Funding Societies’ Kelvin Teo on building a regional startup and how his Harvard MBA helped

This Q&A is edited from our AMA session with Kelvin Teo, co-founder and CEO of Funding Societies.

Could you share with us what it takes to build a regional startup? – Serene Choong

In all candor, it’s really tough, and we are still learning. If I may highlight two points:

Firstly, you’d need to be willing to invest a significant amount of resources and time. At least for a highly localized business like SME financing, you either go all-in or you don’t. Many startups enter a new market half-heartedly or when they’re not ready, which in our view is a recipe for disaster.

Secondly, it’s always about the people, hence by extension company culture. As the firm scales across countries, your culture starts diluting and you inadvertently have to rely on local teams that must be capable or you can trust to execute and uphold the culture.

Therefore, we only enter a new market when we’re ready, and we enter to win.

What were the factors that helped make the company successful in Indonesia? – Putra Muskita

We’ve been fortunate to achieve some success in Indonesia, as the leading SME digital financing platform.

Truth is, it takes numerous pieces of business models to come together to succeed, especially in a market like Indonesia. Product-market fit is one. But others include regulatory compliance/buy-in, talent attraction/retention, effective risk management, etc., all tailored to the local context. It’s not just getting one or two pieces right, but most pieces correct.

There have been close to a dozen debt-based crowdfunding platforms in Singapore. Is there room for equity and rewards-based crowdfunding platforms? Why have not any rewards-based crowdfunding platforms managed to break out yet? – Daniel Tan

I think there are too many debt-based crowdfunding platforms in Singapore—around 20+, based on our last count—for a 5.5 million population.

Rewards-based crowdfunding platforms fundamentally depend on folks who have good project/product ideas, as well as a public willing to give money for it. Unfortunately, there seems to be a lack of both in Singapore.

How did you build enough trust to have investors lend their money through Funding Societies when you first launched? – Nuning Septiana