Japanese business group Sumitomo’s Indonesian subsidiary is likely to invest in Indonesian fintech company Cashlez, according to three people aware of the development.
Jakarta-headquartered PT Summit Auto Group, a subsidiary of Sumitomo Corporation, is close to investing in Cashlez’s Series B funding round said to be worth $5 million. PT Summit Auto Group is a consulting and investment holding company.
Cashlez is one of the first Indonesian startups to locally develop a host of payment solutions that include a fully certified card present payment gateway and merchant-centric reporting tools. Its existing backers include Mandiri Capital Indonesia, the venture capital arm of state-owned Bank Mandiri, that led a $2-million funding round for the firm last year. That round was joined by Gan Kapital.
The startup is also mulling going public in the near future, the sources added.
Cashlez had not returned a request for comment at the time of publishing.
Over the past year, the fintech startup has received recognition for its business, particularly from the government which selected the company as one of the 70 startups invited to participate in its first Next Indonesian Unicorn (Nexticorn) event. It has also teamed up with Visa in the area of card acceptance by distributing 5,000 mobile point-of-sale (mPOS) devices in a number of popular tourist cities.
The upcoming funding round will give Cashlez additional firepower to fight off increasing competition in the mPOS space from the likes of Olsera, Pawoon and Moka.
Mandiri Capital, incidentally, is also an investor in Moka, along with a host of other local and regional investors, including Convergence Ventures, East Ventures, Fenox VC and Northstar Group. The startup last raised a $2-million Series A extension round in February last year.
For the past couple of years, Sumitomo Mitsui Financial Group, which is one of Japan’s largest bank by market capitalization, has been looking to strengthen its grip in Southeast Asia’s largest market. While the Japanese firm already has presence in Indonesia through subsidiary Bank Sumitomo Mitsui Indonesia (SMBCI), it is currently finalizing a merger with local mid-size lender BTPN to form a “bigger and stronger bank”.
The group’s investment in fintech in Indonesia follows similar moves carried out by fellow Japanese financial services firms. SBI Holdings, for example, has already started taking bets in Indonesian fintech startups including lending companies Taralite and Investree, while J Trust Bank, the Indonesian subsidiary of Japanese financial group J Trust is also understood to be looking into fintech investment after recently setting up a new fintech division.
If the deal goes through, Cashlez will count as Sumitomo’s second investment in a Southeast Asian fintech firm after the group had earlier this year injected an undisclosed amount of capital for the Series B round of Malaysian fintech startup Soft Space. The investment, which was announced in April, was Sumitomo’s first deal outside of Japan and the US.