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Kredivo raises $270 million from Mizuho, others
The investment, which was completed a year after a failed IPO, is aimed at helping Kredivo with existing business operations and support its move into digital banking.
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redivo Holdings, the parent company of buy now, pay later (BNPL) service Kredivo, announced it has raised US$270 million in a series D funding round.
The deal was led by Mizuho Bank, a subsidiary of Japan-based Mizuho Financial Group, which invested $125 million in this round, the start-up announced in a press release on Thursday.
Kredivo's existing investors, such as Square Peg Capital, Jungle Ventures, Naver Financial Corporation, GMO Venture Partners and Openspace Ventures, also participated in the transaction.
Aside from the BNPL service, which allows users to conduct online or offline transactions and pay in installments, Kredivo also provides cash loans through its KrediFazz service.
Last year, the fintech firm acquired a majority stake in publicly-listed Bank Bisnis Internasional, and changed the lender’s name to Krom Bank. It has committed itself to increasing the bank's core capital to Rp 3 trillion, adhering to requirements from the Financial Services Authority (OJK), and plans to rebrand it as a digital bank.
The company follows other tech start-ups that have launched digital banks in the past two years, such as GoTo with Bank Jago, Akulaku with Bank Neo Commerce and Sea Group with SeaBank.
Read also: Digital payment industry ripe for consolidation
According to Kredivo's CEO Akshay Garg, the successful fundraiser is proof that investors continue to recognize the business scale, strength and potential of his firm amid challenging market conditions.
"Upcoming expansion to digital banking could synergize with our existing products and open an opportunity for us to be the preferred digital financial platform for millions of people in Southeast Asia," Akshay said in the statement on Thursday.
Having started its operations in Indonesia in 2016, the fintech firm expanded to Vietnam in 2021.
Daisuke Horiuchi, group executive officer deputy head of retail and business banking at Mizuho Financial Group, said Kredivo had a good track record in Southeast Asia.
"The firm could keep risk metrics like a bank and build a capital-efficient business," Daisuke stated.
Rebound from failed IPO
In August 2021, prior to its expansion to the Vietnam market, Kredivo announced its plan to go public in the United States through a deal with a special purpose acquisition company (SPAC) called VPC Impact Acquisition Holdings II that would have valued the company at $2.5 billion.
However, seven months later, both sides agreed to terminate the plan. The announcement came at a time when volatility in the US market had spiked, triggered mostly by geopolitical tensions and concerns about interest rate hikes.
"Unfavorable public market conditions and process delays outside of our and Kredivo's control have affected our transaction timeline and made it infeasible to close the transaction," Gordon Watson, co-CEO of VPC Impact, said at the time.
Kredivo is not the only Indonesian start-up that has been unsuccessful in listing in the US through the alternate IPO route yet continues to raise money from private investors.
Last year, local online travel giant Traveloka canceled its plans to go public via SPAC, only to raise Rp 4.5 trillion from national sovereign wealth fund Indonesia Investment Authority (INA) and global investment firm BlackRock instead.
