Indonesian fintech firm Komunal raises US$8.5m led by East Ventures

INDONESIAN fintech company Komunal announced on Tuesday (Jan 17) that it has raised US$8.5 million in its latest funding round led by venture capital firm East Ventures, with participation from AlphaTrio Sustainable Technology Fund, Skystar Capital, Gobi Partners, and more.

This comes after the startup last raised US$2.1 million in its Series A round in September last year.

Komunal said the funds will be used to “accelerate financial inclusion and strengthen the neo-rural bank ecosystem in Indonesia, especially outside the Greater Jakarta area”.

The company offers neo-rural bank services in Indonesia, with a particular target on Indonesia’s tier 2 and tier 3 cities — categories of cities with a smaller population within the country.

It has two main business lines — DepositoBPR by Komunal and Komunal P2P Lending. The former is deposit marketplace for rural banks, while the latter is a peer-to-peer lending platform that connects micro, small & medium enterprises (MSMEs) with lenders.

The tech group achieved a positive earnings before interest, taxes, depreciation and amortisation in October last year after its loans business expanded more than four times on the year.

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In 2022, it disbursed US$230 million worth of deposits and loans to Bank Perkreditan Rakyat (BPR), also known as Indonesia’s rural bank, and MSMEs, up from US$50 million in 2021.

Komunal said it expects transaction volume to exceed US$500 million by 2023.

Hendry Lieviant, chief executive officer of Komunal, said: “We are optimistic that the collaboration between fintech and incumbent banks, including rural banks, will create a very strong synergy. Komunal sees the potential for partnerships with BPR to increase financial inclusion for MSMEs in tier 2 and 3 cities.”

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“In 2023, we hope to reach a wider market, particularly Bank Perkreditan Rakyat users and partners outside Java and Bali.”

Separately, the group also announced that it has appointed Peter Jacobs as its commissioner since the start of this year. Jacobs was previously executive director, head of banking service, licensing, and treasury operation department at Bank Indonesia.