Fintech Investree’s Strategies: Acquisition, Expansion and Targeting Stalls

PT Investree Radhika Jaya (Investree) carries out several strategies to strengthen competitiveness in the financial financing technology industry (fintech lending). Some of them acquired other startups, expanding to target the warung sector.

Co-founder and CEO Investree Adrian Gunadi said, the company did not only focus on providing loan services. He wants his company to build an ecosystem for Small and Medium Enterprises (SMEs).

“What is the form (business solutions in the form of) investment, joint ventures, we still see some of these ecosystems,” Adrian said in Jakarta, Wednesday (29/1). This time, Investree collaborated with payment gateway company Midtrans for 1.5 years.

“Our strategy going forward is to collaborate more with ecosystems that have been digitalized in terms of SMEs,” he said. Adrian rate, digitalization can determine the quality of credit from SMEs.

Through this partnership, this startup provides working capital loans. While Midtrans is an accelerator of the needs of SMEs for access to capital loans. He was reluctant to mention the target of lending through collaboration with Midtrans this year.

However, according to him, over the past 1.5 years, the company has distributed loans to 70 merchants worth Rp 75 billion.

Interest charged to SME borrowers ranges from 12-20% per year without collateral. “In terms of speed, this collaboration with Midtrans starts from filing, uploading documents to disbursing funds for a maximum of five days,” he said.

Even so, it does not target the entire MSME segment. Only focus on small and medium scale businesses. The reason is Adrian said, even though the number of SMEs is much less than micro businesses, the transaction volume and contribution to GDP (Gross Domestic Product) is still greater.

Investree Has Acquired Mbiz and Expand to Other Countries

Investree also acquired e-procurement startup stock, Mbiz. Through the corporate action, the company is targeting to channel Rp 270 billion in loans to MSMEs in the first quarter of 2020.

Earlier this year, fintech lending also expanded to the Philippines by partnering with the tycoon Filinvest Development Corporation (FDC). FDC develops banking, property, hotel, power generation and infrastructure business lines.

Investree co-founder and CEO Adrian Gunadi said that last Monday, Investree had signed a partnership with FDC. “We are working together where a joint venture of 50:50. The goal we want to bring Investree solutions or products to Manila,” said Adrian while at UnionSpace, Jakarta, Wednesday (01/29/2020).

“So the products are invoice financing and buyer financing because we see in the Philippines or Thailand that the working capital problem in SMEs is the same as in Indonesia,” Adrian said.

Because the problems faced in other countries are similar to those in Indonesia, Investree has not changed much of the products offered in the Philippines.

He explained, the loan product offered was the same as in Indonesia. Among other outsourcing vendors, packaging, interiors for hotels, and so on. Investree has also been operating in Vietnam under the name eLoan since 2018.

Stall Entrepreneurs are Also Targeted by Investree

Adrian said, Investree also opened options to target stall entrepreneurs. The company is studying a scheme for providing financing to the sector. “We still see the acquisition and collection costs in the warung sector, that is quite high,” Adrian said.

However, he was reluctant to specify how much it would cost to enter the sector. In Indonesia, the number of SMEs is only 10% of the total 65 million MSMEs. About 90% are micro businesses like food stalls.

“So, in fact, the volume of trade (MSMEs) is still greater than in the SME segment. But we are still focused on SMEs, especially on suppliers and vendors that are still largely untapped,” Adrian said.

For information, Investree posted a total loan facility of IDR 4.44 trillion and a loan value of IDR 3.44 trillion. The average return of 16.1%.