How Kelvin Teo Co- Founder Of Funding Societies | Modalku Raised $60 M To Build Southeast Asia’s Largest Peer-To-Peer Lending Platform?

Kelvin Teo is the co-founder of Funding Societies | Modalku. Selected as Top 200 FinTech Influencers in Asia and appointed Co-Chairperson for the Marketplace Lending Committee of Singapore FinTech Association, Kelvin has spoken at major conferences such as LendIt Shanghai, Boao Hainan and Money20/20. He has also been featured on Bloomberg and the Business Times. Prior to this, Kelvin was a consulting professional at KKR, McKinsey, and Accenture. He graduated from Harvard Business School and the National University of Singapore.

In an exclusive interview with AsiaTechDaily ,Kelvin says:

Funding Societies exists to uplift Southeast Asia by empowering 1m SMEs. I’ve been very fortunate in life, so it is only right for me to pay it forward. The motivation is summed up by Nobel laureates Albert Einstein and Albert Schwitzer, respectively. “Only a life lived for others is a life worthwhile.” “Life becomes harder for us when we live for others, but it also becomes richer and happier.”

As a young professional, I’d have taken more risks in my personal life and career. After a structured education, there is a tendency to do what others tell us to do. “Don’t ask yourself what the world needs, ask yourself what makes you come alive, and then go and do that. Because what the world needs is people who have come alive.“

Read on to know more about Kelvin Teo and his journey.

Please tell me about your personal background, and What motivated you to get started with your company?

Kelvin Teo: I’ve been fortunate in life. Growing up at Senai Malaysia, I received the ASEAN scholarship from Singapore, graduated valedictorian in NUS, and made it into consulting at Accenture, McKinsey, and KKR (Capstone), before going to Harvard Business School. My co-founder Reynold Wijaya and I are grateful for the opportunities and wanted to pay it forward. We started up because SME financing is a big problem to solve in Southeast Asia. We are also passionate about SMEs, and we believe there is a path for us to be No. 1. Hence we called ourselves Funding Societies.

What is your current main product, and can you share any previous product pivot story to the current product?

Kelvin Teo: As a two-sided platform, we offer a wide range of alternative financing solutions for SMEs to grow and alternative investment options for individual and institutional investors to earn a return. We specialize in all forms of short-term financing, fast and flexible, complementing banks. Silicon Valley advocates focus on one product and make it 10x better. However, as SME financing is a fragmented and localized business, we believe it’s crucial to broaden our offering to meet SMEs’ needs.

How much money have you raised in total so far? When was the recent funding round?

Kelvin Teo: We’ve raised $60M to date from prominent investors such as Sequoia Capital India, Softbank Ventures Asia, Qualgro, Golden Gate Ventures, and SGInnovate. Our most recent funding round was right before COVID-19, with US$40m+ committed.

How have you attracted users, and with what strategy have you grown your company from the start to now?

Kelvin Teo: Since our launch in 2015, we’ve become the largest licensed SME digital financing platform in Southeast Asia, and It has given out more than $1.5B loans to tens of thousands of SMEs. We’ve taken an omnichannel and one-stop-shop approach to serving SMEs and investors, enabling us to scale faster.

Which has been the best marketing software tool for the growth of your startup, and why?

Kelvin Teo: We’re using numerous tools, and each is good for different purposes and at different stages of the company. For a startup, the idea is to use something which is low cost and does the job instead of an expensive, fully loaded software with many features that we will rarely use. It will be hard to pinpoint the best marketing software tool. Nonetheless, we use Facebook analytics and Mixpanel extensively for our marketing analytics.

What do most startups get wrong about marketing in general?

Kelvin Teo: I wouldn’t say other startups have gotten it wrong. But for B2B startups, I believe we can be more obsessed and scientific with the impact of marketing. It isn’t about how many events we did or impressions we received, but the final conversion.

What were the internal decision processes in determining when to begin fundraising, and what were the logistics for this? And how many investors have you met so far, and how did you meet these investors and which channels worked best for you?

Kelvin Teo: After Series B in April 2018, we decided to fundraise early in mid-2019, albeit we weren’t fully prepared, as we expected 2020 to be tough. We prepared our teaser, pitch deck, and data room, then hit the road, thanks to significant inbound interests. We didn’t expect 2020 to be COVID-19 tough and are lucky to have made it in time.

What are the biggest challenges and obstacles that you have faced in the process of fundraising? If you had to start over, what would you do differently?

Kelvin Teo: WeWork and COVID-19 have dramatically altered the fundraising environment. The focus of capital markets shifted from growth to profitability in a flash. While we had expected it in early 2019, I believe we could have executed profitable growth faster and better. We were fortunate to have still fundraised, but many were not as fortunate.

What are your milestones for the next round? And what are your goals for the future?

Kelvin Teo: We have two milestones. Firstly, it’s to secure the digital wholesale bank license this year in Singapore as a consortium with AMTD, Xiaomi, and SP Group. Secondly, it’s to become profitable as a FinTech firm. We shall continuously evolve as a business to serve SMEs and investors in Southeast Asia better.

How do you plan to expand globally?

Kelvin Teo: We don’t plan to expand globally. Our focus is Southeast Asia, where we are passionate and undisputedly No. 1, with a huge underserved market. We launched in Singapore, Indonesia, and Malaysia in 2015 through 2017, investing 2 years to consolidate our position. We’re soon ready to enter new markets in Southeast Asia.

What are the most common mistakes companies make with global expansion?

Kelvin Teo: Premature expansion. As Southeast Asia is a fragmented market, there is often the pressure to expand overseas. Yet many firms underestimate the complexity, resources, and management attention required, at times, to the detriment of current business. Firms should still expand, but after counting and preparing for the cost.

How do you handle this COVID-19 outbreak situation for your company’s survival in the future?

Kelvin Teo: COVID-19 was a sudden and unprecedented crisis. In the words of Singapore’s Minister for Law and Home Affairs, K. Shanmugam, “none of us in our lifetime have encountered an economic shock like this.” We spoke with experts, identified the key risks, mitigated them, monitored the situation, and used this crisis as an opportunity. It was hard, and I am grateful for the conviction of many. While COVID-19 is not over, it has made us stronger and maybe a blessing in disguise.

What are the most common mistakes founders make when they start a company?

Kelvin Teo: I believe the most common mistake is chasing valuation and attaching our sense of self-worth to it. Valuation is a one-way street; driving up is hard, but reversing down is harder. Obviously, there are many differences between a unicorn and early-stage founder, including financial status, but self-worth should not be one of them.

What’s the best advice you’ve ever received? And What advice do you have for someone who is interested in doing similar things like yours or in a similar direction?

Kelvin Teo: Perhaps the best advice that I heard was from Sam Altman, former president of Y Combinator, which I would also like to share with others. Paraphrasing Sam, the job of starting a company is such an intense, hard job. The only people who should start a company are people who can’t (are dying to) start companies.

What are the top-three books or movies (TV series) that changed your life and why?

Kelvin Teo: “You are the books that you read and people you meet,” so I am still a work-in-progress. I admire the ambition, honor, and determination in the Romance of Three Kingdoms, which I have read/ watched for a dozen times. The Pursuit of Happyness (2007) prompted me to leave home at 15 for Singapore. And the Bible gives me faith, peace, and wisdom in difficult times.

How do you keep yourself motivated every day?

Kelvin Teo: Funding Societies exists to uplift Southeast Asia by empowering 1m SMEs. I’ve been very fortunate in life, so it is only right for me to pay it forward. The motivation is summed up by Nobel laureates Albert Einstein and Albert Schwitzer, respectively. “Only a life lived for others is a life worthwhile.” “Life becomes harder for us when we live for others, but it also becomes richer and happier.”

What are the one or two things that you would do differently to improve your life if you could go back to 10 years ago?

Kelvin Teo: As a young professional, I’d have taken more risks in my personal life and career. After a structured education, there is a tendency to do what others tell us to do. “Don’t ask yourself what the world needs, ask yourself what makes you come alive, and then go and do that. Because what the world needs is people who have come alive.”

You can follow Kelvin Teo here.

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