Skype co-founder raises $ 105 million for Fintech start-up in Southeast Asia

HONG KONG – Skype co-founder Geoffrey Prentice raised $ 105 million in the first major financing of his latest venture, a micro-credit company in Southeast Asia, which is stepping up the battle for the vast population of the country. region that does not have a bank account.

The Malaysian property developer Berjaya Group and the Indonesian conglomerate Sinar Mas Group have led the series of investment Series A in Oriente, founded by Prentice in Hong Kong in 2017. The startup is about to enter Vietnam and has recently expanded to the Philippines and Indonesia. Prentice declined to disclose the startup's assessment, but said she was growing faster than Skype in its infancy.

The microcredit business model has been around for decades, but Prentice believes that Oriente has one advantage: a sophisticated risk control algorithm that keeps the default rate around 1%. This compares to an average of 8% in the industry. According to Prentice, the difference allows Oriente to offer lower interest rates.

In addition to recruiting data scientists in China, where Prentice claims to have more advanced financial technology than elsewhere, the company has put the so-called credit for specific purposes at the center of its business. "Once we know why people are borrowing money, we better understand the risks," he said. To encourage users to reveal the purpose of their loan, the company offers lower interest rates for users who visit a partnership store and purchase items through staggered payments.

Oriente applies a monthly interest rate of about 3 to 4%, while Prentice said that some microcredit platforms in Southeast Asia charge more than 15%. Those who repay in several installments are entitled to a reduction of 25 to 50% on the interest rate.

Helping people and businesses to access better financial services is essential for the economies of Southeast Asia to continue to grow in a healthy way. The region is home to some of the fastest growing economies in the world. Although the Association of Southeast Asian Nations [ASEAN] had produced $ 2.8 billion in economic output last year, only 27% of the 650 million inhabitants of the region were officially banked in 2016, according to the global consulting and marketing company. KPMG audit.

This number has sufficient potential to attract international conglomerates. Earlier this year, Tencent Holdings, which operates the popular WeChat Pay in China, debuted as a ringgit-based digital payment service in Malaysia. Its rival, Alibaba Group Holding, based in Hangzhou, has earned a special place thanks to its investments in FinTech startups in Thailand and the Philippines.

Southeast Asia has its own fintech companies. Grab, champion of the region since its merger with Uber Technologies earlier this year, has started offering loans and insurance. The 6-year-old company is expanding its payment service in South East Asia and has announced the establishment of a money transfer service early next year.

But the region lacks a dominant player in the fintech, Prentice said. Oriente, created in 2017, offers microcredit to individuals and businesses via a mobile application. The startup is also offering off-line loans to buyers of retail partners.

The entrepreneur who built one of the world's first Internet-based voice and video calling systems is now betting on this experience to put Oriente at the forefront of the microfinance package in South-East Asia. Is.

The co-founders of Oriente include Hubert Tai, the main architect of the Chinese Internet financial platform Lufax. Until Beijing's restrictions on online lending disrupt its publication plan this year, Lufax would have been valued at $ 60 billion thanks to a possible float on Hong Kong.

"Today, Oriente's projects in the Philippines and Indonesia are growing at a faster pace than Skype or Lufax in the first six months of its launch," said Prentice.

In the Philippines, Oriente has partnered with the Philippine conglomerate JG Summit Holdings to launch the Cashalo application in May. The mobile application now has about 50,000 users per month. In August, Oriente joined Sinar Mas Group to roll out another customized microcredit application for Indonesians. He plans to expand his business in Vietnam next year.

Prentice said the $ 105 million would be used to fuel the company's expansion. Oriente, which employs 1,100 people in the region, "hires between 50 and 100 people a week," Prentice said.