Indonesia’s Fairbanc raises $4.8m to scale B2B BNPL to unbanked merchants

Fairbanc, the Indonesian and Silicon Valley based technology platform that enables B2B Buy Now Pay Later (BNPL) for micro-businesses in Indonesia just secured $4.8M in pre-A note led by Vertex Ventures Southeast Asia and India.

Indonesian conglomerate Lippo Companies, Asian Development Bank (ADB), and Accion Venture Lab (AVL) also participated in this round. This new financial backing comes on the heels of recent investments from the likes of 500 Startups, ADB, AVL East Venture, and Oak Drive Venture.

Fairbanc platform enables Indonesian MSMEs to purchase inventory on BNPL credit in partnership with large consumer brands like Unilever who has hundreds of thousands of merchants in the ecosystem. Its fully integrated B2B BNPL offers frictionless credit to the unbanked merchants without requiring smartphones, or digital literacy.

“We are pleased to back Fairbanc and are impressed with their rapid growth. Within less than 12 months, Fairbanc has forged partnerships with many major multinational consumer brands with very large merchant ecosystems such as Unilever, Nestle, Coca Cola and Danone.

They have already on-boarded over 350,000 merchants, of which 75,000 merchants are already purchasing inventories on BNPL. We are looking forward to supporting them on their next phase of accelerated expansion in Indonesia.”, shares Gary Khoeng, Partner at Vertex Ventures Southeast Asia.

According to a survey conducted by Unilever, 80% of the Fairbanc’s beneficiaries are unbanked and around 70% are women merchants who increased their sales by an average of 35% – thanks to data-driven BNPL enabled by Fairbanc’s technology.

Founded in 2019 by Mir Haque, Fairbanc was first piloted in Bangladesh with Unilever before it was rolled out in Indonesia with Unilever as well in 2021.

Mir, a Wharton MBA graduate who previously worked for many of the well-known global companies including Google, Adobe, McKinsey, and Deutsche Bank, was recently shortlisted for the Cannes Lions Awards for Sustainable Development.

Fairbanc’s founding team includes many FinTech veterans like the former CTO of Kiva, a San Francisco based microcredit platform that operates in 77 countries and disbursed $1.4 billion in microloans, and Thomas Schumacher who co-founded California based emerging market microloan giant Tala that recently closed a funding round at $800 million valuation.

Where banks saw risk, Fairbanc saw an opportunity.

“The speed and size of the micro-merchant transactions make it challenging for banks to service this segment because their transactions tend to be small and largely not traced,” Khailee Ng, the managing partner of 500 Startups.

With its new funds, Fairbanc plans to make a bigger push into Indonesia, a country that hosts the fourth largest unbanked population globally, with 95 million adults still lacking a banking account at a financial institution.