Singapore-based fintech startup Funding Societies has secured a $25 million investment from Japan's sovereign wealth fund, Cool Japan Fund (CJF), to further expand its small and medium-sized enterprise (SME) lending platform across Southeast Asia. This marks CJF's first investment in a fintech company in the region.

Funding Societies, founded in 2015 by Kelvin Teo and Reynold Wijaya, addresses the significant working capital challenges faced by SMEs in Southeast Asia. The startup has already loaned over $4 billion to more than 100,000 businesses across Singapore, Indonesia, Malaysia, Thailand, and Vietnam. This latest funding brings the total raised by Funding Societies to approximately $250 million in equity.

The investment will be used to accelerate the company's primary focus on providing financing services to SMEs in the region. Funding Societies also plans to invest in artificial intelligence to digitize and automate the lending application process, as well as grow its payments business, which was launched in 2022. Additionally, through its partnership with CJF, the startup will offer financial services to Japanese companies operating or looking to expand in Southeast Asia.

Funding Societies provides a wide range of financing options, including term loans, micro-loans, and asset-backed business loans, to meet the diverse needs of businesses at different stages. The startup's one-stop shop service, which offers short-term financing to supply chain financing via online and offline channels and partnerships, sets it apart from competitors like Validus and Bluecell Intelligence.

The Southeast Asia SME lending market has significantly consolidated since Funding Societies' $144 million Series C+ funding round led by SoftBank Vision Fund 2 in February 2022. The startup expects more consolidation among fintechs focusing on credit in Southeast Asia, as many companies are struggling to raise funds in the current funding climate.

In December 2022, Funding Societies made its first acquisition, Sequoia-backed payments fintech CardUp, which almost tripled its revenue while maintaining its headcount almost flat. The startup has also made investments in three companies, including a fintech company and a startup specializing in POS software.

A social and economic impact report collaborated on with the Asian Development Bank (ADB) in 2020 found that Funding Societies-backed MSMEs contributed $3.6 billion to GDP and created approximately 350,000 new jobs. The startup's quick disbursement and simple application process also helped SMEs boost their revenue by 13%.

As the fintech landscape in Southeast Asia continues to evolve, Funding Societies' latest funding and expansion plans position the startup as a market leader in addressing the region's working capital challenges. With its focus on SME lending and commitment to innovation, Funding Societies is poised to make a significant impact on the region's economic growth and job creation.