Kelvin Teo (left) with Ryan Galloway at the launch of the Vietnam’s operations

Funding Societies (Modalku in Indonesia), was officially launched in Vietnam yesterday, marking its fifth market expansion. Addressing the SME financing gap in Vietnam, where the SME landscape is growing yet financially underserved, the move is a natural next step for the fintech company as it pushes further into Southeast Asia.

According to Vietnam’s Ministry of Planning and Investment, 98 percent of operating businesses in the country in 2020 are SMEs, employing more than 5.6 million workers and accounting for more than US$241 billion (RM1.045 trillion) or 40 percent of Vietnam’s gross domestic product (GDP).

However, the gap between the number of registered SMEs and the number of businesses in operation has been widening over the years, with only 54 percent of registered SMEs appearing to be active in 2019.

Access to funding remains one of the greatest obstacles to the growth of Vietnamese SMEs, and this has only been exacerbated by the Covid-19 pandemic.

As such, Funding Societies serves to fill the gap for SME financing with an Artificial Intelligence (AI)-led credit model, offering traditional term loans, customizable financing solutions, and a range of trade-based financing options, such as invoice financing. In its seven years of operation, the company has disbursed over US$2 billion (RM9 billion) in business financing through more than 5 million loans across the region.

Kelvin Teo, co-founder and group CEO of Funding Societies, said, “Since our inception in 2015, our vision is to uplift societies in Southeast Asia. Hence, Vietnam has always been part of our roadmap. This is an opportune time as we ride out of Covid-19, build a solid team with local fintech veteran Ryan Galloway, and secure investment from tech giant VNG. We believe that Vietnam will be one of our largest markets given its enormous potential.”

Earlier this year, Vietnamese tech giant VNG Corporation invested US$22.5 million (RM97.65 million) in Funding Societies as part of the company’s US$294 million (RM1.23 billion) series C+ fundraise, of which US$144 million was raised in equity and US$150 million in debt lines.

Funding Societies also received the support of other notable investors including SoftBank Vision Fund 2, Rapyd Ventures, EDBI, Indies Capital, Ascend Vietnam Ventures, and K3 Ventures, among others.

VNG will help Funding Societies to quickly adapt to the local market so it can provide solutions tailored to the unique needs of Vietnamese businesses.

Ryan Galloway, country director of Funding Societies Vietnam, said, “Vietnam SMEs don’t have the same access to venture and early-stage capital markets as other Southeast Asian markets, but the Vietnam market is equally as competitive, so Vietnamese entrepreneurs are trained to do more with less. We see lots of opportunity in Vietnam and we’re excited to support the country’s burgeoning SME landscape as we continue to serve the needs of millions of SMEs across Southeast Asia.”

Since its soft launch in Vietnam in December 2021, Funding Societies has achieved over US$20 million (RM86.8 million) in disbursements, and it is looking to increase this to US$90 million (RM390.29 million) this year by working with technology platforms and banking partners.


Please enter your comment!
Please enter your name here