Hendry Lieviant, and Kendrick Winoto / Photo credit: East Ventures

The new funds will help Komunal bridge the funding gap for the growing population of underbanked micro, small, and medium-sized enterprises (MSMEs), according to a statement.

Komunal, which has been operating for eight months now, drew up its idea when its founders realized the huge credit gap Indonesia experienced early last year, which was more apparent in areas outside of the Jakarta metropolitan area. However, the startup saw an opportunity in the country’s substantial and growing mobile phone user base.

Hendry Lieviant, co-founder of Komunal, said that MSMEs are the backbone of Indonesia’s economy, as they contribute over 60% of its GDP and 95% of employment. “Through Komunal, we are helping potential MSMEs to thrive and substantially improve Indonesia’s economy, as well as reduce inequality,” he added.

According to the statement, the startup has already channeled around 50 billion rupiah (about US$3.6 million) of loans to MSMEs located mostly around the East Java area. “This is only the beginning, and we are excited to expand our network to serve more cities in East Java, as well other provinces that are still relatively untouched next year,” said Komunal co-founder Kendrick Winoto.

The country’s fintech lending scene as a whole has seen rapid growth in the past three years. As of June, the Indonesian Financial Services Authority (OJK) recorded that loan transactions reached a total of about US$3.21 billion, up 97.7% from just December 2018.

Other players in the space include the nearly profitable KoinWorks, which recently secured US$1.4 million in additional funding from Saison Capital as part of its series B round.

Another is Amartha, which recently raised an undisclosed amount of series B funding in a round led by Line Ventures. According to Amartha CEO Andi Taufan Garuda Putra, the startup has lent US$113 million to over 343,000 users across 5,200 villages in Java and Sulawesi to date.

Currency converted from Indonesian rupiah to US dollar: US$1 = 14,095 rupiah