Heaptalk, Jakarta — Modalku Group has secured a $25 million equity investment from Cool Japan Fund (CJF), Japan’s sovereign wealth fund. The newly acquired funding will strengthen the group’s core SME financing operations across its five active markets: Singapore, Indonesia, Malaysia, Thailand, and Vietnam. Additionally, the company aims to accelerate the growth of its payments business, which it launched in 2022.
The partnership with Cool Japan Fund extends beyond financial backing. By leveraging Modalku Group’s extensive experience in supporting SMEs, the collaboration will cater to Japanese enterprises seeking to establish or expand operations in Southeast Asia. This initiative will enhance commercial ties between Japanese firms and local SMEs while promoting Japanese culture and lifestyle products in the region’s markets.
“With increasing interest from Japanese firms in this region, our investment will drive demand for Japanese products and services abroad, benefitting Japan’s economy and local SMEs engaging with Japanese businesses.” President and CEO of CJF, Kenichi Kawasaki, admitted.
The investment arrives during significant growth for digital financial services in Southeast Asia, particularly in digital lending, which accounts for approximately 65% of the sector’s revenue. The region’s total loan book is projected to grow from $71 billion in 2024 to an estimated $200-300 billion by 2030, highlighting an untapped $2.5 trillion credit gap.
This funding builds upon milestones for Modalku Group in 2024, including equity investment from Maybank and a third consecutive credit facility from HSBC’s ASEAN Growth Fund, contributing to a $100 million commitment. Since entering the space in 2022, the platform has facilitated over $4 billion in SME financing for nearly 100,000 businesses and processed an annualized gross transaction value (GTV) of $1.4 billion in payments.
“We’re honored by Cool Japan Fund’s support in bridging Japanese businesses with Southeast Asia’s vibrant SME ecosystem. Many of our existing clients are Japanese companies or their suppliers and customers, and this collaboration will deepen these connections.” Co-founder and Group CEO of Modalku Group, Kelvin Teo, concluded.
