Where does the future of payments lie for SEA?; COVID-19 has acted as a catalyst for digitalisation, helping accelerate adoption of digital payments across the region; Central bank digital currency is an exciting development; Security and fraud risks arising from emerging payments methods are some concerns. More here

Transcelestial raises US$9.6M Series A to ‘deliver a step-change in internet connectivity globally’; EDBI, Wavemaker led the round; Airbus Ventures also invested marking its entry into SEA and it is opening an office in S’pore; In 2018, Transcelestial raised US$1.8 million in seed funding. More here

Jon Sheppard steps down as CTO of gojek’s financial arm; He has joined Pakistani fintech firm SadaPay in the same position; Under his leadership, Go-Finance launched PayLater; Recently, gojek group CTO Ajey Gore quit. More here

Sunway partners with Gobi Partners to launch Super Accelerator in Malaysia; It will provide selected startups up to US$23K seed funding and assist them in getting follow-up funding; The 4-month programme is for early-stage startups working in Smart Cities, edutech, digital health, food and agritech and e-commerce. More here

Taihecap Managing Partner on what SEA startups can learn from China and how to tide through COVID-19; Startups should invest more in technology than in user acquisition, says Wallace Guo; They should stop trying new strategies that will burn a lot of money; As per a Taihecap survey, the slowing down in the investment space is mainly caused by the restriction on travel as well inability to do onsite due diligence. More here

Grab, partner face US$3M fine in Indonesia for unfair driver treatment; The ride-hailing giant gave a favourable allotment of priority orders to drivers of its affiliate car-rental firm TPI; In late 2019, the company also landed in hot water in Malaysia for allegedly abusing its dominant position in the country. More here

Closing Asia’s digital divide should be a post-COVID priority; More than 2B people in Asia still are not online at all, including 207M women in S Asia alone who do not own mobiles; Investment in telecom infrastructure and cheaper phones and data will help bring more people online — but those steps alone are not enough. More here

Behind the creative minds of “Circles.Life’s” cheeky content; Find out how the digital telco generates fresh content that is loved by the digital savvy masses; The firm also recently launched an Entrepreneur-In-Residence programme where employees get an opportunity to become co-founders of their respective departments. More here

Singapore’s Robocash is raising US$5M to launch Philippines digibank; This move is in preparation for an IPO on ASX in Dec 2020; This is despite that the Philippines Securities Commission revoked its license for operating several branches of its lending business without the requisite clearance. More here

Cisco launches a 0% financing programme for Singapore SMEs; Hardware, software solutions as well as services can be purchased under this scheme; SMEs employ 65% of the city-state’s workforce and contribute nearly 50% of its economic output. More here

NTU Singpore students set up divestment group, pressure university to quit fossil fuels; NTU Divest asks the university to disclose their dirty energy investments and to reinvest these funds in sustainable technologies; It follows similar campaign moves from students at the NUS and Yale-NUS in the previous years. More here

Vietnam police summon Leflair CEO Loic Gautier; The e-commerce firm owe suppliers some US$280K for goods; Leflair shut down its Vietnamese and Philippine offices in February and started bankruptcy proceedings in May. More here

Cross-border trade digitisation platform dltledgers in advanced talks to raise US$9M Series A; The blockchain firm is close to raising US$5M already and plans to close the round by September; Last July, it raised US$2.5M in pre-A from Walden; It claims to have executed US$3B-worth of physical trade transactions so far. More here

Beyond COVID-19: A new era for deeptech startups; For startups that are pivoting to areas that are experiencing a growth surge, biz diversification through entering new sectors can yield high returns; For some startups, the pandemic has created a renewed urgency to look for new pastures abroad, despite added complexities due to international travel restrictions. More here

Pandemic forces Singaporeans to embrace digital services and financial planning; A survey finds 70% in Singapore have used online banking frequently since the outbreak; 87% of respondents agree the pandemic has reoriented them to adopt a lower consumption and higher savings habit. More here

What tech founders need to know before entering the public sector; They may know a thing or two about how to navigate the ups and downs of the tech market, but it’s clear that politics require a lot of different strategies. More here

Amar Bank launches digital-only bank using Google Cloud; The collaboration is supported by FIS Cloud and Infofabrica; This will enable the bank to utilise data analytics intelligence and ML so as to provide a more efficient personalised customer experience. More here

Singapore’s data aggregation fintech startup Canopy closes funding round; Investors are Dymon Asia, Credit Suisse, SEEDS; Canopy operates an anonymous account aggregation and analytics platform for financial institutions, wealth management professionals, HNWIs. More here

MDEC announces #SMART Automation Grant (SAG) to support SMEs making the digital leap;It’s an outcome-based grant whereby projects must achieve specific digitalisation benefits, such as increased revenue, savings in business costs, and reductions in the process life cycle and man-hours. More here

Thailand accelerator SPACE-F is looking for emerging foodtech startups in SEA; Each will receive a US$4.8K-12.6K grant and can apply for its CVC fund; Applications will be open until 12 July. More here

Philippines launches Digital Cities 2025 initiative; It’s expected to determine the industry-readiness of new centres by creating and developing ICT hubs in identified locations; 25 cities have been identified; The hubs will serve as biz and innovation centres to draw in investments. More here

Global digital health investments stayed the course in Q2 2020; The quarter saw 89 deals totalling US$2.44B, a slight increase in volume but decline in value when compared to both Q2 2019 (81 deals, US$2.45B) and Q1 2020 (82 deals, US$2.9B). More here

Examining FMCG marketplace GudangAda’s unprecedented numbers; It claims to have processed US$1B in transactions in the past 12 months; It has potential annual revenue of US$20M; The firm has so far acquired 80K big retailers, nearly 20K FMCG wholesalers in Indonesia; It recently raised US$25.4M Series A. More here

Ride-hailing and delivery service Get to be rebranded as gojek Thailand; Get has 50K+ drivers and serves some 30K merchants, more than 80% of which are MSMEs; Get saw 2.2M downloads as of Feb 2020 and achieved 20M bookings as of June. More here

Why Indonesia is the hottest payments apps battleground in SEA; With 17K islands, the country’s payment landscape is notoriously fragmented; Its 273.5M population offers huge potential for growth with the rapid adoption of digital payments set to continue;The recent Ovo-Dana merger could help merchants streamline the payment methods they offer to customers. More here

How tech and healthcare can work together in a post-pandemic world; COVID-19 won’t be the world’s last pandemic, so this conceivable not-so distant-future situation could only be the beginning; There’s a wide assortment of advanced innovations turning out far and wide to help check the spread of the novel coronavirus. More here

5G creates opportunities for Vietnam’s economic sectors; It is one of the first countries to commercialise 5G; Due to low latency, 5G will provide new services that 4G cannot yet implement, such as smart health, self-driving cars, smart cities. More here

How tech is shaping the future of public sector audits; Modern tech has turned complex analytics previously accessible only to data specialists into tools that are available to all auditors; Data analytics can provide auditors with a helicopter view of the process, allowing them to find patterns in data and identify high risk areas for audits. More here

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After the engaging discussions with the community at the e27 Webinar: The future of investing, I wanted to share some more guidance to startup founders on how to manage the crisis.

Who is the winner?

Early stage companies have more adaptability and can easily make changes compared to larger companies. While there are advantages being in the early-stage category, as you are able to manoeuvre and adapt your product, during these current times, you have to really take into consideration the sector you are in.

Some sectors such as hospitality and travel have been severely affected and need to think of a complete rehaul and reassessment of their business and business models. Others such as B2B SaaS, healthtech, e-commerce have seen a rise in demand.

As things change, it boils down to the survival of the strongest teams that can work together to come up with the customer and product-led business models and growth. When defining what goes into the making of a strong team, there is no difference between pre-COVID-19, COVID-19, and the new normal.

A strong team is a strong team and some of their key characteristics are experience, expertise, execution capability, and an obsession with the problem they’re solving. There is a strong differentiating factor between someone who is just opportunistic vs someone who is obsessed with their business.

Also Read: Is your startup in need of funding? Let the e27 Pro Fundraising Highlight do the trick!

Overall, the drive, adaptability, and a great product-market and founder-market fit within the team are crucial.

If a strong team is at a point of determining where to start, there is a lot to consider- If you are starting something in a popular vertical, there’s always going to be much more competition. There are also opportunities that can be found in less popular verticals and less crowded spaces. One must look at both sides to balance between competition and intensity.

Fundraising during the crisis

I am cautiously optimistic about the early-stage startup scene as funding rounds are still taking place and I firmly believe strong teams will get funded. Mediocre teams with rigid business models that have not been well thought out may have been able to get funding during normal times– but now, that is not going to be the case.

The most important thing for the early-stage funding scene is LP capital, which is largely speaking still in the market. While angel investors and family offices are naturally being more cautious, VCs are still investing. Southeast Asia-focused venture capital funds US$1.3 billion in additional dry powder in the first three months of 2020.

While the appetite for risk has decreased significantly over the last few months, people still need to develop a COVID and crisis-proof plan and conserve cash to have a longer runway. This would mean a normal time cash runway (18-24 months), plus another six to twelve months.

If there is anything positive that comes out of a crisis, it’s new ideas and ways of doing things to adapt to circumstances. Think of this as a time of opportunity, especially in the area of business model creation-innovative business model structures are critical for this foundation of any startup.

Also Read: Unlike in the west, layoffs are only the last option for Asian firms during a crisis: TranSwap’s Benjamin Wong

The path of profitability matters in the real world, not as much the plan. While it is important, a financial plan in the seed stage doesn’t mean everything as it is largely a test of logic and a test of understanding your business. What matters most is unit economics and having a clear line of sight to making money down the line- the sooner that is, the better. Venture Capital exists for the purpose of getting you thereby fuelling your growth.

In terms of reaching out to investors, there are various ways to connect. Warm introductions are always more powerful and usually help get your first meeting or call. It will be harder to get funding from people you’ve never met, so start with the people you’ve previously met face-to-face.

I would still say, don’t underestimate the power of cold reach outs, persistency, and pure hustle. I also strongly advise founders to research and do their homework on the macro and micro aspects, background of the investors, and VCs and reach out to people to get a sense of the sentiment.

Listen to things like podcasts from experts and it doesn’t really matter if you’re a first-time founder, just go for it!

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In his annual post, Mark Zuckerberg claimed that virtual reality would transform our relationship with technology in the 2020s. The web dominated the 2000s and the mobile apps 2010s; now, virtual reality is going to make groundbreaking innovations this decade.

If what Facebook supremo says is true, then we will witness a whole new era of how we perceive technology and its aspects in our day-to-day life.

Well, VR isn’t new to the marketers. We’ve already witnessed an example of virtual reality technology back in 2015 when Nike promoted their product with a 90-second video. Another remarkable example is the Dubai frame, where the Fernando Donis of DONIS Architects have used emerging technology to show Dubai’s architecture, economy, and infrastructure. They literally transport tourists to the bygone era to give them an experience of Dubai’s legacy.

Hence, VR has the potential to transform how we create marketing strategies. It is encouraging marketers to get more creative and think out of the box. In the beginning, it would give some stress to your pocket to create a virtual reality set up, but there’s a lot of potentials to generate leads if you use it in the right way.

Even though VR is still in its infancy, but many brands are leveraging the technology to expand its user base. Here’s what you can learn from them.

Also Read: Singapore’s VR-based proptech startup Foyr raises US$4.2M to expand to US

Let your customers have a feel of your products

To have a good start, you must learn from the pros. IKEA and Carnival cruise enable their customers to feel their products, hence equipping them to make more informed decisions.

IKEA gives a virtual kitchen remodelling experience to its customers. The customers can interact with the set up as if they’re standing in it. They can also change the kitchen’s colours and styles to gauge what their kitchen would look like after remodelling.

Similarly, Carnival Cruise takes its customers to an instant Caribbean vacation by giving them a virtual tour of their cruise.

By satiating the needs of their customers, they create the right hook for them and make them brand loyalists.

Transcend people to their favourite place

The god of fantasy drama series Game of Thrones (GOT) embraced virtual reality to transcend their fans to the land of Westeros. Imagine the excitement and adrenaline level GOT fans who got to experience the actual set up! Now imagine the bond they fostered with their fans!

What can you learn from them?

The virtual experience is more than asking your audience to put on a virtual headset. It’s a fully immersive event that gives your audience the control to make a better purchase decision.

Also Read: Cambodia-based Aniwaa expands business with the launch of VR/AR headset comparison tool

Create a niche for yourself

New York University (NYU) is using this technology for recruitment. You’d be amused to know that the students were given VR devices and asked to download an app that would take them on a virtual tour of Mars. The colours and the designs of the images were sourced directly from NASA.

Hence, NYU stood apart from other schools by using virtual reality. On one hand, it enabled teachers to choose the best out of the lot; on the other, it helps students to gauge their learning in the NYU.

Are you experimenting with virtual reality?

In the coming years, VR would grow many folds. More and more brands would incorporate this technology into their marketing strategies. It’ll help brands to give a virtual-real-virtual experience of their products. You can be the next big name in your industry. How? By being an early adopter and leveraging VR for your marketing and advertising activities.

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When a founder thinks about Taiwan, engineering talents and a sizeable, well-developed digital ecosystem are normally at the top of mind. But increasingly, entering the mix is Taiwan’s growing AI capabilities, the result of both industry trends and government policies.

In her inaugural speech given in May, re-elected President Tsai Ing-wen mentioned six core strategic industries for Taiwan that included an acceleration of AI and IoT while highlighting the future of digital and data.

In order for an AI ecosystem to flourish, both the government and the private sector must embrace and work to build it. In October 2019, the National Center for High-Performance Computing co-worked with Quanta Computer, ASUS, and Taiwan Mobile to build TAIWANIA 2, a supercomputer built for AI, which offers its cloud service through Taiwan Computing Cloud (TWCC).

Since its commercialisation, TAIWANIA 2 has driven over 300 projects from industries, academia, and research organisations. Ten million GPU computing hours have been utilised, AI training time has been reduced by 90 per cent, and the efficiency of deep learning has been raised 498 times.

The added capacity far exceeds the current computing demands of Taiwan’s AI industry, seamlessly aligning with the country’s national strategy.

As Taiwan gradually becomes a major AI centre for the development of Greater Southeast Asia (ASEAN + Taiwan), tech companies are starting to pay attention. Microsoft has already promoted their AI Infinity programme to recruit talents and set up R&D centres.

Also Read: Roundup: Samsung-backed HR-tech startup Swingvy launches in Taiwan; Filipino ride-hailing firm Angkas pivots to deliveries

In addition to covering commercial AI solutions, think tanks are being set up and Microsoft is also cooperating with National Chengchi University to open AI business courses for enterprises to understand how to implement AI to accelerate transformation within their company.

Although the new virus that broke out in the first half of 2020 halted some commercial activities and significantly impacted many existing industries, the epidemic did not stop the development of Taiwan’s AI ecosystem. In the process of updating the 2020 H1 Taiwan AI Ecosystem Map by AppWorks Accelerator, we found that in the last six months, there have been several trends worth noting:

Digital marketing platforms are shining

During the pandemic, consumer behaviour has changed. Their shopping habits accelerated from going to physical stores to switching to online channels instead. How companies can stand out in the online world has become a new learning curve for retailers. This epidemic will not only accelerate the speed of digital transformation of the traditional retail industry but also give rise to smart retail, which integrates online and offline experiences as their focus.

In the past few years, we’ve noticed that AI innovation focusing on digital marketing operations have sprung up. By using AI technology to accurately do ad placements, track user journey and behaviour, and analyse the collected data, companies are able to outline consumer profiles and thus more accurately predict consumer shopping preferences and price orientation, creating personalised shopping experiences for each visitor.

Even visitors that don’t end up converting or placing an order provides a gem of data analysis. Companies can use AI and big data to target this group of potential customers who have yet to make a transaction by carrying out re-marketing campaigns to improve conversion rates and overall marketing performance.

The opportunities are endless under this trend, especially for startups. In February 2020, MarTech startup Accuhit, which just raised a NT$70 million pre-A round, provides both subscription-based use and project-based consulting to analyse customers’ historical purchasing behaviour and make predictions.

Also Read: Roundup: Samsung-backed HR-tech startup Swingvy launches in Taiwan; Filipino ride-hailing firm Angkas pivots to deliveries

Omnichat specialises in a marketing automation subscription service that provides multi-channel conversational commerce focusing on e-commerce clients. The platform has an average conversion rate 3x to 7x higher than the overall trend in e-commerce. They recently completed a seed round earlier this year, led by AppWorks Funds.

Introduction of AI applications in healthcare

Alongside digital marketing, AI is also thriving within the medical field. According to Global Market Insights, the global healthcare AI market will reach US$13 billion by 2025, with an average annual compound growth rate (CAGR) of 40.6 per cent from 2019 to 2025. Over the past six months, particularly during this pandemic, AI usage in improving the efficiency of medical consultation and disease screening is at an all-time high.

Taiwan has accumulated years of experience in the development of AI in healthcare. Since medical AI algorithms require a large amount of labeling data in order to train the model, as early as 2018 the Ministry of Science and Technology (MOST) co-worked with National Taiwan University, Taipei Veterans General Hospital, and Taipei Medical University to open the first pathology database for cross-institutional annotated medical images in Taiwan.

These kinds of developments not only help physicians accelerate medical image interpretation and improve the consistency and accuracy of diagnoses but also shorten the time for patients to seek medical treatment and reduce invasive examinations.

In the startup ecosystem, we also see a rise in the development of AI in healthcare startups. We see applications like developing AI technology for over a billion-pixel image analysis and high-performance computing (AI HPC) with AI Explore; medical imaging AI platform services with aetherAI; medical staff assistance to interpret Computer Tomography (CT) scans for cerebral hemorrhaging with Deep01; and during this epidemic, Heroic-Faithdeveloped a smart respiratory monitoring system.

A friendly ecosystem for AI startups is gradually taking shape

As more AI startups plan on expanding to other markets, Taiwan is considered a hotbed in terms of startup accelerators, education, and research for AI founders to leverage the ecosystem. AppWorks Accelerator focuses on recruiting AI / IoT and Blockchain founders only since August 2018 and has so far recruited 89 of these startups, with 44 of them being AI and 16 of them being IoT.

Together these startups are well-positioned to further accelerate Taiwan’s burgeoning AI ecosystem.

In addition to AppWorks, there are many other accelerators supporting the AI ecosystem in Taiwan. Microsoft for Startups, Sparklabs Taipei, Taiwan AI x Robotics Accelerator, and more are all community builders that recruit AI, startup teams.

Under this AI wave, other accelerators that aren’t focusing on AI have also found success in recruiting AI startups, such as TAcc+ and BE Accelerator.

Also Read: Taiwan AI tech startups to stand out for Global Recognition at CES Eureka Park 2020

In VC, investment in AI companies has also grown year-over-year, providing financial assistance to AI startups looking for growth or expansion opportunities. For example, AppWorks Funds is a VC focusing on the three themes of AI, Blockchain, and Southeast Asia. Other well-known VCs in Taiwan include ACE Capital, Cherubic Ventures, TransLink Capital, and more have also greatly invested in AI in the past two years.

In Taiwan’s thriving AI ecosystem, new AI developments can be seen in various well-known technology exhibitions and forums. At the annual COMPUTEX conference, there’s a new startup-themed exhibition called InnoVEX that has attracted many talented AI founders to sign up to build bridges with investors and enthusiasts from all over the world.

This year due to the pandemic, COMPUTEX was cancelled for 2020 and InnoVEX changed to #InnoVEXOnlineDemo. NVIDIA also held their famous AI conference NVIDIA GTC (GPU Technology Conference) in Taipei in 2018, providing opportunities for all stakeholders to meet and each other. GTC Taiwan 2020 is expected to be held this year in Taipei.

There are institutions in the field of AI education and research, respectively. They continue to inject talent and innovation to Taiwan’s AI development. There was a tragic loss for the community of Taiwan’s AI ecosystem as Sheng-Wei Chen passed away earlier this year.

He was the CEO of Taiwan AI Academy and founded the organization that has cultivated more than 6,000 talents for Taiwan in the span of two years. His contributions include progressing the mission of transforming industries with AI, making data science known as his north star, and growing AI talent.  He and his work will forever be remembered by Taiwan’s AI growing community.

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The six largest Southeast Asian countries represent one of the world’s largest and fastest-growing regions, with a population of 668 million and a thriving GDP of US$4.7 trillion by 2025. Of all industries in the region, the financial services sector holds an exceptional potential that could be released if essential underlying challenges are focused on.

With only 18 per cent of its adult population using a bank account to receive wages and only 11 per cent borrow from financial resources, the region’s 70 per cent of the adult population is either unbanked or underbanked. Apart from this, millions of Southeast Asia’s small and midsize enterprises (SMEs) lack capital funding.

Remittance and digital payments are the turning points. Everyone is looking at digital financial services as a means of controlling these challenges. The high numbers of smartphone usage in the region– even higher than the use of financial services– make customer adoption of services such as e-commerce and ride-hailing easier, which provides opportunities to offer embedded financial services.

Among all financial services, these turning points will highly occur in the next five years. Both services, digital payments, and remittances are at or approaching the turning points now.

The most advanced service, digital payments, will exceed US$1 trillion in transaction value by 2025. Other financial services such as lending, investment, and insurance are still emerging, but each is booming by more than 20 per cent annually through 2025.

Also Read: TraXion, a blockchain-powered fintech startup for underbanked population, raises US$2.6M via private sale

Banking on technology

The effect of leveraging technology to offer the unbanked and underbanked financial services could boost the gross domestic product (GDP) in markets such as Indonesia and the Philippines by two to three per cent, and in Cambodia by six per cent.

Taking advantage of this opportunity could help shape the future of the financial services industry, specifically in smaller markets like Cambodia and Myanmar. Only a tiny percentage of the current needs for financial services of these markets are met by formal providers.

“Businesses can not compete on a global scale and citizens can not explore the possibilities of working remotely for international companies due to an inadequate cross border payment system. Financial exclusion creates many limitations,” says Philip Lim, Founder, and CEO of Skybit, a company that uses blockchain technology to provide a modern financial bridge between Myanmar and the rest of the world.

By offering digital financial services to individuals and businesses through advanced technologies, financial inclusion can open limitless possibilities for growth not just for the country’s economy but also to empower the population to avail financial services that were once limited.

“Blockchain enables monetary value to flow freely across the world over the internet, making it easier for it to enter countries like Myanmar. When blockchain is used in tandem with local mobile money platforms for domestic distribution of the country’s fiat currency, even people in rural areas without bank accounts could participate in international trade and finance,” Lim added.

Also read: How fintech is disrupting the Southeast Asian payments market

How fintech can impact financial inclusion

Fintech and blockchain solutions will have the most significant impact on financial inclusions. For example, these innovative technologies can enable fast, low-cost and customer identification and verification processes such as know-your-customer (KYC) schemes.

These services can alter the economics of the supply chain by addressing last-mile distribution and servicing issues through digitally-enabled physical access points such as smartphones or point-of-sale devices.

Digital financial services can become prevalent throughout the payments ecosystem. Government-to-person payments such as employee payments, both wages and pensions, and remittance flows can create the initial push for electronic payments, thus, supporting the development of possible supply-side business cases.

Integrating blockchain in financial services can significantly enhance access to credit by using alternative sourcing data such as payment transactions. This will improve customer profiling, fraud detection and credit risk assessment.

For savings, it can be mobilised digitally through alternative distribution channels, such as mobile wallets connected to savings accounts and automatic goal-based savings products. A secure KYC will also help in providing access to savings accounts for the unbanked and the underbanked.

“Blockchain and fintech would go a long way in empowering businesses and Myanmar citizens to participate and compete on a global scale. Aid organisations can benefit immensely by being able to receive donation payments from around the world. Financial inclusion will empower locals to create online businesses, look for remote work opportunities and conduct cross-border trading,” Lim explained.

Also read: What makes investments in fintech and alternative lending in SEA promising?

The future of digital financial services through supportive regulations

Digital financial services are expected to generate at least US$38 billion by 2025 and account for 11 per cent of the entire financial services industry. To attain the full revenue potential of US$60 billion, it requires several factors to put into places such as continued investment and incentives to stimulate mass adoption. But the most significant challenge curve will be supportive regulations and government policies.

This means that there is a need for a coordinated push in digitisation and financial inclusion, licensing, and electronic KYC to allow virtual banks and other financial services. It also means that there should be an established infrastructure such as digitised national ID systems, real-time payment systems, and effective credit bureaus.

These infrastructures will help Southeast Asia’s financial inclusion through the digital financial services industry reach its full potential.

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