Startups

Indonesia’s IDEAL takes the pain out of applying for mortgages

Comment

Jakarta
Image Credits: @DidierMarti (opens in a new window) / Getty Images

Applying for mortgages is often a time-consuming and disorganized process, with reams of manual paperwork required. Based in Jakarta, IDEAL simplifies the process with a platform that lets users compare mortgage products and apply for them from multiple banks at the same time. The startup announced today it has raised $3.8 million in pre-seed funding led by AC Venture and Alpha JWC, with participation from Living Lab Ventures and Ciputra Group.

The funding will be used for product development, hiring and expanding its products. IDEAL eventually plans to add other major lending products and expand into more Southeast Asian countries.

Started last year, IDEAL’s founding team includes Albert Surjaudaja, Ian Daniel Santoso and Indira Nur Shadrina, with Jeganathan Sethu joining this year. Before launching IDEAL, Surjaudaja was former head of operations strategy at digital payment service OVO.

IDEAL founders Albert Surjaudaja, Indira Nur Shadrina and Ian Daniel Santoso
IDEAL founders Albert Surjaudaja, Indira Nur Shadrina and Ian Daniel Santoso. Image Credits: IDEAL

Surjaudaja told TechCrunch that IDEAL was started “with the thinking that consumer lending in Indonesia is broken.”

“Used responsibly, credit is a vital part in fueling the growth of economies. It acts as a multiplier effect in generating value,” he added. “With that in mind, Indonesia has one of the lowest credit-to-GDP ratios in the region, signifying that there is a lot of economic value potential that can be unlocked. There are a number of reasons for this, but one key reason is the absence of good, accessible options when it comes to lending products.”

Surjaudaja said that traditional retail banks offer a relatively poor digital experience for their consumer lending products, making them less accessible. On the other end, there are P2P lending and BNPL startups, but their products are centered on smaller, more consumptive loans.

“We feel like there is a clear gap in the market, namely conventional, productive and larger ticket size consumer lending products offered on a user-friendly digital platform,” he said.

Surjaudaja says IDEAL chose mortgages as its first consumer lending product because of its market potential, citing 2021 research from Bank Indonesia that says the country’s mortgage industry is valued at $39 billion, with a projected 17% CAGR over the next five years. Gen Z and Gen Y are set to become the primary audience in the home ownership sector.

Indonesia’s mortgage penetration rate is also just 3% of the local GDP, one of the lowest in Southeast Asia.

Surjaudaja added that the traditional mortgage process is very manual, highly fragmented and takes a lot of time and effort from customers.

For example, most people lack information about how the mortgage process works, making it confusing. The document submission process is also manual and unstandardized with multiple parties involved and documents with sensitive information handled without security. Surjaudaja said consumers suffer from lack of transparency in rates and availability of different options, and an opaque application process that means they need to contact their agent numerous times.

IDEAL’s digital platform seeks to solve these challenges. While mortgages are currently primarily suggested by property agents, IDEAL lets buyers select their own mortgage products. It also has a feature, called IDEAL Checking, that lets people check their credit instantly.

It helps users choose a mortgage by calculating costs and installments, and also includes a direct application system that enables users to apply to multiple banks with one set of data and a real-time tracking system. IDEAL says its digital system is secure, and minimizes human error and data leaks that often occur during paper-based or messaging-app-based mortgage processes.

Other features include detailed information about property units from IDEAL’s developer partners, different mortgage products from banks and IDEAL Compass, a short questionnaire that helps the platform understand what a customer needs and produces a simulation of monthly payments, tenor and other information about a mortgage.

The startup is currently focused on the primary housing marketing, but plans to expand to secondary housing and mortgage refinancing/takeover products. It will also launch a dashboard that will help users monitor and manage their mortgages. IDEAL also plans to expand to other major lending products, with a long-term vision of entering more Southeast Asian markets like Thailand, the Philippines and Vietnam.

Surjaudaja said 60% to 70% of Indonesia’s mortgage market falls below the secondary housing category. “Our market research signals a strong need and demand from Indonesian consumers for a way to easily takeover/refinance their current mortgage, since the gap between fixed and floating mortgage interest rates in Indonesia can be quite sizable,” with up to a 10% difference.

IDEAL monetizes through commissions from banks and property developers for every successful loan application through the platform. It is currently partnered with five banks, including CIMB Niaga, OCBC NISP and Maybank, and several of Indonesia’s largest property developers, like Sinar Mas Land, Ciputra Group and Agung Sedayu Group. Its platform connects with banks through APIs to make the data-gathering process simple.

Some of IDEAL’s competitors include Pinhome, Cermati and Cekaja. Surjaudaja says Pinhome’s business model is more property-centric, providing an end-to-end solution related to property from home discovery to home financing. On the other hand, he describes IDEAL’s business model as “customer centric” and leaning more toward fintech instead of proptech. Cermati and Cekaja, meanwhile, are financial aggregators that allow users to browse mortgage products from multiple banks, but Surjaudaja said they are not fully digital, do no provide contextual data and still require an online-to-offline process, without a credit scoring pre-check and pre-filtering applicants to banks.

In a prepared statement, AC Ventures managing partner Adrian Li said, “Indonesia’s mortgage penetration is currently at 3% of the local GDP. That 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. 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.”

Fundraising tips for early and midstage startups in 2022

More TechCrunch

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

9 hours ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

11 hours ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo

Sony Music Group has sent letters to more than 700 tech companies and music streaming services to warn them not to use its music to train AI without explicit permission.…

Sony Music warns tech companies over ‘unauthorized’ use of its content to train AI

Winston Chi, Butter’s founder and CEO, told TechCrunch that “most parties, including our investors and us, are making money” from the exit.

GrubMarket buys Butter to give its food distribution tech an AI boost

The investor lawsuit is related to Bolt securing a $30 million personal loan to Ryan Breslow, which was later defaulted on.

Bolt founder Ryan Breslow wants to settle an investor lawsuit by returning $37 million worth of shares

Meta, the parent company of Facebook, launched an enterprise version of the prominent social network in 2015. It always seemed like a stretch for a company built on a consumer…

With the end of Workplace, it’s fair to wonder if Meta was ever serious about the enterprise

X, formerly Twitter, turned TweetDeck into X Pro and pushed it behind a paywall. But there is a new column-based social media tool in town, and it’s from Instagram Threads.…

Meta Threads is testing pinned columns on the web, similar to the old TweetDeck

As part of 2024’s Accessibility Awareness Day, Google is showing off some updates to Android that should be useful to folks with mobility or vision impairments. Project Gameface allows gamers…

Google expands hands-free and eyes-free interfaces on Android