Jakarta-based SME financial platform KoinWorks scoops up $108M Series C


More than 60 million SMEs are the backbone of Indonesia’s economic system. Many lack working capital and have managed their finances manually, such as through spreadsheets, since before the pandemic. Many startups have raised large rounds of funding to expand quickly, with COVID-19 prompting them to digitize. KoinWorks has the latest. Today, the Indonesia-based financial platform that supports SMEs announced it had raised $108 million through Series C funding from MDI Ventures. This round consisted of $43 million in equity and $65 million in debt capital to fund the working capital loans KoinWorks offers its customers.

This round brings KoinWorks’ total investment to $180 million. Quona Capital and Triodos Investment Management were among the existing investors who returned to KoinWorks for this latest round. Saison Capital, ACV, East Ventures, ACV, ACV, and Triodos Investment Management were also present. These funds will be used to hire approximately 400 employees and scale KoinWorks’ newest suite of products, SME Neobank.

KoinWorks has its headquarters in Jakarta and holds tech offices in Yogyakarta and India. KoinWorks was initially created to assist small and medium-sized enterprises (SMEs) who are often turned down by traditional financial institutions. It has developed a wide range of financial tools that can be used to assist its customers, such as e-commerce sellers and social commerce vendors, in order to increase their sales.

TechCrunch was the first to profile KoinWorks in 2019, after it raised $12 million to fund its lending platform. The startup claims that its customer base has tripled to 1.5 million customers, and there is a waiting list of 100,000 small businesses that are being added to its financial software. TechCrunch was informed by Willy Arifin, co-founder and executive chair, that monthly loan disbursements have tripled to almost $50 million since 2019 and that revenue has quadrupled.

KoinWorks focuses its attention on small and medium-sized enterprises (SMEs) that are not served by traditional financial institutions. They may not have a credit card or a bank account. The platform allows users to create an online account and card, lend working capital, and access point of sale, early-wage, and human resource management systems that are tailored for small businesses.

Arifin stated that KoinWorks’ monthly disbursement rates have reached $50 million per month. This has allowed the company to grow enough that it is cash flow positive and its non-performing loans (NPLs) percentage is less than 2%. According to Arifin, banks that serve traditional SMEs have at most double KoinWorks NPL. He said that as many as 20% of businesses switched to online sales during the pandemic. 89% of businesses use online channels to market their products and services.

In the past three years, Indonesian fintechs that focus on SMEs have expanded to include other neobanks as well as startups that began as accounting software and are now offering working capital loans. BukuWarung, BukuKas, and Neobank Aspire are two notable examples.

“When we began, we were one of hundreds of traditional financial institutions. Arifin stated that these banks are now digitized. Despite this, Indonesia’s annual funding gap of $80 billion USD is still a significant problem. Those who are unbanked or underbanked in Indonesia are still at a disadvantage. There is still much to be done.

He said that Indonesia has tens of millions of entrepreneurs and it is not a winner-takes-all market. The five largest banks have a combined market worth of nearly $160 billion USD. Fintech companies will continue to exist in the unbanked and underbanked sectors. However, KoinWorks offers a best-in-class approach that caters to entrepreneurs and SMEs.

Donald Wiharia, MDI Ventures CEO, stated that “investing in KoinWorks means investing in financial literacy in underbanked or underserved communities.” We are thrilled to work with a team that understands the importance and necessity of each step on the path of entrepreneurship and SME growth.

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