Earlier today, Jakarta-based digital mortgage platform IDEAL announced that it raised a US$3.8 million pre-seed funding round co-led by AC Ventures and Alpha JWC. The startup will use the capital injection to focus on product development, hiring, and expanding its offerings.
According to research from Bank Indonesia in 2021, the local mortgage industry is valued at US$39 billion with a projected 17% CAGR over the next five years. Gen Y and Gen Z – also known as the tech-savvy generations – will dominate the working population in the next ten years. They are set to become the primary audience in the home-ownership sector.
Currently, 75% of home purchases in Indonesia are carried out through mortgages, but the majority of applicants do not fully understand how the process works. Meanwhile, lenders and borrowers alike must routinely cope with challenges like the manual and messy process of document submissions, questionable data security, a lack of transparency in rates, and more.
To address these pain points, IDEAL provides a digital solution to streamline the process and improve the mortgage experience for Indonesia’s homebuyers. While the current mortgage paradigm is largely dependent on property agent suggestions, IDEAL gives control back to the buyer, so they may select the best available mortgage product on the market.
On its platform, IDEAL helps users calculate the costs and installments in detail so they can choose the best options that fit their needs and situations. IDEAL’s platform also provides a direct application system where users can apply to multiple banks with one set of data and a real-time tracking system to monitor the process. In addition to process efficiency and increased clarity, IDEAL also offers a secure digital system that minimizes human error and data leaks that often occur during the usual paper-based or messaging-app-based mortgage process.
IDEAL’s business model enables the startup to generate revenue through commissions from banks and property developers for every successful loan application through the platform. So far, IDEAL has partnered with five major banks – including CIMB Niaga, OCBC NISP, and Maybank – as well as Indonesia’s largest property developers: Sinar Mas Land, Ciputra Group, and Agung Sedayu Group.
Currently, the firm is focused on the primary housing market, but IDEAL will soon expand to secondary housing and mortgage refinancing/take-over products. It will launch a dashboard to help users monitor and manage their mortgages. The team also plans to expand into other big-ticket consumer loans, with a long-term vision of penetrating new markets in ASEAN.
IDEAL’s core management team brings strong track records to the table. The company was originally founded by Albert Surjaudaja, Ian Daniel Santoso, and Indira Nur Shadrina; with Jeganathan Sethu, who later joined in 2022 as part of the founding team.
The firm’s co-founder and CEO Albert is the former head of operations strategy at OVO. He had a stint as a senior consultant at Accenture UK and earned a master’s degree from Imperial College London.
Ian is IDEAL’s co-founder and president. He is a serial entrepreneur and angel investor with experience managing family-owned real estate projects prior to joining IDEAL. He graduated with a BA in economics from Boston College.
Indira is IDEAL’s co-founder and CCO. She is the former head of strategic partnerships at OVO and previously served as an equity investment analyst at BNP Paribas Asset Management. She held key roles in business development (corporate finance and M&A) at Emtek and CT Corp and earned a BA in economics and business (finance) from Universitas Indonesia.
Jeganathan is IDEAL’s co-founder and CTO. He is the former co-founder and CTO at goKampus. Prior to that, he was the CTO at Principia, a leading investment firm in Indonesia. He earned a master’s degree from IPMI International Business School.
“IDEAL is special because we put the consumer’s mind and heart first in making any product development decisions,” explained Albert. “That said, we also come with an extensive network in both the banking and the property development spaces. We believe that our investors share the same vision with us, which is to help Indonesians achieve their IDEAL life, starting with digitizing the mortgage process.”
Ian echoed this sentiment, saying, “We also feel that the industry expertise, network, and track record of our investors will be one of the keys to our success moving forward. Onboarding two of the biggest developers in Indonesia as our investors will also be very meaningful to IDEAL’s long-term business.”
“Our product is built from in-depth user surveys and extensive discussions with industry players, with a clear vision of what solutions are needed in the current landscape,” added Indira. “ On top of that, we believe we have a distinguished team to execute the idea, with relevant backgrounds and expertise.”
An ideal time
“Indonesia’s mortgage penetration is currently at 3% of local GDP. This is low compared to Malaysia and Singapore, which are at 30% or higher. This presents a US$30 billion opportunity if Indonesia can double its mortgage penetration to 6% via improved financial access,” explained founder and managing partner at AC Ventures Adrian Li. “IDEAL’s strong-suited team identified a bottleneck in the mortgage industry and brought domain expertise in fintech and real estate to build a one-stop shop for mortgages in Indonesia. IDEAL works with banks’ API connections and streams together data-gathering and applicant processes to increase the mortgage success rate.”
“Purchasing a house, especially one’s first, is getting harder for Indonesia’s next generation. Rising prices aside, less financially literate customers are also faced with challenging procedures when it comes to mortgage options, applications, and hidden fees. With its technology, we believe IDEAL can democratize mortgage products and bridge financial solutions with a whole new generation of homebuyers,” says Eko Kurniadi, partner at Alpha JWC Ventures.
“We have witnessed that the average age of first-time home owners is getting younger and younger. This is the segment where financing decisions are as important as buying decisions. At Sinar Mas Land, we are integrating the home buying experience with financing options. Through IDEAL, we are able to offer such packages. With our strategic collaboration with IDEAL, we hope together we can offer a seamless experience of mortgage application to our customers and draw people to realize their dream home,” added Michael Widjaja, Group Chief Executive Officer of Sinar Mas Land.
Helping first-timers navigate
With a strong core management team that comes with extensive experience in technology and finance, IDEAL is an Indonesia-based digital mortgage platform that addresses and streamlines a variety of pain points in the traditional home buying process. Currently focusing on the Greater Jakarta area, to date, the startup has partnered with three of the nation’s major property developers and onboarded five major banks as lenders. IDEAL helps young, first-time homebuyers navigate the mortgage process with ease and clarity.
AC Ventures is a leading Southeast Asian venture capital firm investing in early-stage startups focused on Indonesia and ASEAN. The firm’s mission is to partner with and empower entrepreneurs with more than capital. AC Ventures combines operational experience, industry knowledge, deep local networks, and resources to create value. Its vision is to be a generational partner to founders driving positive societal change and economic impact in Indonesia and beyond.
The venture firm currently has more than US$380M in assets under management, invested across four funds. Since 2012, the firm’s Partners have invested in more than 100 technology companies in the region, including some of the most iconic names in the ASEAN digital ecosystem. AC Ventures’ Founding Partners Adrian Li, Michael Soerijadji, and Pandu Sjahrir lead a team of over 25 professionals with offices in Jakarta and Singapore.
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AC Ventures is a leading venture capital firm investing in early-stage startups focused on Southeast Asia. We are a generational partner to founders driving positive societal change and economic impact in Indonesia and beyond.