Singapore: Vertex Ventures invests $2m in Turnkey Lender

Fro left to right: Dimitry Voronenko (Turnkey Lender), Janet Young (UOB), Elena Ionenko (Turnkey Lender), Carmen Yuen (Vertex Ventures), Felex Tan (The FinLab).jpg

Turnkey Lender, a cloud- based loan management system, has raised $2 million venture investment from Vertex Ventures. The venture offers a SaaS solution that employs machine learning and data analysis to understand potential loan applicants, ranging from small scale to large scale loans.

Vertex Ventures is the venture capital arm of Temasek Holdings and manages cumulative committed capital in excess of $2.5 billion. Its portfolio is heavily weighted towards early-stage IT and healthcare ventures in China, Silicon Valley, India, Israel, and Southeast Asia. Some of its portfolio firms are Waze, Grab, and Reebonz.

Turnkey Lender has previously received seed funding from SMRK VC Fund. The initial development for the company was done in the Ukraine, where it has its roots. It is currently headquartered in Singapore, where the team believes that can have greater flexibility in approaching the different financial needs of their international clients.

The company was a winner at the MAS FinTech Awards in November 2016 and was among the first cohort of startups that were selected for FinLab’s acceleration program in the city-state.

Investment proceeds will be used to engage in expanding business operations across the region, product development and talent acquisition. The company told DEALSTREETASIA that the primary growth markets it if focusing on are Indonesia, Philippines and Thailand.

Its co-founders are Elena Ionenko and Dmitry Voronenko, both with over 16 years of experience in the financial and fintech spaces, built the solution when they saw that similarly to commerce migrating online and becoming e-commerce, lending is going online too. Voronenko’s background is with large banks while Ionenko’s roots are in micro-finance.

The two perceived a substantial demand for online lending automation software that was scalable and could be deployed in different countries, with the outcome of their efforts being Turnkey Lender’s software solution, which is designed to adapt to multiple permutations of lending situations.

Voroneko explained: “Our goal is to enable new lending companies with the bank-grade technology and to help existing small and medium-sized lenders digitise their services. The market opportunity is enormous, and with great partners like Vertex Ventures, we’ll be able to expand in the existing markets and to pursue new ones.”

Highlighting the potential of emerging markets, Ionenko told DEALSTREETASIA: “The major challenge is the absence of the data about potential borrowers. Since we have a lot of experience working on emerging markets, we offer a generic scoring model as part of our system to our new clients. It’s a good starting point, and then our system collects all the statics properly and monitors the accuracy of the scoring model, sending alerts when it needs to be adjusted.”

“After several months of operations, the scorecard becomes more and more accurate, since it’s based on the statistical dataset of the particular lender. We also partner with various local data providers, some of which are using alternative ways of credit scoring. It’s very easy for us to connect our system to them through API and to use their scoring in our decision making.”

Due to the flexible nature of Turnkey Lender’s solution, its current customer base is international in nature; it has over 40 customers across 25 countries, with most of its clients based in the US while its Southeast Asian clients originate from Indonesia and Philippines.

Its customers can be categorised into three main groups: alternative lenders and financing companies; Micro-lenders and cooperatives; and small banks. With many of these clients requiring handwritten application forms and manual processing, Turnkey Lender claims to be among the first firms to provide a software service that accelerates the onboarding of new customers and loan assessment in a streamlined manner.

Ionenko told this portal: “Credit scoring is just a part of our solution, we provide end-to-end automation of the lending. So in addition to just credit scoring, we also enable automated decision-making based on the configurable decision rules, loan servicing, document management, soft collection and reporting – all on one convenient platform.”

The firm operates by charging a one-time setup fee for the client, followed by a subsequent monthly or annual fee for the software service that allows the client company to easily customise the results from a dashboard. 

For its larger and more sophisticated clients, it already offers AI automation capabilities. At this time, its R&D team is working on adding more of it to a standard SaaS solution.

Asked about how they company would achieve an exit, Ionenko said, “We’re focusing on growing our company;  potentially it can be acquired by a credit bureau since our solution complements their services.”

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