P2P lender launched at Harvard nets $25m in Softbank-led series B

Funding Societies co-founders Reynold Wijaya (L) and Kelvin Teo (R) / Photo credit: Funding Societies

There’s a story going around that Kelvin Teo and Reynold Wijaya quit their hard-won places at the vaunted Harvard Business School to launch Funding Societies, the Singaporean peer-to-peer (P2P) lending startup they co-founded in 2015.

“To be clear, we actually graduated! Although barely,” Teo – who also serves as Funding Societies’ CEO – told Tech in Asia, in a simultaneous correction and admission.

“We’d be slaughtered by our families if we dropped out. It may sound cool but studying at Harvard in the day, while working on Funding Societies at night to match the 12-hour time difference, was brutal. But we knew if we didn’t start in 2015, we’d miss the market.”

We had one-month runway left. We bet our remaining cash on expensive legal opinions.

The tribulations didn’t end there. “Many people know that Sequoia India gave us a term sheet upon our graduation in 2016, but few know that a sudden regulatory change on the week of our return [to Singapore] wiped out 90 percent of our business, before we closed our series A,” said Teo.

“We had one-month runway left. We bet our remaining cash on expensive legal opinions, sought an institutional loan, and restructured our marketplace business into a balance-sheet lending business to continue growth. Thankfully Sequoia stood behind us.”

Teo and Wijaya’s decision to abdicate sleep, risk their graduation, and push on despite the obliteration of their embryonic business appears to have been vindicated. Funding Societies announced today that it has raised US$25 million in a series B round led by Softbank Ventures Korea, in what it claims is the biggest funding round closed by a P2P lender in Southeast Asia to date.

The oversubscribed round also saw participation from existing investors Sequoia Capital, Golden Gate Ventures, and Alpha JWC Ventures, while Qualgro and Line Ventures – the VC arm of messaging app Line – came on board for the first time.

Being compliant is the number one priority… we’re in a trust-based and regulated industry.

Teo said that the funds will primarily be used for product development and to ensure regulatory compliance in the three territories where it operates – Singapore, Malaysia, and Indonesia, where it does business under the Modalku brand.

“To grow, we’ll continue to build expertise in our space, develop core capabilities, and expand our teams in our existing countries. While we’re exploring new markets, there is still a lot of work to be done in our current ones. Hence the decision of overseas expansion or diversification into other areas is never taken lightly,” he explained.

SME financing

Funding Societies – under its Indonesian brand name, Modalku – won the International Telecommunication Union’s Global SME Excellence Award in 2017. / Photo credit: Funding Societies

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