Information on the Target

Cento Ventures has successfully led a funding round of US$2.5 million for Finfra, an Indonesia-based provider specializing in lending-as-a-service infrastructure. This investment aims to support Finfra's mission to expand embedded lending solutions across Indonesia. The funding round included co-investors such as Accion Venture Lab, Z Venture Capital, and Matiss Ansviesulis, the founder of Avafin. Additionally, Finfra has a robust roster of existing investors including Hustle Fund, Firstpick, DS/X Ventures, Seedstars, Fintech Nation Fund, BADideas Fund, and Gold Dragon Ventures.

Industry Overview in Indonesia

The small and medium enterprise (SME) sector plays a pivotal role in the economic landscape of Indonesia, with approximately 64.2 million micro, small, and medium enterprises (MSMEs) driving 61% of the nation's GDP and providing employment for over 100 million individuals. The importance of SMEs is magnified in Indonesia, reflecting the broader trend observed across Southeast Asia.

Recognizing the critical need for digitization, the Indonesian government is committed to helping nearly half of the country's SMEs—around 30 million—transition into the digital economy over the next few years. However, digital onboarding represents just the first hurdle; these newly digitalized SMEs require access to credit to foster their ongoing growth.

As a result, numerous digital platforms servicing Indonesian consumers and businesses are increasingly incorporating credit offerings into their operations. Finfra’s solution for embedded lending is exceptionally well-timed for this evolving digital economy, providing an array of credit product development tools that comply with existing Indonesian regulations.

Finfra’s platform effectively bridges the gap between digital platforms and capital providers, delivering comprehensive loan management systems, scoring tools, portfolio analytics, and access to debt capital. This model’s validation is enhanced by a significant partnership with Tyme Group, a multi-country digital banking consortium, which will utilize Finfra’s offerings to introduce embedded lending solutions, including merchant cash advances, throughout Indonesia.

The Rationale Behind the Deal

The collaboration between Finfra and its investors is motivated by the rapid growth of businesses incorporating lending services, as well as the increasing interest from lenders targeting the Indonesian market. Finfra's capacity to connect both borrowers and lenders is positioned as a transformative development in this evolving landscape.

Supported by a solid foundation of investors, Finfra is set on a trajectory towards profitability, reinforcing its commitment to enhancing financial inclusion and creating sustainable financing solutions for Indonesia's SMEs.

Information About the Investor

Cento Ventures is a prominent investment firm dedicated to nurturing and supporting innovative startups across various sectors. Its investment in Finfra aligns with its strategy of backing companies that have the potential to drive significant changes within their respective industries. Cento’s expertise in financial technology enhances its ability to identify promising ventures that are well-positioned for growth.

By investing in Finfra, Cento Ventures aims to facilitate the expansion of embedded lending services across Indonesia, demonstrating its belief in the company's vision and operational capabilities to deliver critical financial services efficiently and responsibly.

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The investment in Finfra appears to be a promising one, primarily due to the burgeoning demand for financial services among SMEs in Indonesia, combined with the government's push for digitalization. The partnership with Tyme Group further strengthens Finfra's market position, validating its business model as essential within the industry.

Moreover, the company’s ability to more than double its quarterly gross profit in Q4 2024 compared to Q4 2023 indicates a strong growth trajectory. Finfra’s successful facilitation of over $65 million in credit for underserved businesses attests to its effective operational model.

In conclusion, Finfra is poised to make significant strides in the Indonesian lending landscape. As it continues to expand its services and client base, the potential returns for investors, including Cento Ventures, are likely to be considerable, underscoring the investment's strategic merit.

This deal represents a significant step toward filling the financing gap for Indonesian SMEs and aligns with global trends favoring digital lending solutions.

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