Indonesian fintech firm with a million users sets sights on Southeast Asia

While working with Southeast Asian ecommerce companies at an adtech company he co-founded, Akshay Garg discovered the problem of “cart abandonment,” which refers to how online shoppers add products to their shopping cart but eventually don’t complete the transaction.

“Cart abandonment in a market like Indonesia is as high as 80 percent,” said Garg. “People are on their mobile phones, and [they think] doing this payment right now is a pain in the ass, so they plan to do it later. But then they just don’t do it.”

There were two problems behind this: a lack of credit access – a whopping 96 percent of Indonesians don’t own credit cards, according to a KPMG report – and the high friction of credit card payments, especially for users who are accustomed to cash.

(L-R) FinAccel founders Umang Rustagi, Akshay Garg, and Alie Tan. Photo credit: FinAccel

Garg and his co-founders found that both of these problems can be solved with a single unique solution: a combination of instant credit approval and a two-click checkout process.

Thus, Kredivo was born. Its parent company, FinAccel, raised seed funding in June 2016 from the likes of Jungle Ventures and 500 Startups. Most recently, the company bagged US$30 million in a series B funding round led by Australia’s Square Peg Capital.

How Kredivo works

At its core, Kredivo is a digital credit card that allows Indonesian shoppers to buy now and pay later. The basic account allows users to repay online purchases of up to IDR 3.5 million (US$250) within 30 days at zero interest.

Unlike the usual credit card applications, those signing up for Kredivo only need to submit requirements: a photo their government-issued identity card, an ecommerce account with transaction history, and their Facebook account (for verification purposes).

Once people join via the iOS or Android app, Kredivo assesses their creditworthiness through a variety of digital data points, such as mobile app permissions, ecommerce, and social media accounts, and even websites they’ve visited.

The data is used to uncover three things: users’ real identity, their credit score, and an estimate of their income. Afterwards, the data gets stored, cleansed, and processed in real time.

Approval can happen immediately, after which users can start shopping at one of Kredivo’s 200+ merchant partners, which include ecommerce giants Shopee, Lazada, Tokopedia, and Bukalapak.

Kredivo lets users buy now and pay later.

In 2018, the company also branched out into offline transactions – with point-of-sale systems where users can pay with their Kredivo app, currently in beta – and personal loans.

“The number one request that we have received from customers in the past year is personal loans,” says Garg. “The thinking there was fulfilling a really big consumer need, and doing it with incredible user experience.”

Looking ahead