KREDIVO

Akshay Garg had already built and sold an ad-tech company called Komli Media before he turned to lending. In 2015 he co-founded FinAccel, the parent behind Kredivo, based in Jakarta.

The idea was simple. Millions of Indonesians shop online but cannot get a credit card.

Banks find them too small and too hard to score. Kredivo launched in 2016 to fill that gap.

It used alternative data, things like a phone and basic digital records, to approve credit in real time.

Kredivo makes money the way a lender does. When you buy something online, Kredivo pays the merchant right away.

You pay Kredivo back, either in 30 days with no interest or over three to twelve months with interest. That interest and the late fees are the revenue.

Merchants also pay a fee because pay-later shoppers tend to spend more and abandon fewer carts. Kredivo has pushed past checkout into personal loans and a card too.

Kredivo is the flagship, a pay-later credit line used at checkout and through a virtual card. There is also Kredivo personal loans for larger cash needs.

The company added card products to spend the credit line more widely. In Vietnam it runs the same pay-later product under the Kredivo brand.

The real trick was distribution. Instead of begging shoppers to download an app, Kredivo planted itself inside the checkout pages of Indonesia's biggest online stores.

It partnered with Tokopedia, Lazada, and Shopee. So the credit button showed up exactly when someone was about to buy.

It then moved into Vietnam to run the same playbook in another under-banked market.

Lending to people banks reject is the whole business. It is also the whole risk.

If Kredivo misreads who will pay back, losses pile up fast. The 2021 SPAC merger with VPC Impact Acquisition Holdings II valued the company near $2.5 billion.

It fell apart in 2022 as tech valuations crashed and pay-later firms lost their shine. Kredivo raised private money instead, including a $120 million injection from Japan's Mizuho Bank.

Profitability in consumer lending is a grind, and regulators across Southeast Asia keep tightening the rules.

FinAccel, Kredivo's parent, pulled in a mix of venture and strategic money. Early backers included Jungle Ventures and Square Peg Capital.

A 2021 round drew the Asia Growth Fund, tied to Mirae Asset and Naver. Then Mizuho Bank put in $120 million in 2022, a vote of confidence from a major Japanese lender.

Victory Park Capital and other debt providers supplied much of the loan capital that actually funds the lending.