Gluwa recently announced its new investment partnership with the Singapore-based lending firm, Jenfi. I spoke with Jeffrey Liu, the CEO of Jenfi, to help understand what Jenfi’s business model is, and what exactly makes them such an exciting investment partner for Gluwa Capital…
The Business Idea
The idea behind the company was rooted in Jeffrey’s own experience setting up new businesses in Asia, most recently GuavaPass, a fitness subscription service that ended up scaling to twelve different countries across Asia and the Middle East. However, as Jeffrey points out to me:
“One of the biggest challenges that we had was access to capital. In particular, we were spending a lot on Facebook ads to acquire customers, but we felt like we were constantly capital constrained and didn't have enough capital to run our marketing efficiently. And that was a big pain point that we faced over the years”
Indeed, perhaps the greatest obstacle facing Small to Medium Enterprises (SMEs) around the world is the lack of growth-capital. This experience inspired Jeffrey to start a new business. A business designed to tackle the lack of growth-capital available to smaller businesses. Meet Jenfi, an online lending platform who provide growth-financing to rapidly growing business around Asia.
The Business Model - Flexibility, Speed and Data
“Companies come to Jenfi and apply for growth financing. We only fund productive growth activities, this includes digital marketing like your Facebook ads… it could be inventory for e-commerce, basically anything that drives sales are things that we directly provide funding towards.”
And Jenfi also have a unique solution for controlling and monitoring how their capital is spent. Jenfi customers receive their growth capital in the form of a Jenfi virtual wallet and Jenfi Mastercard. This ensures that any funds lent to these companies are closely controlled, and only spent on the growth initiatives that Jenfi have identified.
Jenfi also offer their customers a far more flexible approach to financing than traditional banks or lending institutions. To put it simply, Jenfi ties the repayment schedule to the performance of the business, charging a percentage of that business’ future sales. When business' do well, they pay back the money faster. As Jeffrey explains:
“By creating this dynamic model we’re aligning ourselves better with the actual cash flows of business. It's such a big difference from traditional loans where it’s very static with a rigid payment schedule and a lot of times there's no flexibility.”
This unique repayment model doesn’t just provide flexibility to businesses, it also benefits Jenfi. When businesses use the growth-capital effectively to increase their revenue, they also pay back Jenfi faster than they would a traditional fixed-rate loan. This accelerates the loan-cycle, giving Jenfi the opportunity to redeploy their capital into profitable ventures faster than their traditional lending competitors.
“It’s a win-win because they achieve their growth goals faster than expected, and so they reach their milestones faster, and we end up getting our capital back sooner.”
Not only does Jenfi provide a more business-oriented loan product, they are also far more nimble than their traditional competitors. Traditional loans take several weeks to process. In contrast, Jenfi’s semi-automated platform provides speed and certainty to its customers. As Jeffrey explains, risk assessment is largely determined through data analysis of any potential customers' business figures. Companies simply set up an online account and…
“Connect their payment processor data, like their Stripe/strike and Braintree data, they can connect their accounting data like their Clear Books online, their merchants account if they're using Shopify for example, and their Facebook and Google data. So literally within a few clicks they're completely connected to our system. We’re able to quickly risk assess based on that data we are evaluating, and give them a real-time decision on whether they qualify for different types of growth financing. Theoretically they can get financing as quickly as same-day if they have everything ready to go.”
But Jenfi understand that business don't just need growth-capital, they also need to be able spend it efficiently. To this end, Jenfi are planning to expand their services in the near future, providing strategic decision-making help to their customers. Using the data provided by companies, they plan to offer an analytics platform which provides active business recommendations, for example, to spend more money on Facebook advertisements.
By providing a full suite of services to business customers, focused on quick risk assessment, flexible financing, and finally, a suite of data analytics tools to help grow their businesses, Jenfi is well-positioned to become a major disruptor in Asia’s SME lending market. Currently, Jenfi has provided over 150 loans to these businesses, deployed several million in capital and has plans to set-up regional bases around Asia.
What’s not to love?
Gluwa Capital is extremely excited to invest in such an innovative Fintech company. Even more so, we are privileged to offer our customers the opportunity to invest in Jenfi, as well as other Fintech companies, through our Gluwa Capital Savings and Investment products. We look forward to our continued business partnership over the coming years.
We will be releasing more excerpts from the interview soon, so keep your eyes peeled!