INDONESIAN fintech startup Komunal has obtained US$5.5 million in a Series A extension funding round, it announced on Tuesday (Jan 9).

New investor Sumitomo Corporation Equity Asia, the corporate venture capital arm of Tokyo-listed Sumitomo Corporation, led the round. Other investors include new investor Jafco Asia and previous investors Skystar Capital, Sovereign Capital and Gobi Partners.

The extension round followed “interest from new investors” after its Series A round in January 2023, which raised US$8.5 million, Komunal chief executive Hendry Lieviant told The Business Times.

Komunal helps rural banks digitalise their operations. These rural lenders can use Komunal’s platforms and products to offer digital services without having to build their own infrastructure.

The fresh funds from the extension round will go towards a new management software for rural banks, although the company did not say how the software could be used.

Komunal will also use the funds to forge partnerships with more rural lenders in the Sumatra, Sulawesi and Kalimantan islands, said Lieviant. Most of the fintech’s partnering rural banks are currently based in Java and Bali.

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Komunal plans to have a Series B round sometime in Q3 or Q4 this year, added Lieviant.

Alan Tang, vice-president of Sumitomo Corporation Equity Asia, said the fintech’s product is “instrumental in expanding the availability of credit to small and medium enterprises, and ultimately unlocking the economic potential of Indonesia’s rural areas”.

Komunal said it has partnered 376 rural banks across Indonesia to provide loans to micro, small and medium enterprises, mostly based in the less-populated tier-2 and tier-3 cities.

Interest rates on deposits are also higher than those at commercial banks and guaranteed by public fund guarantor Indonesia Deposit Insurance Corporation, the company added.

Komunal said it channelled US$600 million in combined loans and deposits in 2023, almost triple the amount in 2022.

The fintech said it maintained operational profitability for the second half of 2023. It had reported a loss of S$237,324 for 2022, up from a loss of S$150,742 for 2021, according to financial filings on data platform Alternatives.pe.