•  CJF’s injection kicks off Funding Societies’ 10th year track record in serving SMEs in SEA 

• Investment bridges gap for SEA’s SMEs supporting Japanese companies’ overseas expansion

Funding Societies | Modalku (Funding Societies), the largest unified SME (small and medium enterprises) digital finance platform in Southeast Asia, today announced that it has raised over THB 846 million (US$25 million) in equity investment from Cool Japan Fund (CJF) – Japan’s sovereign wealth fund. The investment from CJF signifies the fund’s first investment into a Fintech company in Southeast Asia.

Funding Societies will also funnel the investment to deepen its core business in SME financing across its five markets (Thailand ,Singapore, Indonesia, Malaysia,  and Vietnam); whilst further expanding its payments business which has already been launched in some markets since 2022. 

Having served SMEs in fulfilling their business potential for a decade, the company will focus on helping businesses get paid faster through innovative receivables and financing solutions. It will also leverage technology and AI to digitise and automate lending origination processes. These initiatives and synergies between payments and lending, align with the company's objectives of achieving growth and profitability. In Thailand, Funding Societies provides invoice financing and working capital loans to SMEs without requiring collateral. Using technology it is able to process and disburse loans faster than traditional financial institutions. 

Annually, Japanese direct investment in the ASEAN region averaged about THB 629 billion  (US$18.6 billion). Furthermore, there are approximately 15,000 business establishments set up by Japanese companies in the region. In a 2024 survey conducted by the Japan Bank for International Cooperation, asking 500 Japanese companies their top 10 promising countries for overseas business development, ASEAN countries made up half the list.

Through this investment, Funding Societies will also embark on a partnership with CJF, leveraging the former’s strong track record in serving SMEs in Southeast Asia, to provide the financial services to support Japanese companies. The partnership will foster positive commercial relations for Japanese companies and local SMEs in the region, and help expand overseas demand for attractive products and services unique to Japanese lifestyle and culture by supporting the overseas business expansion of Japanese companies engaged in providing them.

President and CEO of Cool Japan Fund, Kenichi Kawasaki, said, “We are excited to be backing Funding Societies through this investment. Their track record of supporting SMEs in Southeast Asia well places them to help Japanese companies overcome challenges when entering new overseas markets – particularly in this region. With the shift of interest from Japanese firms steering towards Southeast Asia, we believe our partnership with Funding Societies through this investment will grow the overseas demand of Japanese products and services, in turn, benefitting Japan’s economy as well as the local SMEs doing business with Japanese companies.”

Co-founder and Group CEO of Funding Societies | Modalku, Kelvin Teo, said, “We’re honored for the commitment from Cool Japan to collaborate and support Japanese companies expanding into this region. Many businesses we serve in Southeast Asia are Japanese firms, suppliers and/ or customers to them.  Together with CJF, we intend to further strengthen these ties.”

Vikas Jain, Country Head of Funding Societies Thailand,  said "This equity raise will help us invest further in strengthening our value proposition to Thai businesses through financing their growth and working capital needs. We will continue to play a pivotal role in the Fintech lending ecosystem while contributing towards nation building through serving the needs of SMEs in Thailand." 

Revenue of digital financial services in Southeast Asia is projected to be on the ascent, with digital lending to be the biggest driver – contributing approximately 65% of the total revenue. The total loanbook has a year-on-year growth of over 20% to THB 2.41 trillion (US$71 billion) from 2023 to 2024 (only covering under 1% of the US$2.5 trillion credit access gap in the region), and is expected to grow steadily to approximately THB 6.77 to 10.16 trillion (US$200-300 billion) by 2023.

This injection follows successful milestones in 2024 achieved by Funding Societies including: a strategic equity investment by Maybank and a third annual credit facility from HSBC’s ASEAN Growth Fund which is part of an – an accumulative commitment of over US$100 million credit facility with the bank .

To date, Funding Societies has achieved over THB 140 billion  (US$4 billion) in business financing serving about 100,000 SMEs, and processed an annualised payments gross transactions value (GTV) of over THB 48.8 billion (US$1.4 billion) – since expanding into its payments business in 2022.