Unicorn Startup Akulaku Continues to Expand Financial Business Coverage

Akulaku announced funding of $10 million or equivalent to 143 billion Rupiah from Lend East. The investment in the form of debt funding will be used by Akulaku to increase its loan portfolio in their main markets, namely Indonesia, the Philippines and Thailand.

Lend East is a digital lending platform that connects global institutional capital with alternative lenders in Southeast Asia and India. Lend East is revolutionizing alternative lending by offering a range of non-dilutive structured debt solutions for technology companies.

As is known, since its founding in 2014 the Akulaku application itself has offered paylater and cashloan products for its consumers. Previously, Akulaku had just received equity funding of $100 million or more than Rp1.4 trillion from Siam Commercial Bank (SCB).

This acquisition continues the previous year’s $125 million investment round led by the Silverhorn Group, which has also been a financing partner since 2018.

In total, Akulaku’s current valuation has crossed $1 billion and has made it the next unicorn startup. Akulaku CEO William Li admitted that the funding from Lend East will be used to increase the loan portfolio.

“Since last year Akulaku has continued to grow and this additional funding will allow us to continue to meet the needs of the underbanked across Southeast Asia,” said Akulaku CEO William Li.

“The COVID-19 pandemic has shown us how important digital banking and finance platforms are for consumers. We see that there is great potential in Akulaku to be able to cope with this growing demand,” he added.

In Indonesia, Akulaku offers two features, namely “buy now, pay later” (Buy Now, Pay Later / BNPL) and consumer credit. In addition to BNPL services, Akulaku combines wealth management, e-commerce, and digital banking platforms.

Continue To Diversify Your Financial Business

By 2021, Akulaku had disbursed more than $2.2 billion in credit to more than 10 million users. In addition to paylater services, Akulaku combines wealth management, e-commerce, and digital banking platforms so that it can increase the company’s total revenue by 120% to $598 million.

For digital banking services, Akulaku chose to acquire 24.98% shares of Bank Neo Commerce (the majority). A number of plans have also been intensified from this collaboration, one of which is through the loan origination system, namely a system for processing credit approvals, particularly for direct loans/online financing.

In addition, Akulaku has also developed a series of technologies to improve banking capabilities in entering the digital era, some of the products offered include e-KYC, verification systems, to QR payment services.

As for loan services, they rely on the fintech lendingAsetku platform. To date, the total loans that have been rolled out have reached 42 trillion Rupiah with a total borrower of 13 thousand customers.

And on the wealth management platform, they developed OneAset, a financial application that users can use to manage their financial assets, including investing in mutual funds, securities, and gold.

Market Competition

In Indonesia, all Akulaku business lines must compete with other players. For example, for paylaters, currently there are Kredivo, Atome, and GopayLater who are the challengers.

Each also has great support from its parent – ​​including for the potential to dominate the Southeast Asian market, such as FinAccel, Advance Intelligence Group, and GoTo. Meanwhile, even in digital banks, competition continues to be enlivened by product innovation from players in the ecosystem.

There are dozens of digital banks that are already on the air and ready to debut. And for wealth management, dozens of similar applications have also been peddled for retail investors in Indonesia.

Apart from the diversification of financial products that are trying to be presented, players like Akulaku actually have a strategic advantage that can be explored, namely connectivity in their digital ecosystem.

In fact, many other players synergize with third parties to provide certain capabilities – for example Bank Jago with Bibit/Stockbit for investment features – which Neo Commerce and OneAset can also do; or applied to other business model scenarios.