KKFund, a Singapore-based venture capital firm, has led a RM2 million ($447,000) seed funding round in Malaysian supply chain finance platform CapitalBay.
It helps corporate buyers and SME suppliers to optimise their working capital through technology.
“While there have been growing interests from financial institutions, Malaysia’s supply chain finance scene is still in its infancy stage and facing a unique set of problems,” said Ang Xing Xian, CapitalBay’s CEO and co-founder.
Many suppliers in Malaysia who are small and medium-sized businesses now have to wait 50 per cent longer to collect their invoice payments compared to three years ago, with more than RM100 billion working capital trapped in their receivables, the company said.
CapitalBay’s solutions allow SME suppliers to receive early payments from liquidity providers leveraging on their buyers’ credit strengths, with no collateral required, while large corporate buyers extend their payment terms in a sustainable manner and reduce overall costs in the supply chain.
The company claims it has done multiple transactions with Bursa-listed companies, who collectively hold more than RM2 billion worth of accounts payables.
“Supply chain finance market is a potentially huge market (more than $2 trillion opportunity globally), but due to the complexity, it is still largely untapped in Southeast Asia. CapitalBay is the one and only player who is minimizing this complexity in Southeast Asia and this would be an excellent opportunity for both buyers and suppliers,” said KK Fund’s general partner Koichi Saito.
Going beyond the digital marketplace concept, CapitalBay serves as a platform that connects multiple financial institutions to a large network of corporate supply chains through a implementation process that reduces the need for capital expenditure in technology development, on-going transactional support and execution.