Heaptalk, Jakarta — A Jakarta-based digital mortgage, IDEAL, has raised US$3.8 million in a pre-seed funding round. This round is led by AC Ventures and Alpha JWC Ventures, with the participation of Living Lab Ventures and Ciputra Group.
The IDEAL startup will allocate its new capital to develop its products and expand human capital as well as the platform’s coverage – from primary property to secondary property – while performing mortgage refinancing.
The Managing Partner of AC Ventures, Adrian Li, stated that Indonesia’s mortgage penetration is only 3% of local GDP, the number is far below Malaysia and Singapore which attain 30% or higher. He claimed that Indonesia could provide the opportunity of US$30 billion by doubling a mortgage’s penetration to 6% through financial access.
According to Bank Indonesia’s report in 2021, the local mortgage industry is valued at USD39 billion with a Compounded Annual Growth Rate (CAGR) forecasted at 17% over the next five years. Gen Y and Z, as the technology-savvy generations, will dominate the working population in the coming years and are predicted to become the primary audience in the home-ownership sector.
However, the Partner of Alpha JWC Ventures, Eko Kurniadi, perceived that house purchasing is getting harder for Indonesia’s next generation. Regardless of rising prices, people are also faced with a lack of financial literacy and challenging procedures in mortgage options, applications, and hidden expenses. With its technology, Eko believes the platform can democratize mortgage products and bridge financial solutions with a new generation of homebuyers.
In response to this issue, Co-Founder and the President of IDEAL, Ian Daniel Santoso, stated, “Our product is built from in-depth users survey and extensive discussions with industry players to reach proper solutions aligned with the current landscape needed. In addition, we believe in executing our goals, supported by our excellent team with relevant background and expertise,”
The IDEAL platform provides solutions to streamline the process and improve the mortgage experience for homebuyers in Indonesia to address these pain points. The company also grants control back to the buyer to select the best available mortgage product on the market.
In addition, the company will expand to secondary housing, mortgage refinancing, or take-over products and will also launch a dashboard to espouse users to monitor and manage their mortgages. Simultaneously, this startup also intends to expand into other big-ticket consumer loans to penetrate new markets in ASEAN.
“The IDEAL team is strong-suites to identify in the mortgage industry and bring domain expertise in fintech and real estate to create a one-stop-shop for mortgages in Indonesia. The startup also works with the bank’s API connections and gathers the data and applicant processes to increase the mortgage success rate,” added Adrian.
The IDEAL’s Business Model
Through its platform, this startup assists customers with the costs and installments in detail, simplifying the options suitable for their requisites and situations. The company also provides a direct application system to facilitate users in applying multiple banks with one set of data and a real-time tracking system to monitor the process.
In addition to efficient process and increased clarity, this platform claimed to offer a secure digital system that reduces human error and data leaks frequently occurring during the usual paper-based or messaging-app-based mortgage process.
IDEAL’s business model enables the startup to produce revenue through commissions from banks and property developers for every successful loan application through the platform. Since its debut, the company has cooperated with several banks, including CIMB Niaga, OCBC NISP, and Maybank. The company has also partnered with numerous property development in Indonesia, covering Sinar Mas Land, Ciputra Group, and Agung Sedayu Group.
“IDEAL is special as we put the consumer’s mind and heart first in product development decisions. We come with an extensive network in both the banking and the property development spaces. We believe our investors share a similar vision with us to help society in Indonesia to achieve their IDEAL life by digitizing the mortgage process,” IDEAL’s Co-Founder and CEO, Albert Raharja Surdaudaja, said.
