The Covid-19 period has actually allowed KoinWorks to move in the right direction.
“At the start of the pandemic, we tried to take a step back and examine the situation. But we realized that was actually a mistake because our market kept growing amid the outbreak,” company co-founder Willy Arifin told Tech in Asia.
The main types of businesses that borrow from KoinWords are small and medium-sized enterprises (SMEs) that have a digital footprint. Online stores on Tokopedia and Shopee are examples. These types of businesses have not been hit as hard by the restrictions caused by Covid.
Over the past 18 months, the number of SMEs with a digital footprint has doubled from around 10 million to 20 million businesses, according to Arifin. This kind of push normally takes five years if it weren’t for Covid. That being said, KoinWorks has kept its non-performing loan (NPL) ratio below 2%, which is significantly lower than that of traditional financial institutions.
During the pandemic, the company reached US$15 million in loan disbursements per month and recorded positive cash flow. The company also reached 1.5 million users at the end of last year.
The company raised US$108 million in a Series C funding round led by MDI Ventures. which is the venture capital arm of the Telkom group. Several existing investors such as Quona Capital, Saison Capital, AC Ventures and Triodos Investment Management also participated in the round.
The investment included $43 million in equity and $65 million in debt capital. Since inception, the company has raised $70 million in equity and approximately $110 million in debt.
The company plans to use the funding to expand its current workforce of 400 employees, hailing from Singapore, Indonesia, India and Vietnam. It also aims to triple its revenue and double the number of users by the end of 2022.
Founded in 2016 and based in Jakarta, KoinWorks has grown from a dedicated peer-to-peer lending platform to launching several new features to expand its user base. The company realized it wanted to help more budding founders early on in their entrepreneurial journey after having to reject many entrepreneurs seeking loans on its lending platform. Therefore, they have launched a neobank feature which allows users to open business bank accounts directly from its app. It also provided learning materials on how to run an online business, promote it, and communicate with customers.
When the business is comfortable with a business owner’s transaction history, they give them a KoinWorks Neo card which is a virtual Mastercard card that can be used to make any type of payment online. The SME can also borrow money through the KoinWorks lending platform.
They have also introduced an Earned Wage Access (EWA) service called KoinGaji and a gold investing feature called KoinGold.
From now on, the company has better go public. However, the founders noted that they still want to focus on the company’s home market and have no interest in expanding to other countries despite having developers outside Indonesia.
“Half of Southeast Asia’s GDP (gross domestic product) comes from Indonesia, we know where the money is,” Arifin said.