KoinWorks raises $108m in series C, plans to empower local SMEs

KoinWorks, an Indonesian financial technology (fintech) start-up, has announced that it had raised US$108 million (Rp 1.6 trillion) in a series C funding round led by MDI Ventures, the venture capital arm of Telkom Indonesia.

The series C round also saw the participation of the start-up’s previous investors, namely Quona Capital, Triodos Investment Management, Saison Capital, ACV and East Ventures.

KoinWorks said that it planned to use the new funds, comprising $43 million in equity and $65 million in debt capital, to develop its financial solutions and hire 400 new employees to the global team to meet current needs.

The 10th largest economy in the world by purchasing power parity, Indonesia has more than 62 million small and medium enterprises (SMEs) that form the backbone of its economy. But like many emerging markets, poor financial access and literacy has hindered the digitalization and growth of SMEs.

The country’s gross merchandise value (GMV) reached $70 billion this year, with that figure expected to more than double by 2025.

However, “We understand the dynamics of online financial services and the huge space that the future of the fintech industry has in today’s digital landscape. KoinWorks will continue to empower SMEs with an appetite for digital financial products with a large product ecosystem that supports business growth and financial literacy to scale up their businesses,” said KoinWorks’ Chairman and Co-Founder, Willy Arifin.

“SME empowerment has been our vision since our inception, and KoinWorks is here to democratize financial access and dispel the myth that financial access is only for a certain class of entrepreneurs,” said Benedicto Haryono, KoinWorks’ CEO and Co-Founder.

“KoinWorks has proven that opening the door to access capital and providing educational tools help SMEs increase sales. In addition, if SMEs can take full advantage of all KoinWorks financial solutions, the growth potential of SMEs could be limitless,” he added.

As the country’s leading financial platform, KoinWorks focuses on underserved and underbanked customers. The company assists SMEs and freelancers in starting and growing their businesses by offering a variety of products to access loans and increase productivity, including incorporated SME neobank services such as the NEO Account and NEO Card.

The platform has an integrated marketplace for SMEs that combines account management software, a point of sale (POS) system, an e-commerce human resource management system (HRMS) and a budgeting application, as well as other KoinWorks products.

KoinWorks products and services are designed to help SME business owners achieve self-sufficiency by making financial services accessible and affordable. Some of its services include providing working capital, factoring, early wage access (EWA) and fund management.

“Investing in KoinWorks is the same as investing in the financial literacy of underbanked and underserved people. We are proud to join a team that understands the importance of each step in the entrepreneurial journey and growth of SMEs,” said MDI Ventures’ CEO Donald Wihardja.

“We are very pleased to be able to support KoinWorks in expanding financial access for more SMEs in Indonesia. Cooperating with SOEs for KoinWorks NEO will also further strengthen financial solutions for SMEs,” said Willson Cuaca, Co-Founder and Managing Partner at East Ventures.

“This effort is in line with the target of the President of Indonesia, Joko Widodo, conveyed at the 12th Kompas100 CEO Forum, which is to strengthen the nation’s digital economy in two years through digital inclusion and collaboration. We look forward to more innovations from KoinWorks,” said Willson.

The start-up’s platform has already garnered positive reviews from users. “KoinWorks helped me to raise additional funds, build a business and fight through the pandemic without the heavy burdens many entrepreneurs face when growing a business. With its simple application and approval process, [KoinWorks] is the financial service I have been waiting and needing for a long time,” said Dedy Liem, owner of Jaxine Sprei & Bedcover, who has been using the platform since 2016.

The pandemic has increased the number of downloads of the KoinWorks application as more users sought digital financial solutions to keep their businesses running and funds flowing. As a result, KoinWorks was able to grow its user base to 1.5 million users across the nation in one year.

Its newest product has also brought 100,000 SMEs to a waiting list that has been active since April 2021, while the series C funds is its latest success that marks a good start to 2022.