About Akshay Garg
Akshay Garg co-founded Komli Media India Private Limited, and served as its Business Head of Ad Network. Mr. Garg led Komli Media's ad network, where he was responsible for operations, sales, overall strategy and business management of the unit. He co-founded Komli Media, Inc. and served as its Vice President of International.
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Aug 25, 2021
Aline Wiraatmadia from CNBC Indonesia and Akshay Garg, CEO and Co-Founder of FinAccel dive into the firm's journey to become a publicly traded company on Wall Street with a US $2.5B SPAC deal. News provided by Share this article Share this article JAKARTA, Indonesia, Aug. 25, 2021 /PRNewswire/ -- Akshay Garg, CEO and Co-founder of FinAccel, the parent of Kredivo, the leading AI-enabled digital consumer credit platform in Southeast Asia, sat down with CNBC Indonesia. The interview dove deeper into the recent news that Kredivo and VPC Impact Acquisition Holdings II (NASDAQ: VPCB ) ("VPCB"), a special purpose acquisition company sponsored by Victory Park Capital ("VPC") entered into a definitive agreement for a business combination that will result in FinAccel becoming a publicly traded company. Kredivo is the first Southeast Asian fintech firm to list in the US and gain a spot on Wall Street. The valuation of the company is US $2.5 billion, and the transaction will deliver more than US $430 million of cash to its balance sheet. They are on the ground floor of a digital disruption in Indonesia and other emerging markets in the region. FinAccel's Decision to Go Public via a SPAC Structure CNBC representative, Aline Wiratmaja, sat down with CEO Akshay Garg to learn more about FinAccel and its decision to go public and why doing so via SPAC was the optimal choice for the business. The long relationship between Kredivo and Victory Park Capital also includes a US $200 million credit facility committed to the expansion of the company and its core product offerings. When asked about his decision to take the company public via SPAC, Akshay explains that the company's goal was "not necessarily to go down the SPAC route. But if you look at the advantages of the SPAC structure, which is that it allows you to go public relatively faster than a traditional IPO route, and it gives you pricing and deal certainty right in the beginning." The Challenges and Triumphs of a Southeast Asian Tech Company Listing in the US When taking a look at the startup landscape in the US stock exchanges it's quite rare for technology companies from Southeast Asia to get listed on the NASDAQ and New York Stock Exchange. Akshay explains that "there is a reason that the US is the deepest capital market in the world, from the New York Stock Exchange, and the NASDAQ, you're looking at what are the largest public markets anywhere in the world. And there is a reason that some of the world's largest, best companies choose to list in the US. You get access to very deep capital markets, which you just don't get in most other places in the world. Now, that also makes it significantly harder." The US provides a high quality institutional base and offers the ability to raise large amounts of capital, but a firm needs to generate at least US $100 million in annual revenue in order to be a good listing candidate and get adequate institutional coverage. In addition, the fragmentation and diversity of the South East Asian region makes it more challenging to grow a larger business compared to India or China. But Kredivo believes this will change, emphasized by Akshay's hope that "they can set a good example for more companies to list, because if you're able to do it, it sets a very high quality bar for the company's audit, regulatory, and compliance practices." FinAccel Leading the Pack in Indonesia FinAccel has seen great success in Indonesian markets and has the highest coverage in the market with eight out of the top ten Indonesian merchants in partnerships. They are able to help these businesses increase sales, and at the same time add tremendous value to their own customer base of approximately 4 million individuals as of 2021 through access to credit, with some of the lowest interest rates in the country. E-commerce is a very high growth industry, expected to reach US $100 billion GMV by 2025. FinAccel has been growing at 3x the e-commerce market growth rate, about 200% over the last few years. With only 8 million credit card holders in Indonesia, Kredivo is able to fill a gap and serve a need to provide customers with low cost credit and help spread the value of their purchases over time, from 30 days to 12 months. Kredivo's Consolidated Business Development Plan in Indonesia and Future Plans Kredivo's goal is to responsibly provide fast, affordable, and widely accessible credit to millions of Indonesians. The company is one of the lowest cost credit providers outside of a credit card in the country today. They are looking into "education, loans, motorcycle loans, digital banking, and more" but potentially looking at expansion further down the line, as it is too early to comment at this time. But Akshay expresses hope that they will serve 15 to 20 million customers in Indonesia in the future. "We're very excited about the future," said Akshay; "I think, as you're aware, given our public announcements, we are the clear leader in a very fast growing Buy Now Pay Later space. We intend to consolidate our position there and are also very keen to expand our Buy Now Pay Later business across the region, since there are other countries, such as Vietnam, Philippines, Thailand, that also suffer from, to varying degrees, the lack of credit access that we actually see in Indonesia today." "Square, which is among the largest payment companies in the United States, bought Afterpay, which is one of the global leaders in the Buy Now Pay Later space, it was a US $30 billion acquisition. So you can clearly see the value that the Buy Now Pay Later providers are actually providing today." "But at the end of the day, we're still a relatively small company within Indonesia's trillion dollar economy. We believe that credit is very important and drives economic growth anywhere in the world. Savings does not, credit does. Savings translates into credit. That's what translates into economic growth. And there is a very, very large need in Indonesia for more credit in the ecosystem to drive more and more economic growth." Indonesia is one of the countries ranked at the bottom of the credit access index, making it significantly harder for corporations, SMEs, or individuals to get credit. Many other companies alongside Kredivo are working to make this process easier by using technology to score these individuals and collect data more efficiently, and Kredivo is now generating credit metrics that are in line with the unsecured consumer credit portfolios of the top five or top 10 banks in the country. "So our view is that we and other companies that are providing credit to society are really helping drive Indonesia's economic growth," said Akshay; "and that's really the way in which we think we're helping the country and society in general." About Kredivo Kredivo is the leading digital credit platform in Indonesia that gives customers instant credit financing for ecommerce and offline purchases, and personal loans, based on real-time decisioning. Kredivo users can buy now and pay later with one of the lowest interest rates amongst digital credit providers in the country. Kredivo's merchant partners benefit from instant point-of-sale financing, powered by its unique 2-click checkout. Kredivo is operated by FinAccel, a Singapore-headquartered financial technology company, with a mission to make financial services fast, affordable and accessible. FinAccel is backed by leading investors such as Mirae Asset, Naver, Square Peg Capital, Telkom Indonesia and Jungle Ventures, among others. Kredivo is supervised by OJK's multi-finance division in Indonesia. To know more about FinAccel and Kredivo, visit www.finaccel.co and www.kredivo.com . Media Contact: