Singapore-based B2B financing and payments infrastructure company CrediLinq.Ai is in the advanced stages of signing a strategic acquisition deal in Indonesia, its Founder and Group CEO Deep Singh said.
The discussions are at the board approval stage, Singh said in an interview with e27 shortly after announcing its seed extension round from investors, including MS&AD Ventures, Big Sky Capital, and 1982 Ventures, early last month.
“We have already engaged with a firm in Indonesia, and it is at the Board approval stage. We expect the transaction to be complete in the next two-three months,” Singh added without divulging details.
Furthermore, the embedded finance company is actively seeking acquisition opportunities in Singapore, particularly in the payments space. “We have identified some targets and will proceed to engage with them once we conclude the Indonesian transaction,” Singh shared.
Founded in January 2021 by Singh and Vikram Kotibhaskar (Co-Founder), CrediLinq provides embedded fintech solutions that enable one-click checkouts for B2B marketplaces, corporates, and fintech companies.
The company initially intended to provide SMEs with seamless access to affordable capital without the hassle of a traditional bank loan. As the idea progressed, the founders developed proprietary technology to provide this funding at B2B e-commerce platforms and marketplaces.
Currently, CrediLinq offers two embedded financial products:
B2B PayLater: This solution allows businesses to buy products, stock up their inventory and defer payment by 30 to 60 days. It enables suppliers to get paid instantly while the buyer conveniently repays the transaction amount and fees on the date they choose at checkout.
GMV financing: This solution allows sellers on B2B marketplaces to instantly collect payment for the goods they have successfully sold. They are charged a single upfront fee at the point of checkout.
The fintech startup has partnered with six platforms across e-commerce, payments and procurement in Singapore, Hong Kong, Australia, and Malaysia. It will soon enter Indonesia. CrediLinq is also discussing with potential customers in Malta, the UK, and Israel.
According to Singh, the future of global finance is embedded. As per a recent Research and Markets report, embedded finance was worth US$108.6 billion in 2022 and is expected to reach US$358 billion by 2029 at a 24.4 per cent CAGR. While it may be difficult to fathom the potential of embedded finance in Asia, a closer look at the ground level immediately highlights the proponents of this growth.
“For starters, the 2017 SME Finance Forum study highlighted how SMEs worldwide suffer from a US$5.2 trillion financing gap yearly. Around 58 per cent of these businesses operate out of Asia. This highlights how wide the SME finance gap in Asia truly is,” he said.
A recent market study by Mordor Intelligence also highlighted how B2B e-commerce in Asia is experiencing a steady growth of 15.2 per cent CAGR. This shift to businesses and customers transacting online and a rapidly increasing internet penetration are why embedded finance in Asia is estimated to become a US$358-billion market by 2029.
“This trend can also be witnessed on the global stage, as more businesses worldwide continue their shift from offline to online processes,” Singh added. “As a company, we acknowledge this potential, and thus we are pioneering embedded finance for Asia and beyond.”
Speaking of the trends in embedded finance, he said integrating finance for businesses is one of the most significant trends. Globally, multiple companies are pioneering the bespoke integration of financial services on a traditional non-financial platform for businesses.
“So current global trend in embedded finance globally and in Asia is to design and integrate bespoke financial solutions for businesses, such that they too can reap the benefits of an embedded financial experience, which was only previously restricted to end consumers.”
Singh also opined that embedded finance would force traditional banks to change. While banks have woken up to the potential of embedded finance, most traditional institutions still need to start experimenting with this technology.
For instance, in Asia, only Standard Chartered is trialling an embedded finance experience for its customers by following a BaaS (banking as a service) model. Although the potential of this technology is well known, most traditional institutions are unwilling to integrate this offering as it deters them from their age-old approach.
“From our perspective, embedded finance arrives with the promise of bringing all stakeholders together on a level playing field. However, unfortunately, there is still some resistance from traditional institutions to arrive at this juncture,” he said. “If banks and other traditional institutions fail to embrace the embedded finance wave, it can become an existential threat to them. As a recent Accenture study rightly highlighted, if banks do nothing, embedded finance can claim up to US$32 billion in SME banking revenue by 2025.”
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Written by: Sainul Abudheen K, Editor at e27
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