(L-R) Flow COO Artem Rafaielian, Co-founder and CEO Tomasz Borowski, and Chief Strategy Officer Arun Pai 

Flow (formerly AsiaCollect), a Singapore-headquartered credit management startup, announced today it has raised a round of debt capital from Genesis Alternative Ventures, a private lender to venture- and growth-stage companies in Southeast Asia.

This round comes less than four months after the fintech startup secured US$6 million in Series A investment, led by DEG (a subsidiary of KfW Group of Germany), Dymon Asia Ventures, SIG Asia, and SCB10X (the venture arm of Thailand’s Siam Commercial Bank).

As per a press statement, the venture loan will help Flow to execute multiple portfolio acquisition plans in Vietnam, Indonesia and other select countries where there are anticipated strong growth trajectories.

Also Read: No more henchmen, banks can now use Flow’s AI tool for loan recovery

“This funding from Genesis is another major milestone for Flow and for our debt portfolio purchase business in particular. In keeping with our mission, we can reach out to further support consumers in overcoming financial difficulties,” said Co-founder and CEO Tomasz Borowski.

Flow was founded in 2016 by banker-turned-entrepreneur Borowski. The idea occurred to him when he noticed the unprofessional practices that conventional debt collection agencies utilised to retrieve outstanding balances. He joined hands with Artem Rafaelyan and Sergei Popov to tackle this issue using tech.

The startup utilises Artificial Intelligence and Machine Learning to create debtor profiles to help banks and non-banking lenders recover their non-performing loans (NPLs) through mediums such as automatically-generated SMS, interactive voice recordings and predictive dialling systems.

Redefining debt collection begins with creating personalised, digital-first experiences that help consumers overcome their financial difficulties. Flow’s data-driven collection strategies have supported over 2.8 million consumers to date.

Also Read: Why startup founders should be open to pivoting anytime

The firm launched its first operations in Vietnam in 2016 and has since expanded to Indonesia and India.

The firm said that as it continues to grow and experience higher month-over-month revenues during the pandemic, acquiring debt capital at an attractive rate is key for it to scale up its acquisition of NPL portfolios.

According to Dr Jeremy Loh, Genesis Co-founder and Managing Partner, a  growing business needs to balance the use of debt and equity to optimise its cost of capital.

“Genesis is a returns-first, scaled impact venture lender who wants to back growth-stage companies with impact objectives such as financial inclusion, sustainable food production, small business digitisation and gender diversity, that are looking to scale across Southeast Asia,” Loh added.

As per an International Finance report, banks across Southeast Asia are preparing for a surge in bad loans due to the COVID-19 outbreak.

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Peter Shearer never thought he would run a thriving startup focussing on empowering traditional mom-and-pop eateries –known as warung— in Indonesia.

Upon looking back, he realises that food and social impact are two things that have been close to his heart.

“My background was in branding and tech and I spent more than 10 years in the industry. I was intrigued to create something meaningful and an idea occurred to me in 2017,” he recalled.

Shearer realised how these traditional eateries have been a place for people from all walks of life to get an affordable and home-cooked meal. “I figured that this is a sector that the industry has forgotten or has ignored.”

When he went around the capital city of Jakarta to get a deeper observation of warung, he found hygiene concerns were the number one roadblock that impeded the growth of these small businesses.

Revolution for “warung”

One by one, Shearer visited these mom-and-pop eateries (also called warung makan or warung tegal). “As I was trying to understand their struggles and problems and how we can help, I realised that they face the same generational problem.”

Most of these eatery businesses, which have long been in the market, were passed on to their children by their parents. They still follow traditional methods and often have become averse to changes.

Also Read: Wahyoo raises US$5M Series A led by Intudo to digitise small eateries in Indonesia

He started Wahyoo simply from the desire to build a system to help these warungs with operations, so they can save cost, have enough time to relax, and have tangible business growth.

It took Shearer two years to collect the data of all the warungs in and around Jakarta  — about 13,000. And he worked on this project all by himself and reached out to acquire them, thereby marketing his company. In September 2019, Wahyoo acquired Alamat.com and then the digitisation took place.

“We looked at Alamat.com, and their tech team was already solid with a product that back then wasn’t working well. So we got in touch with Daniel Cahyadi and Michael Rahardja, and now they are our COO and CTO, respectively,” said Shearer.

Once the tech side was settled, Wahyoo immediately got into the fundraising mode.

Early investment

Although Wahyoo was started in 2017, the tech acceleration didn’t take place until last year. Last month, it caught the attention of Intudo Ventures and led a US$5 million Series A funding round in the company.

“The reason Wahyoo raised funds is that there’s still so much untapped potential with warung makan, and our team could use the financial resources to enhance tech development. Plus, the investors realised that we have a lot of room to grow,” Shearer said.

“We came across Intudo and we felt like the team had so much to offer. They have a partner in the US with a good network and connections, especially with Indonesian students studying there. We asked them to bring home these potential Indonesian graduates and bring them to join Wahyoo,” Shearer added.

Besides Intudo, Wahyoo also scored Coca Cola Amatil’s investment.

What Wahyoo offers

Before COVID-19, these warung makan had a high occupancy rate in terms of their work on the field. This meant they rarely held smartphones because everything was done by themselves. “This is where Wahyoo’s product assumes significance,” said Shearer.

Wahyoo wants to help warung makan addresses challenges such as getting extra income and more customers, opening more stalls and getting basic help, so they can have time to digitise and grow their business.

Also Read: Indonesia’s digitised hawker startup Wahyoo acqui-hires online store directory platform Alamat

“So we came up with a programme called P3K, which consists of training, guidance and income. The income part is crucial as we help them get on board with financial management, maintain customers well and ensure hygiene so they can get more income. We also help them go online, putting them on food- delivery app. We connect them with advertising partners, getting income from brands by putting ads on their walls and tables,” he explained.

In addition to that, Wahyoo also has created its own food product, called Ayam Goreng Bikin Tajir (“the fried chicken that will make you rich”), and has placed it on the warungs’ menu to provide more meal options to customers.

The app also connects warung vendors to shop groceries, allowing for delivery to their doorstep and cutting the time and resources needed to bring all the ingredients to the stall.

COVID-19 breeds new business units

In the past few months, Wahyoo saw its warung partners suffer, as their patrons were worried about dining in due to the pandemic. As per data, in April, there was a steep 50 per cent decline in sales at warungs due to their red zone location.

So the company came up with a campaign called Rantang Hati (“lunchbox of the heart”) that supports about 60 warung makan to have new normal protocols. “We provided a washing station, face shield and a separator on each table,” Shearer said.

Aside from that, it also invented a way to help the warungs to get income through a charity movement that empowered 200 of them to feed people who were in need (such as homeless people and those who have lost their jobs due to the pandemic). Wahyoo managed to gather donations by synergising with companies to use the money to order from warungs.

“We secured 50 to 100 pax orders a day, which is unlikely for them during a pandemic. They’re happy that they were still able to operate under such circumstances,” Shearer said.

Inspired by this movement, Wahyoo realised that a lot of people miss this type of food but the digitalisation on their fingertip sort of reduces their fighting chances to stay relevant.

“I figured that since we’ve all the infrastructure we need, we have the storage, inventory and logistics, why don’t we serve companies which are located around these warungs anyway and why not open the warung catering for them. This way, it’s a win-win for both parties, as it will be more efficient in terms of delivery. The subscription model also allows for a cheaper price,” he added.

Also Read: Free lunch no more: For food delivery startups in Indonesia, this is the time to rethink their moves

Wahyoo has also set up another business unit called langganan.co.id, wherein using its already established infrastructure, it covers some housing areas around West Jakarta and Tangerang to get grocery deliveries to people’s doorstep.

Bargain power

Wahyoo is trying to provide what the big tech companies miss out on empowering warung makan.

“Warung makans’ existence allows them to cater to their own markets and target audiences, such as low-income people and office workers. With cloud kitchens on the rise, we think these warung makans can be a new type of micro cloud kitchen that can then bring them another type of income,” said Shearer.

How so? “I get asked often if these warung makans’ kitchens are available for them to use for cooking, as they also need a spare kitchen with the growing demand of their online food business,” Shearer added.

With this in mind, the growth possibility for Wahyoo is tremendous. “We believe that our B2B approach to food and social tech provides huge potential. With good service and quality and a revamp, customers will come,” Shearer signed off.

—

Image Credit: Wahyoo

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Ninety-two per cent of startups fail in their first three years. The top five reasons account for 87 per cent of the failures. Venture Builders can dramatically increase the survival rate of their venture portfolios by applying a methodology that addresses each one of these failure points.

Our experience is that industrialising failure this way can reduce the mortality rate in the first three years of a startup from 92 per cent to around 50 per cent.

Venture builders are a special kind of early stage investors. They actively build startups together with founders, rather than just investing in them. They are organisations dedicated to systematically producing new ventures, which they help grow and succeed.

Providing founders with mentorship, a clear funding avenue, and a wide range of services including software development, user design, marketing, and other business skills.

These are the five biggest reasons for startup failures and how venture builders can address them:

Building something nobody wants (36 per cent of the failures)

One of the first goals that a startup mentor in a venture builder must set for a new founder is to form a user panel, a group of 10-15 people who understand the problem that the entrepreneur is trying to solve. The true value of user feedback in startups is not well understood by many founders.

It is essential to validate whether the founder is addressing a real problem worth solving, one that customers feel like a genuine issue and one that is significant enough that they would pay to have it solved. A user panel provides frequent feedback to the founder and product team which is also crucial to getting the solution to that problem right.

Also Read: Roundup: Tuas Capital joins hands with The Hive to launch a venture builder fund for SEA startups

Hiring poorly (18 per cent of the failures)

Venture builders typically hire teams to support and develop new businesses alongside the founders. A venture builder in that sense is like a pool of professionals working on multiple startups at the same time. By getting staff supplied by the venture builder, founders know they are getting reliable staff.

It also reduces HR issues as such people are usually available quickly. The capabilities of the seconded staff are usually very well known, allowing a more accurate assessment of sources of progress. Additionally, for early stage startups getting resources this way is also more economical than hiring separately, because when the startups are facing a blockage, they can release the resources.

Failing to execute sales and marketing (13 per cent of the failures)

When it comes to marketing and sales, the main risk for a startup is the premature scaling of a company. It can be tempting for a startup to attempt to scale once it has created a Minimum Viable Product (MVP), rather than waiting until the product is right. Another mistake is to scale before it has a repeatable sales process in place. Mentoring by the venture builder should aim to help companies avoid these mistakes.

Not having the right cofounders (12 per cent of the failures)

New teams of co-founders have often not worked together before, which can be challenging in the high-pressure situation of a startup. The venture builder is actually a co-founder for the entrepreneur. As a result, the pressure to get a team of co-founders is alleviated. However, this set-up is better suited to the solo entrepreneur or a pair of founders than a fully formed team, which might already have many of the skills that the venture builder staff bring.

Chasing the investors, not the customers (Eight per cent of the failures)

It is easy for founders to spend more time seeking investment than working on the business. Venture builders typically provide a clear path for funding, subject to making progress, for the first couple of years. They can also assist with introductions beyond that. Companies that reach this stage should have expanded their capabilities enough to allow founders to seek investment.

The rest of the reasons only account for the remaining 13 per cent of the failures.

This research is based on Nova, a UK-based tech venture builder, launched in 2009. We partner with entrepreneurs to turn ideas into successful, scalable tech startups, in sectors including healthtech, fintech, and edutech.

Also Read: Venture Builders are a criminally underrated contributor to the startup economy

With no personal capital investment required, Nova provides entrepreneurs with mentorship, guidance, and funding. We invest at the pre-seed stage, and through our team of more than 20 startup mentors – plus over 100 designers, software engineers, and marketeers globally – we take startups from idea to product, to market.

We become an equity holding business partner in each of the startups we support. Our startup success rate is five times higher than the industry average. Additionally, our portfolio’s value has been growing at 83 per cent year on year and we have had four exits to date.

Nova is currently expanding to Asia. We are looking for working professionals in ASEAN to co-found startups with us. If you are interested in our venture building philosophy, please apply to our Southeast Asia programme.

–

Register for Meet the VC: DTribe Capital

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Needless to say, COVID-19 has wreaked havoc on a lot of businesses around the world. Being in the real estate industry in Myanmar, iMyanmarHouse was no exception. We went from doing two to three concurrent physical property sales events a week to zero almost overnight.

Our customers – property agents and developers – temporarily paused subscription and stopped spending marketing budget because of uncertainties in the market. We immediately went into the danger of having almost no revenue and facing the possibility of letting go of our staff. That’s when our survival instincts kicked in and did everything we could.

In the end, I believe we emerge stronger. We were profitable last year, and we remain profitable throughout the worst lockdown in history during Q1 2020 without having to retrench any staff. We continue to revolutionise the real estate industry in Myanmar. After all, what doesn’t kill you makes you stronger.

Just recently in late August 2020, we have been named as the Top Property Portal in Myanmar and as one of the Top Property Portals of East Asia alongside the likes of PropertyGuru, iProperty, and 99.co by OnlineMarketplaces.

We have:

• the most number of property listings
• the most number of property agents and developers
• the most number of site visits
• the most number of leads being sent to advertisers every month
• the most number of followers on social media

Lastly and most importantly, we are profitable. These are the lessons we have learned from the pandemic.

Adapt quickly to changing market situations

Here I emphasise on the words “quick” and “adaptability”. I will explain more about that later.

The first cases of COVID-19 were announced in late March in Myanmar. By the end of March, people were panic buying in supermarkets. The government had suspended international travel and imposed social distancing measures.

Also Read: Lessons from a travel tech startup founder on navigating the pandemic-stricken business landscape

In mid-April, during week-long Water Festival holidays, city streets were practically empty – a stark contrast to the hugely popular traditional festival that is held every year in Myanmar where many people, young and old, would be out on the streets throwing water at one another. People were too scared to go out, and most of the businesses were closed down.

Since we couldn’t do any business activities, we initially thought of hibernating throughout the lockdown. But we came to realise that this virus situation was not going to go away any time soon, and the viable vaccines would be months away, if not years.

As soon as the holidays were over, we set up task forces and started working from home. We started brainstorming among different teams and finding ways to reduce costs and increase revenue. We started video conferencing to conduct town hall meetings.

To reduce costs, we froze our staff hiring and promotion activities. We reviewed and stopped any expenditure that was not essential and not directly related to our top line. To bring in revenue, we decided to move our physical property sales events, online and set up a skunked team.

The team worked day and night to make it happen quickly. From idea conceptualisation to actual implementation, it took us one week to launch our first online sales event – first ever Online Property Sales Event in Myanmar – in early May.

It was also possible because of our very good relationship with property developers in Myanmar. We made use of various technologies such as VR and drone video footage and mapping to present the property projects online. We used our strong marketing channels to advertise for the online sales event. When the whole market was quiet and we were the only one being extremely active, the market paid full attention to what we had to offer. That was the opportunity we grabbed.

The market responded very well, and we sold over 60 property units during the two-week online event. With that success, our online sales events snowballed, and so far, we have done over 20 online sales events for different property projects. We are proud to say that we have remained profitable Q1 and Q2 of the year despite COVID-19 and lockdown.

Reflecting back, I believe we were able to “adapt quickly” to the changing market situations. The lesson for the startups is that if the market situation changes, you cannot say, “Oh, it’s out of our control! There is nothing we can do!” and sit back and hope for the best. You have to move quickly together with the market.

You have to adapt to the changing winds of the business world. Otherwise, you will go the way of dinosaurs, Nokia, Kodak and Blockbuster.

Technology at the core of everything

Although we are in the real estate industry, we consider ourselves a technology company first and real estate company second. Technology is at the core of everything we do. We make use of various latest technologies.

We gather as many data points as possible about the customers and the market trends. We then crunch and leverage those insights to predict customers’ preferences and their likely purchase decisions.

Also Read: How travel tech startup Travelhorse survives the pandemic by branching into new territory

Now everything from house-hunting to making a purchase decision and applying for a mortgage loan can be done online at iMyanmarHouse. The technology landscape is constantly evolving. In order to succeed and thrive in the market, we need to rapidly adapt and improve our technology strategies accordingly.

Team spirit is very important

While there were rampant retrenchments and closing downs of the businesses in the industry, we chose not to let go of any of our staff. After all, every single one of them was carefully selected and groomed. They are treasured as part of our big family. Instead, we chose to reduce the number of working hours and reduced the pay accordingly.

I personally chose to forgo any salary during this trying time. I personally gave out necessities like rice and instant noodles to all team members during the lockdown. I personally made a loan to any team member who needed it.

Thankfully, our staffs are beautiful souls who understood the situation and were happy to help out one another. We are extremely grateful and thankful for that.

When it comes to team spirit, our philosophy is that if a company takes care of its employees during difficult times, they will take care of the company no matter what. If they feel that they are treasured and valued, they will go the extra mile and move mountains to help the company achieve the impossible results. In fact, we have bonded closer because of the pandemic.

Resilience

It is my strong belief that resilience is very crucial in a person’s life or a startup’s journey. After all, if you are doing a startup, you will be facing countless setbacks, struggles and adversities. Unless you can demonstrate resilience during difficult times, you will give up and accept failure as a default option.

The storm will pass. Keep calm and do what you can, with what you have, right where you are. You will emerge stronger.

Gain market trust

Lastly, trust from the market is very important because a company can’t exist without its customers and users. It is our mandate to go above and beyond the call of our duty to make a customer happy. Our management team would call up a property agent and apologise if he or she is not satisfied with our services.

We would then do whatever we can to make him or her happy. By doing so, we would have turned an unhappy instance into a happy one, and the customer will become a loyal fan of ours. She would be singing praises about our services.

There have been many instances where the property seekers who became homeowners because of our efforts, were so happy that they sent gifts to us. We take extreme pleasure in that. Because of the enormous trust that the market has in iMyanmarHouse, we have been able to capitalise on it and make property transactions happen online during the pandemic. It has ultimately expanded our revenue streams.

These are the valuable lessons that we have learnt from the pandemic. I hope you will make use of them in your startup’s journey.

–

Register for Meet the VC: DTribe Capital

Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

Join our e27 Telegram group, or like the e27 Facebook page

The post How proptech startup iMyanmarHouse remains profitable despite COVID-19 appeared first on e27.

Grab-gojek merger talks gain steam as key investors push for a deal: report; Both firms are still deadlocked over management and geographical control; As per DSA sources, a core group of the Grab management strongly opposes the idea and is interested only in an Indonesia-only merger. DealStreetAsia

China’s Ant eyes SEA e-payment dominance with IPO; In the region, Ant has already invested in Thailand’s Ascend Money, with its TrueMoney brand, Indonesia’s Dana, and the Philippines’ Mynt, under partnerships with major local companies; When Ant invests in local players, it likes to highlight the benefits it brings to its new partners beyond cash, such as its tech and know-how. Nikkei Asia Review

Freshket nets US$3M from Openspace Ventures, Tanihub founders, others; It is an e-commerce marketplace that brings together farmers and food processors to supply fresh produce to B2B and B2C customers in Thailand; For the B2B segment, the local food service market is worth over US$7.7B in annual purchases spread across more than 200K restaurants. e27

CEO Nay Min Thu on how iMyanmarHouse remains profitable despite COVID-19; He says since they couldn’t do any business activities, they initially thought of hibernating throughout the lockdown; But they came to realise that this virus situation was not going to go away any time soon. The big lesson is that “adapt quickly” to the changing market situations. e27

Golden Equator Capital (GEC), Korea Investment Partners (KIP) reportedly deferred final close of US$87M joint fund; The GEC-KIP Technology and Innovation Fund has secured just US$57M, far below the target; The GEC-KIP Fund fund’s portfolio companies include Rever and Glints. DealStreetAsia

Should SEA’s super apps follow the same route as their Chinese peers?; To become super apps, each company is taking different routes; While China’s WeChat and Alipay opened their system to third-party companies via mini programmes, companies like Grab and gojek decided to add more functions into their app through in-house development of new functions or the acquisition of existing startups. KrAsia

How Supahands works with customer feedback to plan their international expansion; According to its CRO Greg Meehan, if a startup enters a new market too soon, with a shaky foundation and an unoptimised process, they can expect to burn a lot of money with no guarantee of success. e27

Enterprise Singapore launches Energy Open Innovation Challenge for startups, SMEs; The challenge is calling for innovative solutions that address 19 challenge statements spanning asset management, robotics, sustainability and workflow; Eligible SMEs and startups will get up to US$730K in grants. SGSME

Indonesia’s vehicle tracking, fleet management startup Webtrace raises funding from Corin Capital; This is the extension of its seed round, which was led by Prasetia Dwidharma; The funds will be used to strengthen its marketing and customer acquisition strategy as well as expanding sales headcounts. e27

Singapore remains APAC’s most innovative nation; The Global Innovation Index ranking is based on 80 indicators, such as mobile app creation and ease of starting a business; Singapore fared well in traditionally strong input indicators such as political and operational stability, government effectiveness and tertiary education. The Straits Times

Malaysia’s Science and Tech ministry (MOSTI) launches US$2.4M social impact match (SIM) grant to elevate social enterprise (SE) recovery; The SIM Grant aims to support local SEs and other social impact businesses to sustain their initiatives and programmes, harness their capability to fundraise, increase public awareness in social innovation and scale their solutions for good social and/or environmental outcomes. Digital News Asia

How can startups be crisis-proof?; Adaptability is the only way for companies to come out of a crisis like COVID-19; Companies that cling to old models of operations are only accelerating their demise; A good example here would be that of the fitness industry. e27

What you need to include to build an effective pitch deck; Generally, you should have two different versions of your deck; Firstly, one that has lots of white space and relatively few words; the second one that has enough words that it can stand on its own if you need to email it to someone. e27

Getting smarter with tech: How will smart cities look like 10 years from now?; To accommodate this growth sustainably, our smart city will need to address traffic congestion, air pollutants, and waste processing; Sustainability would be an overarching theme that will shape the future in the next 10 years. e27

E-wallet providers reaching out to all Malaysians; The steady growth of e-wallets signifies that Malaysians are resilient and open to exploring new ways to live, pay, and transact; To achieve widespread acceptance, there is a need to encourage behavioural changes towards a cashless lifestyle. The Star

Disruptive fintech is the best bet to economic recovery post COVID-19; Fintechs can provide solutions to SMEs that are not only more comprehensive and convenient, but also safer; Perhaps one of the most important qualities about fintech solutions today is that customers can remotely access financial services without the need to physically visit a bank, or handle physical cash. The Next Web

The architect, the sunbird or the integrator: What kind of entrepreneur are you?; Creators are very hard to find and the country, ecosystem, or government that is the most welcoming will be the one that ultimately wins; The opposite is also true; creators might leave if they find that their existing surroundings are not ideal. e27

MaGIC’s Global Accelerator Programme (GAP) cohort 4 will focus on innovation, transformation and resilience in the face of crisis; GAP is a mid-to-late startup growth programme offering startups with upskilling opportunities, access to mentorship and route-to-partners, and a chance to expand their business regionally. Digital News Asia

Singapore’s YouthTech programme to equip 1K youths with digital skills, offer work experience; It is open to all youths, but recent graduates from the Institute of Technical Education, polytechnics and universities will get priority; Unemployed people aged 35 or younger in 2021 may also apply, regardless of their educational background or qualifications. Channel News Asia

‘Not the time to be slowing down’: YouTrip CEO on pivoting from travel spend to e-commerce; With the complete halt in travel around the world, VCs-backed YouTrip ran the risk of users completely forgetting about its existence; The two-year-old company had to quickly refresh its business model to ensure that it remained relevant despite the pause in travel. Vulcan Post

Vietnam eyes development of smart cities; The nation is building three of the first 26 smart cities in the region — Hanoi, HCM City and Đà Nẵng; These three cities have seen the development of public infrastructure to provide residents services in education, health care, transportation, construction and environmental protection. Vietnam News

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