Day: January 15, 2020

 

Thailand-based aCommerce, an e-commerce enabler that helps global clients sell their products in the Southeast Asian markets, has raised US$15 million from Indies Capital Partners.

This round comes almost six months after it secured a US$10 million round from existing shareholders including KKR & Co. in July 2019.

The new funds will be used to drive ‘aCommerce 2.0’, which, according to the company, is an initiative to deliver greater value to enterprise brand client. “We are now fully-funded to continue executing on our ‘2.0 strategy’ to reach group profitability and become cash-flow positive in 2020,” said Paul Srivorakul, Co-founder of aCommerce. 

A portion of the capital will also be used to better support the company’s already existing global clients (such as Samsung, Unilever, Nestlé, L’Oréal, Philips, Adidas, and Mars), recruit, and develop a better workforce, focus on core markets and achieve profitability.

aCommerce has also revealed its plans to launch an IPO, says a TechInAsia report.

Founded in June 2013, aCommerce focusses on providing e-commerce technologies and solutions. Its services include performance marketing, channel management, webstore design and operations, content production, order fulfilment and warehousing, delivery and logistics and localised customer care.

Also Read: eCommerce: Revitalising conventional forms of trade in Malaysia

Indes Capital is an asset manager focusing on private credit and equity in Southeast Asia and has invested more than US$1 billion across multiple strategies on behalf of institutional and private investors.

“We appreciate that aCommerce is putting itself ahead of the curve in terms of driving its business to cash flow generation, and only pursuing economically sustainable growth. It is a rare combination of a technology company of scale in Southeast Asia on the path to profitability, whilst still exhibiting strong growth prospects,” said Harold Ong, Managing Director of Indies Capital Partners.

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Image Credit: aCommerce

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The Monetary Authority of Singapore (MAS) has received a total of 21 applications for the five new digital bank licences it announced last year, as on December 31, 2019 (last date). The government will allow only up to five digital banks in the country — two digital full-banks (DFBs) and three digital wholesale banks (DWBs).

The new digital bank licences will allow entities, including non-bank players, to conduct digital banking businesses in Singapore. These are in addition to any digital banks that Singapore banking groups may already establish under MAS’s existing internet banking framework.

Of the 21 applications the market regulator has received, seven are for the digital full bank (DFB) and 14 for the digital wholesale bank (DWB) licences.

The MAS expects to announce the successful applicants in mid-2020.

Also Read: Digital banking in Asia Pacific: What we can expect to happen in 2020

The DFB licence will allow for the consortiums to lend money to other companies and individuals, as well as serve retail customers. DFB can take deposits from and provide banking services to retail and non-retail customer segments. Foreign companies are eligible if they form a joint venture with a Singapore company and the JV meets the headquarter and control requirements.

As for DWBs, they are only allowed to serve SMEs and other non-retail segments. DWBs will be allowed to take deposits from and provide banking services to SMEs and other non-retail customer segments. Both local and foreign companies can apply for this.

In order to successfully obtain a digital bank license, besides compliance with regulatory requirements, technical capability and a sustainable business model, an applicant needs to demonstrate how they can meet the objectives from this initiative as set out by the MAS, including deeper financial inclusion.

Regulatory compliance requires a substantial amount of investment in people and technology. Reporting at every step of the way may not be built into the DNA of non-financial institutional aspirants.

The MAS expects that “the entry of new digital players will add diversity and strengthen Singapore’s banking system in the digital economy of the future. With innovative business models and strong digital capabilities, these players can cater to under-served segments of the market.”

Eligible applicants will be assessed for the following:

The value proposition of the applicant’s business model, incorporating the innovative use of technology to serve customer needs and reach under-served segments of the Singapore market that differentiates it from existing banks. MAS will also consider the ability of the applicant to implement the proposal.

Ability to manage a prudent and sustainable digital banking business, including the level of understanding of key risks in the banking business, and strength of its regulatory compliance and risk management plans. The MAS will also consider the reputation, track record, financial strength and commitment of the applicant’s shareholders.

Growth prospects and other contributions to Singapore’s financial centre, such as the jobs it will be bringing to Singapore, its commitment to develop the skills of the local workforce, the capabilities (including technology) it will be locating in Singapore, the headquarter functions it will be anchoring here as well as its regional expansion plans.

Who are the applicants?

Although the MAS has received 21 applications for the digital bank licence, only a few applicants chose to make it public.

Here is the list of companies/consortiums which announced their applications:

Grab and Singtel; Razer Youth Bank; Beyond Consortium; Ant Financial; iFast Corporation; Hande and Yillion; Sheng Ye Capital, Phillip Capital and Advance.AI; AMTD, Xiaomi Finance, SP Group and Funding Societies; Sea Group; and Enigma Group.

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Image Credit: 123rf Stock Photos

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Visa is acquiring Plaid for US$3.5B, twice its final private valuation – TechCrunch

Visa today announced that it is buying financial services API startup Plaid for US$3.5 billion, in a deal that is expected to close in the next three or six months, TechCrunch reported.

Plaid is a platform that helps developers share banking and other financial information more easily, kind of what Stripe does for payments.

The report named the exit price, which is twice the company’s final private valuation, as “a triumph” for its investors. Plaid has raised a total of US$353.3 million, according to Crunchbase.

Another TechCrunch report stated that Visa, together with Mastercard, had “quietly” participated in a funding round for Plaid earlier.

Apple said to refuse the government’s request to unlock gunman’s iPhones – SCMP

US Attorney General William Barr criticised tech giant Apple on Monday for not giving “substantive assistance” to investigators in unlocking iPhones belonging to the perpetrator of a recent terrorist attack at a US Navy base in Florida, South China Morning Post reported.

The FBI had gotten court approval on probable cause to search the devices belonging to gunman Mohammed Saeed Alshamrani.

In a statement, Apple said that it was helping the investigation by providing information about the gunman’s Apple accounts, iCloud backups, and transaction information. It also stated that it has handed over “many gigabytes” of data to investigators, stating that it has provided “all of the information” it has.

Also Read: Today’s top tech news: Visa study says cross-border e-commerce sales poised for explosive growth

Lumitics raises seed funding to track the food wasted by Singapore’s F&B outlets, restaurants – e27

Singapore-based food waste tech startup Lumitics has raised US$557,000 in an oversubscribed seed funding round.

Co-led by the business angel and hospitality industry veteran Franck Courmont and ReadyVentures, the funding round also included Startup-O and Louise Daley (Deputy CEO of Accor Hotels Asia Pacific), who invested in her personal capacity.

With this, Lumitics’s total investment raised to date has exceeded US$743,000.

The startup said it will use the fresh investments for further product development, expand its market share in Singapore, and bring its solution to regional markets.

Capital markets platform iSTOX raises US$5M from Korea’s Hanhwa – e27

Singapore-based capital markets platform iSTOX has secured US$5 million in an investment round from South Korea-based Hanwha Asset Management.

iSTOX is a capital markets platform to support the one-stop issuance, custody, and trading of digitised securities. It is currently enrolled in the Monetary Authority of Singapore (MAS) FinTech Regulatory Sandbox, and it expects to graduate in the first quarter of 2020.

Other key shareholders of iSTOX include Singapore Exchange (SGX), and Heliconia, a subsidiary of Temasek, which focusses on investing in fast-growing companies.

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Image Credit: Michael Longmire on Unsplash

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Enigma Group, a financial services company that specialises in analytical recruitment and executive search in the US, Middle East, and Asia Pacific, today announced that it has led a consortium comprising Singapore-based Qrypt Technologies, 2359 Media and Blockchain Worx to apply for a digital bank licence.

The consortium has submitted an application to the Monetary Authority of Singapore for a Digital Full Bank license that would allow it to provide a range of financial services and take deposits from retail and non-retail customers.

The Singapore-headquartered group is also said to plan to leverage deep expertise across financial services, experience from its multiple existing licensed financial services operations in Europe, along with emerging technologies to create financial products for the target segments.

“The ability to combine our capabilities to create a sustainable and profitable digital banking business is at the core of our strategy,” said Samuel Heng, the designated Chairman of the group.

“We have assembled a consortium that includes firms led by seasoned executives and have a breadth of expertise that spans financial services, technology operations and digital transformation,” added Malcolm Tan, Founder of Qrypt Technologies and the Gravitas Group.

According to a statement, the proposed digital bank will focus on the underbanked small and medium-sized enterprises (SMEs) sector as well as the fast-evolving digital workforce.

In a study conducted by Google, Temasek and Bain & Company, over 70 per cent of the adult population in Southeast Asia is either ‘underbanked’ or ‘unbanked’.

Additionally, about 80 per cent of the surveyed SMEs state the need to borrow but lack access to affordable credit despite the region’s high smartphone penetration rate.

Also Read: Embracing Singapore’s digital bank shake up in 2019 and its consequences

Enigma Group has recently signed up to acquire ownership of a UK-based challenger-bank together with its various group companies. It is separately also involved in a Swiss Wealth Management business.

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Picture Credit: Unsplash.com/@mikeenerio

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It is no surprise that Singapore has been seeing a surge of non-banking institutions applying for a full digital banking license over the past few weeks. With strong law enforcement and transparency in the process, the city-state makes a great choice for entrepreneurs to set up their companies in.

However, in an interview with e27, Gleb Shabanov, founder of Singapore-based Kubia, explains why he is not keen on joining the others in the race … just yet.

Instead, the company opted to stay under Major Payment Institution (MPI) regulations.

According to Shabanov, by not applying for the digital banking license today, Kubia –which dubbed itself as a digital alternative to conventional banks– will actually have greater opportunity to compete and win the market.

“After the MAS gives out the results, there is actually a two-year process to set up the operations, the infrastructure, and help the selected companies to establish their business processes,” says Shabanov.

“So according to the guidelines, in the year 2020 and 2021, they are going to establish the framework and enable the companies to test their products around that time,” he adds.

The time that the digital banking licensees take to set up their business will give Kubia plenty of opportunity to grow its own offerings –and potentially, stay ahead of the competition.

“The [two-year] period will actually give us room to improve the product and grow the community around us,” he stresses.

“As the operations are set up during that due time, it will help us understand the principles and basics much better and will be easier for us to recognise the process for licensing.”

Launched in 2018, Kubia combines traditional banking services such as prepaid cards and inter client transfers with affordable remittances.

Additionally, the bank allows customers to open an account with no minimum deposit or additional admin fees. It also provides customers with real bank current accounts and current accounts for corporates.

Can new names compete against bigger names?

Even as the company wait to get a better view of the fintech scene after the announcement of full digital banking licenses, how do they plan to acquire users as a new bank?

Shabanov holds the view that at this time, it is important for Kubia to be more focussed on the development of the user experience and build a strong product, rather than focus on the legalities of forming a fully licensed digital banking community. The investment-banker-turned-entrepreneur aims to focus on building a transparent and customer-centric product.

“We are very consumer-focused. We want to be focused on the product first. You can work a lot on legal and forget about the project. There are examples of companies who spend too much time on legal matters and forget about the product. We want to integrate the best product which is amazing for the customers, and when we get mass adoption it will be easier for us to get further licenses. I would like to be as open with the customers as possible,” he elaborates.

The digital bank has already run its beta test from July to September 2019, which involved users testing the card programme, remittances, P2P transfers, and top-ups.

The founder also discloses plans to launch in the UAE.

Shabanov expresses that the UAE market for remittances is still yet to be tapped into but currently continues to maintain a strong focus in the Singapore market for now.

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Image Credit: Kubia

 

 

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