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Experian makes its first major bet on Southeast Asia and its population of over 650 million consumers after the financial credit giant has backed Singapore-based C88 Financial Technologies, which operates financial markets that help lenders reach new audiences. announced a $ 28 million C investment round led by Experian with the participation of numerous other funders including the European duo ResponsAbility Investments (Switzerland), DEG in Germany, InterVest in Korea, FagoHe Fund Management, Pelago Capital and Fuchsia Venture Capital, the VC arm of Thai lender Muang Thai Life Assurance
The early investors Monk's Hill Ventures, Telstra Ventures, Kickstart Ventures and Kejora Ventures also took part in the round, which carries C88 to just over $ 45 million.
The startup was founded in 2013 and operates services in Indonesia and the Philippines – CekAja.com and eCompareMo.com, in particular – that have collectively served more than 50 million customers through a mix of smaller loans reimbursed over 6-18 months and longer plans based on maturities ranging from 18 to 32 months.
Following this investment, he also plans business in Thailand – Muang Thai's support is sure to help – as part of his mission to open South Asia's consumer finance products. -East. More generally, the capital will go towards expansion, especially around consumer marketing
Working with banks, without disrupting them
Unlike parts of the world, Fintech challengers in Southeast Asia are working with existing financial institutions. reach segments of the population that are not addressed today. Data is a huge part of that. In most parts of the region – to the exclusion of Singapore and perhaps Malaysia – few consumers are profiled. This makes the work of a bank or lender to assess their ability to loan extremely difficult. Indeed, they often look for small and medium sized loans, and the potential value of the client is likely lower than the resources that would be spent to value them.
The system is broken, but the good news is that the advent of smartphones puts forward exploitable data. Southeast Asia has more than 300 million Internet users and its growth rate is high.
Last month, Kredivo (which operates digital credit in Indonesia) and Aspire Capital (SME) raised capital
Instead of disrupting things, these companies and the C88 are directing the banking sector towards customers in long tail, hitherto elusive, by actively checking them and checking not only whether they are eligible for financial products, kind and at what pace. Indeed, very often, it's not that a person is a so-called "bad actor", but rather that there is not enough data to prove that ## 147 ## 39, she is eligible for the credit.
"Many times [banks and lenders]" I just can not lend money effectively, "CEO JP Ellis told TechCrunch in an interview. "But that may change with the advent of digital companies, data and price mechanisms on an individual basis.It's partnership with [financial institutions] because they have so much capital on their balance sheet. "
C88 claims to work with more than 90 banks, financial institutions and lenders. It actually acts as the data pipeline, sorting out potential credit applicants to assess their level of eligibility and the types of products that suit them best. This involves a mix of data, some structured unstructured, and working with established companies like Experian, but this remains a challenge given the lack of credit rating mentioned above. Indeed, Ellis' estimates reach as little as 20 to 30% of the population in Indonesia, which is a big problem since it is the fourth largest country in the world with a population of more than 260 million.
With about 10% of candidates having successfully obtained credit products using traditional methods, Ellis said he wanted to expand access to capital, which he said , could contribute to the growth of already growing economies of Southeast Asia. Cekaja.com is the portal of C88 in Indonesia
New methods of notation
What strikes on an agreement that is perceptible across Southeast Asia: unlike in other areas where credit and financial products seem rigid and almost hostile to consumers, the Southeast Asian industry strives to be closer to consumers. At least in terms of rhetoric, which includes smaller loans, flexible payment schedules and new types of credit ratings.
Ellis says that some of the methodologies come from China – where the Internet titans Alibaba and Tencent offer financial services based on factors. like mobile payments and utility billing history – but he said that the fintech movement of the region in Southeast Asia is following its own pace.
In Indonesia, for example, CBS offers a product with DBS, the largest bank in the region. and some of the eligibility data is tied to operator Telkomsel, which has more than 190 million customers.
C88 also offers in some cases its own policies, such as insurance against dengue in the Philippines. This is in partnership with an insurer on the backend. Ellis stated that the company only offers new products when it sees an unmet need in the market, it does not intend to compete with what is already offered by the company. Industry, which remains its key partner. The CEO of C88 concedes that this market is smaller – in terms of absolute numbers, at least.
Experian looks at the affairs of Asia
The case marks the first major investment in Southeast Asia for Experian, the company headquartered in Dublin, valued at around 17.5 billion $ 23 billion is listed in London. This points to a new role that will help develop start-ups in Asia, as was the case just a year after Antwerpian backed Bankbazaar with its first investment in India
"Five or six years ago , we began to think about "Ben Elliott, who is managing director of the Asia Pacific Experian business, told TechCrunch in an interview. "We are looking at organizations that we believe are disruptive in the market where we have a role to play, or those that are developing."
Elliott, based in Singapore, pointed out that near 39 A Southeast Asian Asians have access to a bank account, so new methods of access are essential. He said that the C88 case is not necessarily a route of acquisition for Experian. Although he has not ruled out the possibility in the future, he said that "the initial goal is to be a valuable investor and a good partner in the world. company. "
Ellis, the CEO of C88, believes that it is possible to work very closely with the new investor beyond the new credit scoring systems that they prepare together.
"Many of our financial institutions are already using Experian products, so we have the opportunity to really combine our strengths," he said.
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