Modalku Buys Back ESOP Worth 229 Billion Rupiah

The Modalku Group (known as Funding Societies in Singapore, Malaysia, and Thailand) announced the buyback of the Employee Stock Option Plan (ESOP) for $16 million or equivalent to 229.3 billion Rupiah.

This corporate action follows a series C+ funding round worth $294 million or 4.21 trillion Rupiah that was obtained last February. This announcement also marks the fourth time that Modalku has published an ESOP policy for employees and former employees of the company.

In his official statement, Co-founder of Funding Societies & CEO of Modalku Indonesia, Reynold Wijaya, revealed that HR is the main key for the company.

His party wants to give appreciation to the team who are dedicated and make a positive contribution in realizing the company’s vision, namely empowering MSMEs in Indonesia and Southeast Asia.

Prior to the C+ series round, the Modaku Group recorded the lowest rate of layoffs as well as the highest level of happiness/satisfaction since the company was founded.

“Despite the impact of Covid-19, we have taken concrete steps to appreciate our team through various initiatives including internal communication, employee learning and development, and ESOP,” he said.

Policies to Create Inclusiveness and Equality

For information, the ESOP policy is designed to create inclusiveness and equality within the company. This policy applies to eligible employees and former employees.

For Modalku employees who meet the requirements, they will get an ESOP every 2 years of service at the company. Modalku also offers 50% of the total annual salary in ESOP distribution for new qualified employees.

Employees and former employees are entitled to sell their shares at no discount on the price of the C+ series shares to incoming investors compared to a 20% discount in the industry at large.

However, they can also choose to retain or convert private ESOPs into shares so that they can become effective shareholders. Based on company data, employees and former employees have cashed in on ESOP shares worth $3.5 million or equivalent to IDR 50.1 billion.

There are more than 120 employees and former employees who have received cash prizes from this share buyback since the establishment of the Modalku Group.

“Our next target is to increase the comfort of the working environment for employees who are also parents. Some of the steps we have taken are providing better family benefits and opening up opportunities for part-time positions with more flexible working hours,” he said.

C+ Series Funding

As previously reported, Modalku Group secured a series C+ funding of $144 million (approximately 2.06 trillion Rupiah) led by Softbank Vision Fund 2, with participation from VNG Corporation, Rapyd Ventures, EDBI, Indies Capital, Ascend Vietnam Ventures, and previous investors; BRI Ventures and Sequoia Capital India.

In addition, the company also obtained a new loan facility of $150 million (approximately 2.15 trillion) from financial institutions in Europe, the United States, and Asia.

Of the latest funding, as much as $16 million or around IDR229 billion will be used to fund the share buyback (ESOP). In addition, this funding will also be used to strengthen its position as a digital finance leader on a regional scale.

His party will manage expenses and improve B2B Payments services for MSMEs in Southeast Asia in order to become a neobank.

For information, the Modalku Group, Funding Societies, is a funding platform for MSMEs in Southeast Asia that has licenses in Singapore, Indonesia, Thailand, Malaysia, and currently also operates in Vietnam.

In Indonesia, Modalku offers loans of up to IDR 2 billion for MSMEs who have difficulty with business capital. Based on the latest data, the Modalku Group has disbursed $2 billion in MSME loans and funded more than 4.9 million transactions in Southeast Asia in 6 years.