Small business loans are a huge market that has received a lot of attention from VC investors in recent years. Startups like Kabbage have raised over a billion dollars in venture capital and debt to create credit platforms for businesses, and other businesses like Fundbox for Lending and BlueVine for Banking are trying to develop new, digital models to help SME owners grow their businesses.
While startups focused on the U.S. and European markets have increased, other international markets have received less attention. Portal Finance raised $ 200 million to help companies lend in Latin America, and First Circle raised $ 26 million to do the same in the Philippines.
Now Jenfi wants to get involved. The company founded by Jeffrey Liu, which has sold its previous startup GuavaPass to ClassPass for several million, and Justin Louie, one of the first employees at GuavaPass, want to expand access to small and medium-sized business loans for owners in Southeast Asia, starting with their first operational one Base in Singapore.
“Even in a market like Singapore, which is fairly well established, half of these companies are still under-banked. [and] You have no access to credit, ”Liu told me in an interview. "We found that there is a big problem there."
The company has completed a $ 1 million round of debt and equity financing and is currently undergoing YC's accelerator program. So far, the startup has lent 50 borrowers on its platform and 600,000 SGD since it started last year.
With regard to its product, the company either lends directly to a small company or offers a virtual Jenfi MasterCard that can be used for purchases.
However, the Jenfi model is currently more interesting, which you don't always see in the rental area. The company approaches lending to SMEs solely from growth perspectives. The startup wants to help owners invest in the growth of their company, primarily through digital marketing, and earn a small percentage of future sales instead of a fixed repayment plan.
Liu says that "part of the value added is that we can help them become more effective in their alternative marketing channels …" He said that the startup does not want to become a service provider, but has built partnerships with other marketing agencies and services, that can help owners find the right growth strategies for them and then implement them, financed by Jenfi Capital. "Our goal is to build a network," says Liu. "Marketing growth is our first product focus for this company."
The time could be favorable. A study by Google and Bain late last year saw Southeast Asia as a massive opportunity for digital services with deep smartphone penetration but still a relatively limited range of digital services in a number of categories. Online marketing channels exist but are under-optimized, especially when compared to the large amounts spent in countries like the United States.
Over the next two years, Liu and Louie hope to expand to additional regions, expand their product offering, and continuously build long-term partnerships with business owners.