BrazilFormer McKinsey partner Heang Chhor invests in Malaysia lending startup
Malaysia-based lending platform Funding Societies recently underwent a $25 million financing round. Funding Societies, the largest P2P lending platform in Malaysia, attracted the investment of the Heang Chhor-headed venture capital fund Qualgro, among others.
The Asia-Pacific region is a growing hotbed for investment in fintech startups, with deal value growing from $100 million in 2010 to more than $9.6 billion in 2016. While investment is skewed toward powerhouses such as China, Hong Kong, and India, smaller regional players like Malaysia are nonetheless attracting the interest and financing of private equity funds.
One such promising fintech startup is the Malaysia-based crowd-lending platform Funding Societies. The fintech firm, which is the largest peer-to-peer (P2P) lending platform in Malaysia, recently raised $25 million in an over-subscribed Series B funding round. Softbank Ventures Korea invested the lion’s share of capital in the fundraising, while Sequoia India and Golden Gate Ventures also participated. Upstart venture capital fund Qualgro – founded by former McKinsey & Company partner Heang Chhor – was another investor in the startup.
Funding Societies attracted the interest of Qualgro and other investors because of its solid footing in the APAC financial services marketplace and its positive growth outlook. The firm – which connects small-to-medium enterprises (SMEs) in Malaysia, Singapore, and Indonesia with retail and institutional lenders – has already disbursed more than $102.7 million in financing. The platform, which has a network of more than 60,000 investors across Southeast Asia, also boasts a very low default rate of 1.5%.
The innovative startup has also pioneered a number of industry-leading digital initiatives: Funding Societies was the first P2P lending platform to implement e-signatures, while also developing auto investment algorithms and launching mobile apps for SMEs and investors.
The firm also has a huge opportunity for future growth, as the Malaysian Securities Commission revealed that there is a significant $20.5 billion gap in SME financing in the country. The innovative lending platform will hope to assuage some of the shortfall through its services. Funding Societies CEO Wong Kah Meng commented; “Through our local experience, we recognise that there are significant and practical challenges in serving SMEs and individuals, leaving them side-lined by traditional institutions.” The CEO added, “This funding round will help advance our mission to improve the livelihoods of SMEs and individuals through greater access to financing and investments here in Malaysia and across Southeast Asia.”
Commenting on Qualgro’s decision to invest in the fintech firm, Qualgro founder Heang Chhor said; “Funding Societies has built a market leading tech platform to provide Southeast Asian SMEs with fast and user-friendly access to credit, something that banks are not always able to provide. We’re delighted to support the team, who bring together deep credit expertise with a great user experience for lenders and SME borrowers.”
Qualgro, a young but promising VC fund, already has significant experience in alternative investment. The fund has already invested in other fintech startups like India’s No Broker, a disruptive real estate platform, and Open Agent, an Australian platform that connects real estate agents and sellers through data-driven insights and analytics.
Qualgro founder Heang Chhor was previously a Senior Partner at McKinsey, where he worked for 26 years. During his tenure, Chhor advised multinationals and Asian conglomerates in areas including operations, growth, M&A, and organisation. He has extensive experience and networks in the consumer, retail/e-commerce, banking/fintech, and technology sectors.
