Small enterprise lending is a big market that has attracted large consideration from VC traders in recent times. Startups like Kabbage have raised greater than a billion dollars in enterprise capital and debt to create lending platforms for companies, and others within the house like Fundbox for lending and BlueVine for banking try to construct new, digital-first fashions for serving to SMB house owners develop their companies.
Whereas startups concentrating on the U.S. and European markets have proliferated, different worldwide markets have seen much less consideration. Portal Finance raised $200 million to assist companies with lending in Latin America, and First Circle raised a $26 million spherical to do the identical within the Philippines.
Now Jenfi desires to enter the combo. The corporate, based by Jeffrey Liu, who offered his previous startup GuavaPass to ClassPass for a couple of million, and Justin Louie, who was one of many first staff at GuavaPass, desires to broaden entry to small and medium enterprise loans for house owners in Southeast Asia, beginning with their first base of operations in Singapore.
“Even in a market like Singapore which is kind of well-established … half of those firms are nonetheless underbanked, [and] they don’t have entry to credit score,” Liu defined to me in an interview. “We realized there was a giant downside there.”
The corporate raised a US$1 million angel spherical of debt and fairness, and is presently going by YC’s accelerator program. Thus far, the startup has 50 debtors on its platform in line with Liu, and has lent SGD$600,000 to date since launch final 12 months.
By way of its product, the corporate both lends on to a small enterprise, or gives a digital Jenfi Mastercard that can be utilized for purchases.
What’s extra attention-grabbing proper now, although, is Jenfi’s mannequin, which is one thing that you just don’t see on a regular basis within the lending house. The corporate is approaching SMB lending purely from a development perspective. The startup desires to assist house owners put money into the expansion of their companies primarily by digital advertising and marketing, and takes a small share of future income in lieu of a hard and fast compensation schedule.
Liu says that “a part of the value-add is that we can assist them be simpler of their different advertising and marketing channels…” He mentioned that the startup doesn’t need to change into a service supplier, however has been constructing partnerships with different advertising and marketing businesses and providers that may assist house owners discover the proper development methods for them, after which execute on them funded by Jenfi capital. “Our objective is to have the ability to construct a community,” Liu says. “Advertising and marketing development is our preliminary product focus for this firm.”
The timing might be propitious. A examine by Google and Bain late final 12 months pegged Southeast Asia as a large alternative for digital providers, with deep smartphone penetration however nonetheless a comparatively restricted array of digital providers throughout a spread of classes. On-line advertising and marketing channels exist, however are under-optimized, notably compared to the massive sums dedicated to them in nations just like the U.S.
Over the subsequent two years, Liu and Louie hope to broaden to extra geographies, construct out their product providing and frequently construct long-term partnerships with enterprise house owners.