How Cermati’s valuation grew almost 10x in under 4 years

Tech giants like Sea Group and Grab get the spotlight for their aggressive fintech plays. However, a seemingly low-key startup in Indonesia has been silently – but quickly – growing behind the scenes.

Cermati, which began as a fintech aggregator in 2015, is now an all-around financial group with consumer lending and insurance services as well as a banking-as-a-service (BaaS) venture.

Its valuation jumped almost 10x to over US$344 million between Q4 2018 and Q2 2022, when it raised US$17 million in a series D round, according to VentureCap Insights. Telkom Indonesia-backed MDI Ventures, its existing investor, reportedly led the latest funding.

Photo credit: Mega Insurance

Cermati has not confirmed the numbers, but the company tells Tech in Asia that it has indeed expanded “significantly” beyond the aggregator business since 2018.

So how did its valuation grow so much and so quickly?

An uncommon model

Today, Cermati operates under a holding company called Cermati Fintech Group (CFG), which uses an “as-a-service” model. This means it offers fintech solutions to other businesses through embedded finance offerings across banking, pay-later, and insurance.

This allows non-financial companies to offer various financial services on their platforms so that users don’t have to switch to a different app or site to buy a financial product.

In 2022, Cermati recorded a growth of nearly 2x year on year in the book value of its as-a-service model. This could be the reason for investor optimism.

Through the model, Cermati can “introduce more financial services to underserved Indonesians and accelerate financial inclusion in Indonesia,” says Andhy Koesnandar, co-founder and CEO of CFG.

See also: How BRI went from late adopter to frontrunner in Indonesia’s tech scene

Koesnandar says Cermati’s embedded finance offerings allow it to offer wider use cases for financial products that are tailored to users’ needs.

For example, when consumers check out products purchased from its ecommerce partner Blibli, Cermati can offer them its pay-later option, powered by Indodana, bundled with Cermati Protect for product insurance.

It’s not common for fintech aggregators to launch an as-a-service model in Indonesia, according to Aldi Adrian Hartanto, partner at Arise, an early-stage VC fund that works with MDI Ventures.

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