TwoHarvardStudentsAreChanging

LendinginSoutheastAsia
ChanyapornChanjaroen

GraceHuang

xunxun365
April6,20165:00PMEDT
UpdatedonApril7,20164:56AMEDT

ReynoldWijaya,left,andKelvinTeo,cofoundersofFunding
Societies.
Photographer:ScottEisen/Bloomberg

Businessschoolprojectattractsventurecapital,partnerships
`Ihavetolearnfromthem,'saysbankchiefinSoutheastAsia
KelvinTeo,aHarvardBusinessSchoolstudentbuildingaWebbasedpeertopeerlendingstartupaspartof
hiscurriculum,pitchedtheprojecttoapotentialpartner:DBSGroupHoldingsLtd.,SoutheastAsias
biggestbank.Omittinghisstudentstatus,heemailedtheproposallastOctobertoChiefExecutiveOfficer
PiyushGuptaoutoftheblue.
AtDBSsSingaporeheadquarters,theCEOreceivedthemessage.Guptahadbeenseekingwaystoharness
theInternettoimprovebankingservicesandTeosventure,FundingSocieties,mightwork.Threehours
later,theexecutivesenthisreply:interested.
Today,Teo,29,andhisclassmateandFundingSocietiescofounder,ReynoldWijaya,27,aresevenweeks
fromgraduationatHarvardinBoston.TheyalsohavedealssignedorpendingwithDBSandother

SoutheastAsiabankstocollaboratewiththeirstartup,whichconnectsinvestorswithborrowersfromsmall
andmediumsizebusinesses.
Theirsuccessasentrepreneurs,whilestillenrolledinthetopU.S.MBAprogram,showshowbanksinAsia
areeagertojoinwithfinancialtechnologyfirmsratherthangetbeatbythem.Inaglobalsurveyoffinancial
servicesexecutivesbyPricewaterhouseCoopers,95percentofbankerssaidpartoftheirbusinessmightbe
losttofintechcompanies.

GrimWarning
Thedisruptionofthefinancialsectorisclearlyunderway,theNewYorkbasedconsultingfirmsaidlast
monthinareport.Giventhespeedoftechnologydevelopment,incumbentscannotaffordtoignore
fintech.Formingpartnershipswithinnovatorsistheleadingresponsebybanks,thefirmsaid.
TeoandWijayaarecapitalizingonthis,aswellastheirtiestoSoutheastAsia.Theyareamongwhatthey
estimateasthe15studentsintheirHarvardBusinessSchoolclasswhocomefromtheregion.Whilefintech
isboominginChina,itlagsinSoutheastAsia.Wijayasaysbasicfinancingforsmalltomediumsize
businessesislackinginnationssuchasIndonesia,hishome.
SMEshavealotofpotentialandhelpingthemwillalsohelpthecountry,hesaid.

FinancialsectorsseendisruptedbyfintechsinPwCsurvey.

WhenaccountingcompanyKPMGandSydneybasedinvestmentfirmH2Venturesrankedthetop100
fintechstartupslastyear,eightChinesefirmsmadethelist,whichwasledbyShanghaibasedZhongAn
OnlineP&CInsurance.ThereweretwofromSoutheastAsia.

AttractingCapital
Travelingtotheregionduringschoolbreaks,thestudentsraised$1.2millionfromventurecapitalistsin
SingaporeandJakartatobacktheirproject,whichalsowillearnthemacademiccredit.Theypooledanother

$400,000ontheirown.
Theirbiggestinvestor,IndonesiabasedAlphaJWCVentures,becameinterestedafteritsmanagingpartner
andcofounder,WillOngkowidjaja,learnedaboutFundingSocietiesthroughanetworkofformer
McKinsey&Co.employees.HeusedtoworkinJakartafortheNewYorkbasedmanagementconsulting
firmandTeoisaformeranalystinthecompanysSingaporeoffice.
Theguysarereallyaggressiveandtheirexecutionisveryquick,Ongkowidjajasaid.Theyarevery
focusedondoingtherightthingandhavingsocialimpact.
FreenyanLiwang,presidentdirectoratPTBankSinarmas,theJakartabasedlendercontrolledby
billionaireEkaTjiptaWidjaja,alsoheardaboutthestartupandsoughtouttheentrepreneurs.InFebruary,
thebankbecameescrowagentforthefirmwhileitweighscloserties.

GenerationGap
Wearenowintoadigitaleraandalltheseyoungpeoplecanmakeithappen,Liwangsaid.Iam50
somethingIhavetolearnfromthem.
ThestudentsbeganworkingonFundingSocietiesinatinyroomoffoneofthetunnelsbetweenbuildings
oncampus.Theyoftendebatedstrategyuntilmidnight.
ThecompanyopenedanofficeinSingaporelastMayandinJanuaryasecondlocationinJakarta.There,it
operatesunderthenameModalku,meaningmycapitalinBahasaIndonesia,thelocallanguage.

DoingBusiness
Thestartup,nowwith39employees,hasarrangedS$5.5million($4.1million)inloans,Teosaid.Funding
Societieschargesa3percentto4percentoriginationfeetoborrowersandkeeps1percentofrepaymentsto
investors.Thestudentshaventdrawnasalary.Beforegraduationnextmonth,apartnershipwithDBSmay
comethrough.
Weexpecttosharedetailssoon,GraceNgoh,aspokeswomanforthelender,saidinanemail.
Lastyear,KualaLumpurbasedMalayanBankingBhd.namedFundingSocietiesafinalistinafintech
competition.
TeoandWijayaarebeneficiariesofHarvardBusinessSchoolsrecentemphasisonentrepreneurship.Since
2011,studentsarerequiredtotakeayearlongcoursecalledField,anacronymofFieldImmersion

ExperiencesforLeadershipDevelopment.Enrolleesmustcreateabusinessaroundanewproductorservice
aimedataninternationalpartner.FundingSocietiesisanindependentprojectunderfacultysupervision.

PersonalHistory
ItwasatanassignedgroupdinnerduringtheirfirstweekatHarvardthatTeoandWijayametinthe2014
fallterm.Theyimmediatelyconnected.TeoisfromSenai,Malaysiahismotherisaretiredschoolteacher
andfatheraformermanageratapalmplantationcompany.WijayasparentsbuiltJakartabasedPTUnited
FamilyFoodintoamultinationalwithmorethan4,000employees.
PriortoHarvard,TeograduatedinaccountingfromNationalUniversityofSingapore,workedinthecityat
McKinseyandlaterasananalystforNewYorkbasedbuyoutfirmKKR&Co.Wijaya,anengineering
graduatefromtheUniversityofMichiganinAnnArbor,joinedhisfamilyscompany.
Theyarethenewgenerationofsocialentrepreneurs,saidJayK.Rosengard,anadjunctlecturerat
HarvardUniversitysJohnF.KennedySchoolofGovernment,inCambridge,Massachusetts,oneofthe
studentsmentors.Theyunderstandtheneedtobeprofitablethemselves,whilealsohelpingother
SoutheastAsianbusinessestosucceed.
Thefactthattheywanttogobacktocontribute,itswonderful,hesaid.
(Anearlierversionofthisstorywascorrectedtodeleteareferencetoguessedemailaddressinthefirst
paragraph.)
Beforeit'shere,it'sontheBloombergTerminal.

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