Modalku Acquires Singapore-Based Fintech Payment "CardUp"

Modalku Group announced acquisition with an undisclosed amount over CardUp, a Singapore-based fintech startup providing payment solutions. CardUp capabilities are to enhance Modalku's loan products in order to provide more integrated financial services for MSMEs in Southeast Asia.

Once the acquisition process is complete and approved by local regulators, the Modalku Group will welcome CardUp Co-founder Nicki Ramsay as a member of the management team to lead the payments business while retaining all CardUp employees in Asia.

In an official statement (29/6), Co-founder of Funding Societies and CEO of Modalku Indonesia, Reynold Wijaya, said that his team has known Nicki and CardUp since 2018. In terms of culture and strategy, this is quite a match for the Modalku Group.

He said, with this acquisition, the company can accelerate its leadership in the regional fintech market by combining payment service capabilities, improving user experience, and adding local licenses to Modalku Group's digital lending services in key markets. “We are excited to work with the CardUp team. This is an honor for us,” said Reynold.

CardUp's Founder and CEO, Nicki Ramsay said, "We also identify the Modalku Group as a perfect associate for the company's expertise in payments. For him, this acquisition reflects the strong strategic and cultural synergy between the two companies.

“We have the same mission to empower MSMEs and have been providing the medium for them in business operations and cash flow management. We believe that CardUp has a bright future with the Modalku Group and we are delighted to be working together on this new journey,” Ramsay added.

CardUp will continue to operate its business and consumer services, also continue its long-term relationships with partners, card issuers, and media partners. The two companies will take advantage of synergies through complementary human resources, technological innovation, banking, and technology partnerships to continue to empower MSMEs in Southeast Asia.

This acquisition, Reynolds continued, is one of the most significant corporate actions during this year. In February, the company raised $294 million in Series C funding, with $144 million streaming from equity. Moreover, the company also invested in Bank Index in Indonesia, launched a virtual business card called Elevate in Singapore, and expanded business in Vietnam. "All of this is to strengthen and expand the range of corporate financial services for MSMEs."

About CardUp

CardUp was founded in 2016 in Singapore, providing payment solutions for individuals and businesses to pay suppliers and receive payments from customers digitally. In addition to Singapore, the solution has been used by tens of thousands of businesses on various business and industrial scales (B2B and C2B) in Malaysia and Hong Kong. They use CardUp for transactions related to payroll, rent payments, corporate taxes, vendor payments, accounts receivable flows, and fees between countries.

CardUp is licensed by the Monetary Authority of Singapore (MAS) as a Major Payment Institution under the Payment Services Act and is also licensed by the Hong Kong Customs and Excise Department or HKCED. ) as a Financial Service Operator (Money Service Operator).

CardUp is in high demand from businesses looking to save time and money by digitizing payment transactions. This is reflected in the claimed quarterly growth of 53%.

Momentum for MSMEs

The acquisition is considered to have the right momentum, as the MSME segment is projected to drive Southeast Asia's digital financial market to $60 billion by 2025, according to a Bain & Company report. Meanwhile, citing McKinsey, the business payments sector will grow at a CAGR of 10% over the next five years.

Modalku provides digital funding services, borrowers (potential MSMEs) can get an unsecured business capital loan of up to IDR 2 billion funded by platform lenders (individuals or institutions looking for alternative investments) through the digital market.

In addition to Indonesia, Modalku also operates in Singapore, Malaysia, Thailand, and Vietnam under the name Funding Societies. To date, the Modalku Group has succeeded in disbursing business loans of Rp. 35.14 trillion to more than 5 million MSME loan transactions in Southeast Asia.

–Original article is in Indonesian, translated by Kristin Siagian