Many Southeast Asian digital businesses run into obstacles when seeking early-stage growth financing. They might not want to sell equity in their company, but often struggle to secure working capital loans from traditional financial institutions. That’s where Singapore-based Jenfi comes in, providing revenue-based financing of up to $500,000 with flexible repayment plans that co-founder and chief executive officer Jeffrey Liu refers to as “growth capital as a product.”
While revenue-based financing is gaining traction in many other markets, Liu told ProWellTech that Singapore-based Jenfi is the first company of its kind focused on Southeast Asia. The startup announced today that it has raised a $6.3 million Series A led by Monk’s Hill Ventures. Participants included Korean Investment Partners and Golden Equator Capital, 8VC, ICU Ventures and Taurus Ventures. The company previously raised $25 million in debt financing from San Francisco-based Arc Labs.
Jenfi works primarily with “digital-native” companies, including SaaS providers and e-commerce sellers. Some of its clients include Tier One Entertainment, Pay With Split and Homebase. Jenfi hasn’t disclosed how much non-dilutive financing it’s provided so far, but its goal is to deploy $15 million by July 2022. It claims that the average Jenfi customer experienced compounded sales growth of about 26.5% over three months, 60% over six months and 156% over twelve months.
The aggregate sales of companies in its portfolio is currently more than $30 million, and Jenfi expects that the capital it has already deployed will help them generate $47 million in sales, or a 156% increase by July 2021.
Liu launched Jenfi with Justin Louie in 2019, after seeing how traditional financial institutions were lagging behind Southeast Asia’s digital boom. The two previously founded GuavaPass, the fitness studio membership platform that was acquired by ClassPass in 2019. Jenfi’s creation was motivated by some of the challenges Liu and Louie faced while financing a high-growth startup focused on Asian markets.
Jenfi’s application process is completely online and in some cases, companies have received financing in less than 24 hours, though it typically takes a few days. This is another benefit over traditional working capital loans or private equity financing, which can take months to complete, making it difficult for companies to respond quickly to revenue growth opportunities. For example, an e-commerce company may need quick working capital to purchase more inventory if it suddenly gets a lot of demand for a certain product.
Some of Jenfi’s Series A will also be used to develop more integrations for its proprietary risk assessment engine, which analyzes how efficiently companies use their growth spending. Currently, it can tap into information from bank accounts; software like Xero or Quickbooks; payment gateways including Stripe and Braintree; e-commerce platforms like Shopify, Shopee and Lazada; and Facebook Ads and Google Ads.
Instead of fixed installment repayment plans, Jenfi gives companies more flexible target repayment plans and charges them a flat fee based on the amount of financing they received, their monthly sales and how many months it will take to pay back the loan. Jenfi continues analyzing the data sources provided by companies, so it can tell if a client potentially needs more capital or an adjustment to their repayment terms.
Ultimately, Jenfi’s plan to move beyond financing and also provide tools to help businesses. “We see ourselves as partners in our portfolio companies’ growth,” said Liu.
Since Jenfi taps into a mix of data sources—including bank accounts, accounting software and digital advertising platforms, it can use that same information to identify opportunities. Part of Jenfi’s Series A funding will be used to develop automated analytics. For example, the platform would be able to identify an advertising opportunity with high ROI on Google Ads and notify the company, asking if they want to apply for more capital to finance the campaign.