Indonesia: P2P app Julo raises seed funding from Skystar Capital, others

Julo team

Indonesian peer-to-peer (P2P) lending startup Julo has raised an undisclosed amount of investment in a seed round led by Skystar Capital, along with East Ventures, Convergence Ventures, according to an announcement. A few notable angel investors also participated in the round.

Julo is focussed on financial inclusion in Indonesia by helping over 100 million people obtain loans for their various personal use.

Loan applicants can carry out the process from their phones through Julo’s app, where they submit pictures of personal documents and then receive their loan within 24 hours upon successful verification.

The platform also allows users to manage loans, due dates, and cashback bonuses with alerts and reminders to keep them on top of payments. The app is currently available only on Android.

Edward Gunawan, Partner of Skystar Capital said that Julo’s key differentiator from its competitors is in its sophisticated credit scoring algorithm.

“We believe that having a strong credit scoring algorithm is a key differentiator for P2P lending startups. Driven by a technically strong founding team, Julo is one of the first locally grown P2P lending startups that has developed its own proprietary credit scoring algorithm,” Gunawan stated.

Since its launch in January 2017, Julo claims to have served “thousands” of users.

The startup was co-founded by Adrianus Hitijahubessy, Hans Sebastian, and Victor Darmadi, who met during their tenure in Silicon Valley. The idea for Julo started when Hitijahubessy was building AI-based credit scoring solutions for Latin America and African countries.

“I realized that instead of helping consumers in Latin America and African countries gain access to credit, I should be helping people in my home country. Indonesia is the perfect seedbed for the right-minded fintech lending company to flourish,” Hitijahubessy said.

Indonesia has a large segment of the population at the base of the financial pyramid and low consumer credit liquidity. This, catalyzed by rapid technological and infrastructural transformation in the past few years, makes the market highly attractive not only for fintech firms but also other businesses.

With a staggering annual credit gap of approximately $80 billion and Indonesia’s low-ranking household debt to GDP ratio a mere 17 per cent (compared with that of Thailand at 68 per cent, Malaysia at 80 per cent and Singapore at 60 per cent), formal consumer credit access in Indonesia is severely lacking.

Wilson Cuaca, managing partner of East Ventures believed that financial inclusion as a vertical was gaining momentum.

“It is imperative that we offer socially-responsible loans with compelling pricing to potential borrowers who are not yet creditworthy. JULO is able to offer significantly lower rates than our competitors (online and offline) due to our better credit risk assessment, enabled by machine learning-based underwriting algorithms,” Cuaca stated.

Adrian Li, managing partner of Convergence Ventures highlighted, “Julo product directly addresses the largest bottleneck in effectively making consumer loans and will unlock the more than $35 billion market potential in online consumer lending in Indonesia.”

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