When fintech first came on the scene, the term was generally applied to the technology used in the back-end of financial institutions.

Nowadays, fintech is at the forefront of banking, giving rise to completely automated financial services with peer-to-peer lending platforms, cryptocurrency and internet banking revolutionising the way people bank, borrow and invest. 

These innovations in technology are making way for a financial and technology crossover space, where fintech and big banks are being forced to either compete or collaborate.

Big banks resistant to change

Big banks have been under increased pressure from fintech startups, particularly when this current tech-savvy generation is finding the offerings of internet banking and peer-to-peer services more enticing. 

Many argue that big banks are designed to resist change, and instead of undergoing a digital transformation, these establishments are setting out to compete against fintech to kill change. 

A lot of systems inside a bank, such as risk and compliance functions, are in place to stop such changes from happening. The main argument big banks have against collaborating with fintech is that it creates risk. 

In the UK, the Bank of England admitted that fintech could disrupt the stability of funding of incumbent banks. There is fear that in this ever-changing landscape, fintech’s lucrative services could drive consumers away from the big banks. 

On an existential level, fintech is raising the bar on how consumers think about banking. Not only do fintech’s provide great products, offers, and transparency, but they also provide a very high standard of customer care, despite not having the same level of human interaction as traditional banks do.

Also Read: Trust before technology: Why fintechs need to put more emphasis on trust

Partnerships driving fintech sector

Naturally, some big banks have begun to reposition this threat that fintech brings as an opportunity to take partnership.

By partnering and collaborating with smaller fintech startups, big banks are finding that they have the opportunity to further accelerate industry growth. 

Many can argue that banking has always been about technology and that fintech’s rise represents an evolution for traditional banking. 

Online banking platforms such as peer-to-peer lending platforms are complements to banks since they can help to improve financial inclusion.

Where banks thrive on a loyal customer-base, P2P platforms expand access to credit to borrowers underserved by the traditional banking system. In the same way, fintech’s help to fill in the gaps that traditional banks lack and help to expand markets. 

Specific fintech solutions can help to provide superior solutions for banks, giving them the opportunity to keep up with consumer demands and open up a larger customer base. 

There are some good examples of big banks complementing rather than competing with fintech. 

Some recent events proving that fintech is entering mainstream banking in a positive way include:

ANZ, Commonwealth and NAB banks with Fitbit

By leveraging existing wearable technology, Fitbit has partnered with big banks allowing them further growth and development, increasing the mobility of payments.

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

Visa and Plaid

Credit card giant Visa has recently announced its partnership with Plaid, a platform that provides digital finance products. Plaid’s products provide consumers with a convenient way to share their financial information with a variety of apps. Visa’s partnership with Plaid has seen one in four of its users using Plaid to make the connection to its mobile banking app, amounting to more than 200 million user accounts. 

Intuit and Credit Karma

American business and financial software company Intuit confirmed that it will acquire Credit Karma. The personal finance company offers consumers free access to their credit score, helps them to file taxes, shop for loans, and more. It boasts “the largest engaged member base in consumer digital finance with more than 100 million members, with 37 million monthly active users.”

The key takeaway from these examples is that fintech isn’t something Big Banks necessarily have to fear or compete with. The rise of fintech has merely opened doors by helping financial institutions to grow and expand, making it more cheaper and convenient for the average person to complete financial tasks. 

Summing up

While rumours remain high in regard to there being a growing competition between big banks and fintech startups, both have proven to be diverse enough on their own to be able to crossover and complement one another without implication. 

Many big banks hold the view that fintech can cause disruption to traditional institutions, and that they bring with them the threat of risk. Yet while fintech’s aren’t necessarily crucial to the growth and success of a bank, the collaboration between the two can bring about a competitive edge. 

Globally, there has been a rise in big banks successfully partnering with fintech’s, and both are reaping the benefits of this collaboration. 

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Kickstart Ventures has lately been in the news for its US$200 million funds deployment plans in the Philippines. For the country’s startup scene, which is believed to be lagging behind other countries in the region despite a mature infrastructure, it’s an encouraging sign.

It established itself as one of the most active VC firms in the Philippines with a total of three funds deployed since its incorporation in 2012. 

Kickstart was started with a US$2.4 million fund with the mandate to source innovation by nurturing early-stage (pre-Seed to Series A) startups to scale.

According to Co-founder and President Minette Navarrete, Kickstart’s grassroots approach allows it to fully integrate into the country’s startup ecosystem, build relationships across geographical and corporate borders, and invest in some of the most promising, innovative local startups.

Its success was followed by the creation of its second fund worth US$50 million in 2015. This fund provided Kickstart wth the ability to engage with and support early-growth stage (Series A to C) tech startups in the Philippines and beyond.

“In the early days, Kickstart focussed on startups, which have reached the early growth stages with the normally established product-market fit and with a focus on increasing traction and rapid scaling. As a corporate VC, we believe that Kickstart is best-positioned to support the needs of these early-growth stage startups by making available the scale, expertise, and experience of Globe Telecom and the Ayala Corporation,” said Navarette.

Also Read: Kickstart Ventures to manage Ayala’s US$150M Corporate VC fund in Philippines

“By facilitating these opportunities, Kickstart can co-create a more mature and enabling innovation ecosystem where innovators can thrive, and innovation is sustained, and tech startups and large enterprises are supportive of each other,” she continued.

The firm itself is a wholly-owned subsidiary of Globe Telecom, which counts Ayala Corporation and Singtel among its shareholders.

e27sat with Navarrete for an interview. She explained that while the VC firm operates independently, it collaborates closely with colleagues in Globe Telecom, Ayala, and Singtel to ensure that the deals made are strategically aligned, in addition to offering financial returns as investments.

Can you explain the reasons and expectations behind focusing on early to early-growth stage tech startups investment for the latest fund?

Minette Navarrete (MN): For our third fund in 2019, the US$195M Ayala ACTIVE Fund was announced and that Kickstart would manage it. The focus of the second fund will continue to be early to growth-stage startups, but broadens the investment scope to include early-growth stage tech startups in the various industries that the Ayala has interests in. They include property and construction, banking, utilities, manufacturing, education, healthcare, and of course, telco.

As a corporate VC that is future-forward in its vision, we ensure that we provide the startups we invest in with enough support to succeed. This means that beyond putting in capital, we also provide them with market access and connections as well as mentorship opportunities that can help them grow positively.

Can you share more details on the four different investment themes: A Frictionless Future, From Automation to Augmentation, Smarter Living, and A World of Plenty. How Kickstart plans to make it work on the larger goal of “leveraging on tech to transform lives and communities”?

MN: Nation building is at the forefront of Ayala’s list of responsibilities for their fund. In line with this, the Ayala Corporation decided to invest in the future through these four investment themes.

A Frictionless Future explores the integration of offline and online lives by merging digital and traditional channels that can improve equality and inclusivity in societies.

This is something we’ve seen with fintech companies such as GCash that are helping to fill gaps that build barriers for the general population who want to utilise e-commerce services but are unable to do so due to a lack of bank accounts or credit cards.

Also Read: Kickstart Ventures and Tencent jointly invest in Canadian media company Wattpad

Automation to Augmentation looks at the technologies that enhance human capital and improves our ways of working. These are innovations that can make work less dangerous, less repetitive, more productive, and more engaging and meaningful.

This includes innovations in data science and Big Data, leading us to make better decisions, applications of AI, and machine learning that complement and enhance human capabilities, and applications of augmented and virtual reality that offer new ways of presenting the information.

Smarter Livinglooks at improving the quality of life in the spaces that we interact and engage with, that we live in.

This includes IoT applications for smart homes and smart communities. It includes city management, making the city better and safer, and property and construction tech, making building and construction faster, safer, and more efficient.

A World of Plenty looks to address the many gaps and inefficiencies in the world that contribute to inequality and scarcity.

This involves improvements in the discovery, collection, and distribution of utilities such as water and energy, and it also includes ensuring access to basic needs such as healthcare and education.

Can you tell us about Kickstart’s support for Singapore based/founded companies like igloohome and yup.gg?

MN: The four themes mentioned before will touch on some areas of interest that Kickstart has already invested in. Igloohome is a smart access startup that envisions “a world without keys”. It speaks to the theme of Smarter Living. 

Yup.gg is an e-sports and gaming company that aims to better connect gaming content creators with brands and advertisers looking to engage with consumers in new and more authentic ways. It speaks to the theme of a Frictionless Future.

Singapore is still widely considered as a hub for businesses that aim to have a regional presence in Southeast Asia. It also serves as a launching pad for many ASEAN startups with global ambitions.

For startups founded in the Philippines, we offer guidance about how they may be able to future-proof their corporate structures, and this frequently includes setting up a Singapore entity while maintaining a local operating entity. 

In the case of Lifetrack Medical Systems, this allowed them to more easily establish a presence in Singapore and eventually move their headquarters there to aid in the expansion of their international operations.

For startups that originate in Singapore or other markets outside of the Philippines, we’re able to provide them with the support to enter the Philippine market and to establish a presence here as needed. 

With the rapidly growing internet and connected device penetration and a growing young consumer population, the Philippine market is proving to be attractive startups, such as igloohome in the smart home space and yup.gg in the eSports and gaming space.

Can you share about Kickstart’s future plan and ongoing innovation?

MN: Kickstart acts as the innovation scout of Globe Telecom. We search for tech startups whose innovations align with the strategic interests of the Globe while enriching the local startup ecosystem.

Through our work with Funds 1 and 2 with Globe over the past eight years, we’ve been given the opportunity to extend this mission on behalf of Ayala with the Ayala ACTIVE Fund.

Whereas with Globe, we focussed on digital tech startups, we now have the mandate to broaden our reach across all of the entire Ayala’s broad interests.

Also Read: Kickstart Ventures makes investment in cloud-based networking company Teridion

Kickstart will contribute to Ayala’s mission of innovation towards nation building by investing in the future we believe in. This future is defined by the Ayala ACTIVE Fund’s four investment themes.

Can you weigh in on what will Southeast Asia, especially the Philippines’s future become in tech investment?

MN: Collectively, Southeast Asia represents one of the fastest-growing economies in the world. Driven by rapidly increasing connected devices and Internet penetration, and a large emerging middle class, the region is abundant with opportunity for its startup ecosystems.

Despite being a region of geographically distributed and culturally unique markets, we’re starting to see more and more inter-country collaboration and investing over the past few years. With a total population of more than 650 million — twice that of the US — there is still a lot of potentials that can be unlocked.

We believe that the Philippines is a key market for any aspiring unicorn in Southeast Asia.

While Singapore remains the financial hub of the region, and Indonesia is the most populous market (250 million-plus people), the Philippines has the second largest population of the region (100 million-plus people) and can be an effective entry point into the region for new products and services.

While the Philippines startup ecosystem has not matured at the same rate as some of its ASEAN peers, there are reasons to believe that this will change soon. Government support is increasing with recent legislation enacted such as the Philippine Innovation Act and the Innovative Startup Act while the availability of private capital and support for tech startups has increased significantly with many Philippine conglomerates recently establishing CVC funds (for example, JGDev from JG Summit, UBX from UnionBank, and of course, Ayala ACTIVE Fund from Ayala Corporation). We’re optimistic that it’s an uphill climb from here onwards for the Philippines.

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Picture Credit: Kickstart Ventures

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Fashion tech VC firm Lyra Ventures announces new Japan-backed global fund

Fashion tech VC firm Lyra Ventures, which was formerly known as Start Today Ventures, announced the launch of their second fund with investment from TSI Holdings, one of Japan’s largest fashion conglomerates.

This announcement follows Lyra Ventures’ recent investment into the US retail platform Neighborhood Goods, a move that has been heralded as “the reinvention of the department store.”

The investment from TSI Holdings complements Lyra Ventures’ existing partnership with ZOZO Co. Ltd, Japanese fashion e-commerce operator.

The new fund, Lyra Ventures said, allows it to focus exclusively on global opportunities. In particular, the experience and international operating expertise of Lyra Ventures’ team and advisors in providing a strategic platform for companies that are ready to expand to Japan and Southeast Asia.

Lyra Ventures’ earlier investments include Syte AI —a visual AI technology provider whose clients include Farfetch, Marks & Spencer, Boohoo, and ZOZO, and UK-based customer engagement SaaS solution Mercaux.

Indonesian waste management startup Waste4Change gets funding from three VCs

Bekasi-based waste management startup Waste4Change received an undisclosed amount of funding from Agaeti Ventures, East Ventures, and SMDV, Tech In Asia reported.

Waste4Change said it plans to use the funding to increase its waste management capacity, targeting to contain at least 2,000 tonnes of waste per day in 2024. The startup also plans to launch an integrated smart city management platform in collaboration with other waste management system provider Sampah Muda from Semarang.

Waste4Change was established in 2014 by Environmental Engineering graduate Mohamad Bijaksana Junerosano. In addition to offering waste collection and management service, the startup also offers consultancy, education, and environmental campaign.

Global student support platform Zookal raises US$9.8M to set foot in Southeast Asia

Australian edutech startup Zookal, which provides a variety of services and products, announces that it has raised US$9.8 million in equity funding, looking to accelerate the company’s growth in Southeast Asia.

Existing investors Koh Boon Hwee (former Chairman of Singapore Airlines and technology investor) and Bernard Sabrier (Chairman of USD$26 billion funds, Unigestion) led the round with participation from Wee Hur Holdings Ltd, a publicly listed Singaporean construction and property development company that has a portfolio of purpose-built student accommodation.

Also Read: Zookal raises US$550K for student textbook rental portal, eyes SEA

The capital raised will support the company’s growth in Southeast Asia by allowing Zookal to triple the size of its engineering team and make strategic hires. The hiring includes its recently appointed VP of engineering Manuel Silva, who was the former director of engineering and consumer product of The Iconic.

Ahmed Haider, Co-founder, and CEO of Zookal said, “Southeast Asia is a very attractive market with our digital users growing to 300,000 in just eight months. Our goal is to reach 10 million students in the coming years as Asia comes online by making education more affordable and accessible to them.”

Moovaz secures Series A funding from supply chain company YCH Group’s venture arm SCAngels

Moovaz, Singapore-based relocation solution startup, announces an undisclosed amount of Series A funding from YCH Group, the supply chain solutions company, through its corporate venture arm SCAngels.

According to Tech In Asia, Moovaz said it will use the funding to develop features that will simplify processes in the global relocation industry.

Went online just a year ago, Moovaz works with its global network of more than 2,000 certified moving service providers as partners.

As a co-investment partner of SCAngels, SGInnovate will also contribute to the funding.

Medtech startup Cardiotrack gets funding from Singapore-based Frontline Strategy Funds

Singapore-based private equity platform Frontline Strategy Funds announces that it has led an investment in the Singapore-headquartered medtech startup Cardiotrack, along with other angel investors. According to an article by YourStory, Cardiotrack will use the funds to grow its customer base in India and international markets.

Cardiotrack was founded by Avin Agarwal and Ashim Roy. It aims to bridge the gap between healthcare providers and chronic patients for affordable access to healthcare and better disease management. The platform has an end-to-end disease management platform with diagnostic-grade medical devices connected to the mobile, cloud, and AI technology.

It includes 12-channel portable ECG and remote medical consultation services through its network of trained and certified medical professionals. In more than 16 countries where it has presences, it offers portable medical devices, report interpretation, and medical consultation for home screening, corporate wellness screening, and health camps to support chronic patients anywhere and anytime.

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Image Credit: Lyra Ventures

 

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Personalised customer experience is now possible at better values. With a filtered, informed insight on consumer demands, companies may also tailor-fit their inventories, saving wasteful production costs. Efforts are optimised, and
customers are satisfied. Both parties win.

Nike, the world’s biggest and most prolific sports retail brand, has taken this personalised customer experience offering a notch higher by combining its recommendation tool with augmented reality tech. In select markets, customers may determine their shoe sizes by simply taking a photo of their feet through its mobile app. The sizes are even optimised per shoe type. A customer’s best fit may be a size nine for a Nike Pegasus but a size 8.5 for a Nike Cortez, since running shoes need more space for better cushioning.

The company’s execs say the app can determine the shoe size of a customer better as it learns over time, so if a customer buys more shoes, the app will get better in the long run. That may be more of a marketing tactic to get you to buy more shoes, but I would bet that it works.

This is just the beginning of the transformational effects of AI on businesses. According to the latest IDC survey in 2018, only 14 per cent of businesses in Southeast Asia have adopted the technology. With more embracing the tech, artificial intelligence is set to transform not just board rooms but production lines too.

In the Philippines, AI is already threatening to massively upend an entire industry—business process outsourcing. Chatbots or AI-operated assistants have proven to be the quicker and more cost-efficient responder to customer inquiries, replacing human call centre agents altogether.

Also Read: How not to build a bot: 3 steps to a cringeworthy chatbot experience

Conversational commerce

Commerce is perhaps one area where AI seems to be making the most noticeable leaps and bounds. When Siri was introduced by Apple in 2011, retailers thought customers would eventually shop for their favourite clothes or their pantry needs as easily as calling a friend through voice assistants. Almost a decade since though, the market, especially in emerging countries, is yet to embrace voice commerce. But they’ve turned to another force of conversations today to do the shopping in their stead: chat assistants.

In the Philippines, the third most visited platform is Facebook Messenger, with nine out of 10 internet users in the country utilizing the service regularly. Aware of Filipinos’ love for chat, some consumer brands, including financial services such as banks and e-wallets, have deployed highly interactive chatbots on its Facebook pages to engage with customers.

Philippine startup Aiah is one of the leading startups in the Philippines to develop interactive bots for select brands that want to participate in conversational commerce. It has automated chat conversations for brands to help them with leads generation or customer service. “For one of our clients, we have automated how the page will respond when a user clicks on their ad on Facebook, which fast-tracked the application process for the service o$ered,” Aiah co-founder Gian Paulo dela Rama said.

The chatbot, instead of just forwarding the inquiry to a human customer service officer, interacts with the user instead, asking standard questions, from requesting the applicant’s name to requesting their identification documents.

At the backend, the chatbot also simultaneously checks if that specific user’s location can be catered to by the specific service offered by Aiah’s client since it’s site-sensitive. That mere process alone has optimised the application process, enabling the company to cut it down from two weeks to two days.

Also Read: Ways to improve your brand awareness with chatbots

And this is just the beginning of the chatbots’ takeover. Gian has shared that in a few years’ time, chatbots will also get better at identifying the tone of the customer, so the bot can anticipate negative emotions and have better responses to prevent dissatisfaction. Chatbots can help brands provide a drastically better customer experience. Empathy can even be taught to machines.

Already, chatbots are cheaper, faster and sometimes more effective than their human counterparts. After all, chatbots don’t get exhausted from hours of responding to human inquiries. The exciting part is, chatbots are just one level of automation. The more labour-extensive work happens at the backend, which
involves another type of AI—robot process automation.

If chatbots automate responses on any messaging service, RPA (robot process automation) automates any manual work with a computer. Think of any job that involves paper, forms, or interactions. Soon, encoding work will be done by computers alone. There are computers today that can scan hundreds and thousands of forms in 24 hours. Imagine how transformative that can be to companies that still rely on human agents to manually type out written text, and encoders who sit day in and day out just transferring written text to the screen.

In the insurance technology or insurtech space, Saphron, has found a way to make the lives of their agents easier by giving them an AI-powered assistant called NAN.AI. A bot on Messenger, NAN.AI allows agents to simply upload the photo of application forms online, which then identifies the written text and enters it into the system as fully-parsed data. This cuts the onboarding process from days to mere minutes, transferring the manual work of typing out thousands of text “fields to the machine. With a faster process, Saphron is able to provide more in less time, helping not just the agent but the insured customers as well.

AI is set up to complement human work, freeing humans from simple, routine jobs, and allowing people to do more creative, stimulating tasks. Technology has always been adapted to humans, not the other way around. AI’s ability to do simple tasks at scale has also made deployment of seemingly sophisticated tasks
easier, allowing more markets to have access to better opportunities.

Also Read: Ways to improve your brand awareness with chatbots

That immense impact to markets is already felt in the fintech scene, where startups are utilising machine learning to reach unserved and underserved markets more efficiently.

The country’s leading microinsurance provider, CARD MRI, for example, now employs AI to develop a credit scoring scheme for the masses. The company feels it could provide affordable, formal loans to those at the bottom of the pyramid, where the majority of their five-million large customer base doesn’t have the documents for a traditional bank.

To do this, they are filtering their current customer dataset based on a set of criteria. The criteria would allow them to see the customers who are diligent payors, those who have good credit history and even the amounts they are paying. From just their dataset alone, CARD MRI already knows who will most likely be the best customers to provide better loan packages, without checking their documents. Suddenly, the five million customer base is down to a few hundred thousand —a customer base their agents could better focus their efforts on and help with their financial needs.

That effort would have taken months, even years, if done by a few hundred agents who will assess each loan applicant’s documents. It frees up both the company from laborious work and the customer from going through rigorous effort just to complete requirements. It all seems beneficial on paper to the loan provider, but with this kind of process, the customer is also given access to better packages with less waiting time.

That could be life-changing for the market CARD wants to serve, especially when chances are, their lives are a race against time. It could mean a student gets to pay tuition on time, or a farmer can buy the proper fertilisers for richer harvests next season. AI is now increasingly affecting everyday customers, even without their knowing.

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This story has been excerpted by courtesy of the publisher from Ready or Not 2020: The 5 Trends Changing the Landscape of Business by Winston Damarillo (Talino Venture Labs, 2020).

To purchase the book, please visit this site.

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Quona Capital closes US$203M round to focus on fintech companies in emerging markets

American VC firm Quona Capital, which focussed in growth-stage fintech companies in emerging markets such as Asia, Africa, and Latin America, announced the close of its second fund at US$203 million, according to Tech in Asia.

The fund has been said to exceed its US$150 million target, and receives support from various global asset managers, insurance companies, banks, university endowments, family offices, and development finance institutions.

Some of the firm’s investments in Southeast Asia include Koinworks, Julo, Sunday, and Ula.

Frogs Indonesia carries out flying taxi test flight in Yogyakarta

Yogyakarta-based startup Frogs Indonesia has carried out test flights of its two-seater all-electric taxi Frogs 282 at Gading Airport in Gunung Kidul regency on Saturday, according to Asiaone.

Developed over the past two years, the taxi floated a few centimetres above the ground during a series of trials and was examined by technicians after it landed. However, Frogs Indonesia CTO Dedi Satria Maulana expressed his dissatisfaction of the prototype.

According to him, improvements need to be done to the machine to cope with the “rather heavy” air density in the regency.

The test was conducted to prepare for the upcoming 2020 Hannover Messe technology exhibition in Germany.

2C2P adds Eva Weber as investment director to accelerate growth

Payment services company 2C2P announced today that it has appointed Eva Weber as its Investment Director.

With experience in the financial services industry, Weber will be responsible for future investments as well as investor relations.

Also Read: Morning News Roundup: Fashion tech VC firm Lyra Ventures launches new fund

Most recently, Weber led financial planning and investor relations at Adyen, a global payment company headquartered in the Netherlands.

Undeterred by COVID-19, Hong Kong’s Omnichat lands US$800K seed fund from AppWorks

Hong Kong-based e-commerce messaging platform Omnichat announced that it has raised NT$24 million (US$800,000) seed funding round led by AppWorks. Joining the round was Aria Group and other undisclosed investors.

The proceeds will be used for customer acquisition and expansion within and outside of Taiwan, with plans to launch in Singapore and Malaysia in 2021.

The Hong Kong startup has recently worked with brands including HH Herbal, TOYSELECT, and Moët Hennessy.

By the end of 2019, Omnichat claims to have 3,600 new customers, of which more than 70 per cent were from Taiwan.

India’s Paytm Mall Executive Director Rudra Dalmia quits after promotion

Paytm Executive Director Rudra Dalmia has quit the company only less than a year since his promotion, according to a report by Entrackr.

Paytm Mall is the online consumer marketplace division of the Paytm brand, one of the largest digital payment services in India.

Also Read: Owning your data is a basic human right, says blockchain-based startup Credifys Rasmus Kütt

“Dalmia resigned last month and is currently serving his notice period. His abrupt departure from the company raises questions on the coherence and longevity of Paytm Mall’s strategy,” the report quoted.

Indonesia mulls 2032 Olympics bid with SoftBank backing

Indonesian President Joko Widodo is considering to enter the bid for 2032 Olympics with potential financial support from SoftBank chief executive Masayoshi Son and other investors, Reuters wrote.

The plan centered around the country’s up-and-coming new capital in Borneo, which SoftBank had expressed interests to invest in.

Bahlil Lahadalia, chief of the country’s investment coordinating board (BKPM), stated that the government has submitted a bid for Jakarta.

Representatives of Grab and SoftBank have declined to comment.

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Anisa Menur Maulani also contributed to the writing of this article.

Image Credit: Quona Capital

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Coined in the 2010s, in response to a surge in high-profile closures of brick-and-mortar retail stores in the US, the term “retail apocalypse” supposedly heralded the end of physical retail.

While the situation in Malaysia is not yet as dire, the retail landscape has changed, and the outlook for traditional retail in Malaysia is gloomy.

Just last year, Parkson Corp Sdn Bhd shuttered its department store outlet in Suria KLCC, where it had been since 1998; and, as footfall into shopping malls continues to dwindle, more closures could be on the horizon. 

However, it may not be the end of days for physical retail. In China, malls and traditional retailers are seeing a resurgence as they adopt technologies that give them a better understanding of their customers, enabling them to deliver a better experience and value.

Furthermore, they have also invested in converging the online and offline experience for their shoppers, giving them seamless experiences between their online and offline stores. 

It is unlikely that physical retail will completely die out; if anything, the movement of e-commerce retailers into the brick-and-mortar landscapes shows that consumers still have some preference for sampling products in real life before purchasing them.

Also Read: Morning News Roundup: Vietnam’s e-commerce startup Leflair accused of owing US$2M to suppliers

However, in order to stay abreast of the changing retail landscape, brick-and-mortar retailers must adapt to customers’ changing expectations. This includes adopting the latest trends and technologies such as experiential retail, mobile payments, and big data. 

Bringing small retailers up to speed

What are the challenges they face?

That said, this solution may come easier to some businesses than others. Big data, analytics, market research, and even large-scale experiential retail employed by brands like Sephora, have traditionally been seen as capital- and labour-intensive solutions available only to big players; for SMEs with limited funding and technological know-how, these solutions seem out of reach. 

According to a study, 69 per cent of SMEs have incorporated Industry 4.0 technologies into their operations, which is certainly a figure to be optimistic about. However, obstacles remain in the adoption of the latest technologies, in the form of insufficient finances, knowledge, or workforce talent. 

This is something we at Innergia Labs have realised first-hand while communicating with retailers: Some retailers lack awareness of the benefits of data, and how understanding customers through data can drive revenue; some retailers hesitate to adopt new systems out of a fear that they lack the manpower and expertise to use the tools effectively; others believe that adopting new technology is an expensive affair with an unclear return on their investment. 

The troubles facing small retailers only deepens when online retailers are included in the equation. In contrast to the struggling physical retail sector, ecommerce seems to be on the up-and-up, with online retail in Southeast Asia predicted to grow from $19 billion in 2018, to $53 billion in 2023.

Increasingly, consumers are turning to large online marketplace platforms, like Lazada and Shoppee, who are able to provide products at competitive prices and deliver them at convenience. Already, 80 per cent of Malaysian internet users are shopping online. 

Also Read: Afternoon News Roundup: Malaysian e-commerce aggregator iPrice raises US$10M Series B financing

In order to remain competitive, retailers — big or small — must adapt. However, there is a significant gap in the adoption of beneficial technologies between big businesses and SMEs. When considering that 98.5 per cent of Malaysia’s business establishments are SMEs, this is something that requires immediate attention. 

How can these issues be addressed?

As the saying goes, “if you can’t beat them, join them.” For small retailers to thrive, they must get on board with the sort of technologies that their competitors are using. 

When devising solutions for small retailers, the constraints that SMEs face must be taken into consideration. To address the lack of capital that most SMEs have, the solutions offered must be priced fairly.

To address the manpower and knowledge shortage SMEs deal with, these tools must be easily implemented: the amount of resources required to start utilising them must be kept to a minimum — they should require as little extra hands, and extra knowledge as possible.

Of course, education is also paramount. More efforts must be made in reaching out to small retailers: They need to know that there are tangible benefits to adopting these tools, and that solutions they can afford exist in the market. 

An example of this is retail business analytics. With retail business intelligence software, data is no longer solely the domain of ecommerce and big businesses.

It is now possible for small retailers to gather data, to personalise their customers’ shopping experiences, craft sales strategies, and address the pain points of physical retail. 

Also Read: E-commerce trends: What to expect in 2020

Data collection addresses some of the unique pain points and challenges that small physical retailers face. These are the time and costs of manually collecting and managing sales data — which can take up to three days, or even more, when done traditionally — and shrinkage and pilferage by staff.

These problems are further exacerbated when expanding into multiple outlets as resources are spread thinner, resulting in a drain on revenue. With point-of-sale data analytics, managers can cut down on time spent rifling through and organizing sales data, and can quickly catch anomalies in sales records to nip pilferage at the bud. 

Furthermore, collecting data enables these small businesses to remain competitive by employing tailored sales strategies e-commerce-style. Just as most e-commerce websites gather data on consumers to personalise their shopping experience and thus drive sales, with the proper use of retail analytics, small businesses can identify sales patterns in the data they have retrieved and visualised, in order to craft sales strategies.

In the case of an F&B outlet, this could mean using retail analytics software to collect data on what their best-selling products are, what other products are bought alongside them, and what the average expenditure of each customer is. With this knowledge in hand, they can design a set meal that fits not just their customers’ tastes, but also their wallet size. 

In conclusion

Reports of physical retail’s death may have been greatly exaggerated, but it remains true that physical retailers must continually adapt in order to stay ahead of the game in the rapidly-changing retail landscape.

As SMEs form the backbone of Malaysia’s business establishments, it is imperative that they are not left behind. Now, there are more solutions available on the market that physical retailers — even those with limited capital — can utilise to give themselves that much-needed edge on the rocky road ahead.

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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. We are discussing inclusivity at work and women all of March. Share your thoughts, tips and best practices on how we can make the startup ecosystem more inclusive, gender and culture diverse.

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Business

Vietnam’s e-commerce platform Leflair allegedly owes US$2M liabilities to suppliers, customers

Leflair Vietnam, an e-commerce startup which ceased its local operations in February, is accused of owing US$2 million in liabilities to around 500 of its suppliers and many customers, Tuoi Tre News reported.

According to the suppliers, Leflair representatives admitted in a meeting that it is undergoing a capital crunch and is seeking funding from different investors. 

The company also revealed that it only has less than US$50,000 in its cash account.

Founded in 2015, Leflair was started as an online platform with a flash-sales model and sourced goods from brands and official distributors such as Calvin Klein, Botanist, and Moleskin, and resold them to Vietnamese customers. 

Before ceasing operation, Leflair raised US$7 million in Series B funding from Belt Road Capital Management and South Korean retailer GS Shop.

Coronavirus Drug Discovery competition reveals top 3 potential COVID-19 treatments

Sage Health, an organisation with a mission to help treat, prevent and cure all human diseases by the end of the 21st century, hosted Coronavirus Deep Learning Competition.

The competition has revealed its top three potential solutions identified from contestants, they are:

First place: 

Matt O’Connor, Founder of Reboot.AI, Data Science Coach-based in Hong Kong and New York City.

Results: He identified Remdesivir as a potential COVID-2019 treatment, as well as a few other novel molecules that still need to be tested for synthetic feasibility, using a generative recurrent network trained on the Moses and ChemBL datasets which together represent about 4 million molecules to learn a representation, a compressed form, of all of them.

Second place: Thomas MacDougall, a graduate student in Computer Science at the University of Montreal.

Results: He identified a novel compound as a synthetically feasible potential treatment for COVID-2019by building a neural architecture using constrained graph variational autoencoder to generate molecules, and an edge memory neural network to classify them.

Third place: Tinka Vidovic, a PhD student at the Mediterranean Institute of Life Sciences based in Croatia.

Results: Vidovic identified Valproic Acid as potential treatments for COVID-2019 using a Connectivity map genome-scale library of cellular signatures that catalogues transcriptional responses to chemical, genetic, and disease perturbation her analysis. She also used a dataset called ‘Harmonizome’, which contains 72 million functional associations between genes and their attributes as a starting point.

Also Read: Keep calm and remain communicative: Startup founders share how they cope with coronavirus crisis

Sage Health was founded in February 2020 by Siraj Raval and Dr John Billings with a mission to assist healthcare providers in both volunteer and paid projects, involving its growing community in as many related initiatives as possible every step of the way. 

The Coronavirus Competition is its first initiative, and it will be donating samples of the winning compound to the Wuhan Institute of Virology for further analysis.

Malaysia’s Cradle Fund reveals 5th cohort of Coach and Grow programme

Malaysia-based early-stage startup nurturer Cradle Fund announced a collaboration with Proficeo Consultants to launch the fifth instalment of Coach and Grow Programme (CGP)2020 to support the fast-growing innovation ecosystem in the country.

According to Digital News Asia’s article, CGP is a specialised coaching programme focussed on nurturing startups and growth-stage companies to get them on the path of sustainable revenue generation and scale.

The programme provides “show-how” techniques from successful entrepreneurs, investors, and corporate professionals who join the programme as coaches in order to Pay-It-Forward to the ecosystem.

Acting Group CEO of Cradle, Razif Abdul Aziz (pic) said the CGP’s goal is to help build and strengthen the capacity of local entrepreneurs and to accelerate the growth of Malaysian tech-companies.

Started in 2011, the CGP was the first long term coaching programme offering customised content and dedicated coaches for a period of 12 months. 

This programme is fully mandated by the Government of Malaysia for high potential entrepreneurial ventures with the objective of creating a pipeline of high-quality companies that will grow and scale their businesses locally and regionally and attract investment and growth funds from funding agencies and investors.

Enrolment for CGP opens from March 6, 2020 with 100 places available for startups and growth-stage companies.

People

Co-founder of Bali-based creative community hub Rumah Sanur Arif Budiman passed away

One of three co-founders of Bali’s Rumah Sanur – Creative HubArif’ Ayip’ Budiman passed away yesterday at 10 pm local time at Puri Raharja Hospital, Denpasar, Bali. Budiman was known as a creative hustler in Bali’s startup scene and also Deputi Litbang (Head of Research and Development) of Indonesia Creative Cities Network (ICCN).

The deceased will be laid rest at Kampung Jawa Jalan Maruti 13, Denpasar at 1 pm local time today.

Also Read: Indonesia’s association for coworking spaces is officially launched

Rumah Sanur – Creative Hub was opened in June 2015. In line with the co-founder’s vision of fostering Indonesian makers and creatives, Rumah Sanur nurtured two startup businesses—Kopi Kultur, a coffee shop that works directly with Indonesian coffee farmers and To~Ko Concept Store, a store that presents designs by small-to-medium enterprises from across Indonesia with a focus on sustainability and upcycling.

Over time, as the website recorded, Teras Gandum, the Bali Export & Development Organisation, Rudolf Dethu Showbiz, and Chris the Barber joined the Rumah Sanur family.

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Picture Credit: Unsplash.com/Dimitri-Karastelev

 

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SAMA, a digital recruiting platform for migrants, closes US$1.15M seed round

Sama, a Singapore-based startup that uses a digital recruiting platform to match migrant workers to jobs, announced today that it has closed a US$1.15 million seed funding from Collaborative Fund, 3tvcp, Antler and other unnamed angel investors.

Steve Melhuish, Co-founder of Property Guru, also joined the round.

The company plans to use the capital for growth in 2020.

SAMA recently became a fully-licensed agency, having obtained the Singapore Ministry of Manpower (MOM) license to work directly with companies to address hiring needs.

Also Read: Owning your data is a basic human right says blockchain-based startup Credifys Rasmus Kütt

Migrant workers are currently said to be paying S$10,000 in agent fees to secure a job in Singapore, Sama targets to drastically lower these rates and enable workers to save for the future.

Newman, a medtech startup for men in Indonesia, raises US$150K to boost marketing initiatives 

Indonesia-based men’s medtech startup Newman, which was part of Y Combinator in the US last year, has raised US$150,000 from the accelerator, according to DealStreetAsia.

Also Read: Morning News Roundup: Vietnam’s e-commerce startup Leflair accused of owing US$2M to suppliers

Prior to this, the startup had raised undisclosed pre-seed funding from Indonesian early-stage VC firm Everhaus.

The platform that aims to tackle uncomfortable topics in health through its online consultation aims to use the funds to grow its team and bolster its marketing initiatives.

Newman has also expressed plans of offering consultation into other verticals, like erectile dysfunction and smoking cessation.

First Digital Trust raises US$3M from Taiwanese venture studio Nogle

First Digital Trust (FDT), a technology-driven financial institution powering the digital asset industry, has secured US$3 million in funding from Taiwanese venture studio Nogle according to a press release statement.

Previous investments of Nogle include Telegram and TNG.

Also Read: Singapores Vouch Insurtech raises US$755K from GREE Ventures, Nogle Capital, angels

The newly added funds will support FDT in building its platform as they prepare their Asia launch in May.

“At Nogle, we are always looking for the next innovative technology that will disrupt the financial services industry. That is why we have invested in First Digital Trust. We see great potential in their technology for the digital asset industry, which will pave the way for the future of trust and custody services”, said Jonathan Leong, Founder of Nogle.

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Image Credit :  Anthony Fomin

 

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The tech sector is a notoriously difficult place to be a woman. A congressional report shows that only seven per cent of women-founded businesses receive venture capital funding. Every time we turn around, it seems there’s another gaffe that causes a rise within the community — this ranges from major companies’ lack of women in board positions to distasteful overheard conversations.

While most everyone in the tech sector has an opinion on the issue, for me, being a woman in the fast-growing tech space has actually paid off. In fact, I think that in most ways, being a female in tech has worked to my benefit.

Also Read: 3 awesome Indian women entrepreneurs tell you what it takes to start up

Maybe it’s the dynamic between me and my Co-founder Eileen Murphy Buckley, or the fact that we’re an ed-tech company that operates in a female-dominated industry (nearly two-thirds of teachers in the US are women). I’d like to think it’s because we built an amazing product that helps great teachers teach better. So far, all signs point to the fact that we’re doing something right: ThinkCERCA is now available in schools nationwide, and we’ve secured US$1.5 million in funding. We were a graduate of the Impact Engine Accelerator’s inaugural class, and we won the Bill & Melinda Gates Foundation Literacy Courseware Challenge in July 2013.

So how can you navigate the complex male-dominated tech world and succeed?

Combine skill sets
You have to be strategic about whom you partner with and bring onto your team. Our biggest success had nothing to do with gender. It had to do with our team’s unique combination of skills. I come from an entrepreneurial background, and have years of experience taking businesses from concept to launch, growing them in both revenue and size. Eileen is a teacher turned entrepreneur, and the former director of curriculum and instruction for a major school system. So while I brought the entrepreneurial know-how, Eileen brought the industry expertise and a firm basis of pedagogy and research. This helped us create a product that principals, teachers and students really need. Her deep knowledge continues to help us meet our core goal: helping students achieve college and career readiness.

I believe it’s this combination of skills that has not only helped us build a successful business, but also secure funding.

Never shy away from the hard stuff
So much of our success can be attributed to our dedication to our customers. Sometimes that means going against what others are telling you to do. While the ed-tech market continues to boom, there’s still the age-old problem of the chicken and the egg. Several investors wanted ThinkCERCA to be something it was not. They told us we either had to be a content publisher or a technology platform. Despite this feedback, based on our expertise and what our customers were telling us they needed, we decided to be both. Technology alone wasn’t the answer. Content alone wasn’t either. Focussing on both, and using a research-based approach, we have carved out a place in the ed-tech ecosystem and are poised for continued and rapid growth.

Build a team of mentors and advocates
While Eileen and I have a great partnership, we have strived and will continue to work to create a team that complements our skills and builds off of what the two of us have created. We now have 16 people at ThinkCERCA whose expertise ranges from technology to sales to marketing. In addition, we’ve had an incredible group of mentors and advisors, such as Chuck Templeton, the former Managing Director of the Impact Engine accelerator. Our mentors have provided the encouragement we need but also given us hard-nosed doses of reality from time to time. Our mentors aren’t the people who always tell us what we want to hear. They’re always looking out for us and telling us what we need to hear.

Also Read: Crowdfunding is a strong community building tool for women

As our business has grown, so have we. When we came together, Eileen was “the educator” and I was “the entrepreneur.” Now, we have both learned and have each assumed both roles. We are able to fluidly assume the voice of the customer and the voice of the business, which allows us to brainstorm and problem solve, and — most importantly — switch hit. Thanks to our complementary skill sets, dedication to our customers, and our refusal to accept the stereotypical limits that go along with being a woman in tech, ThinkCERCA is doing great things for the future of education.

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Abby is the Co-founder and COO at ThinkCERCA (www.thinkcerca.com), an education technology company that provides teachers with tools and lessons they need to personalise critical thinking instruction.

The Young Entrepreneur Council (YEC) is an invite-only organisation comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship programme that helps millions of entrepreneurs start and grow businesses.

This article was first published on e27 on September 19, 2015.

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Cryptocurrency and Blockchain technologies are disrupting the technology landscape for sure. Right from small businesses to giant multinationals, right from grocery stores to financial institutions, everyone is talking about leveraging blockchain and changing the course of their industry altogether.

Cryptocurrencies that were once perceived to be evil, and were only associated with the dark web, have attracted the attention of almost everyone with the rise in the prices of Bitcoin that happened last year. Now, everyone is betting big on the success of the currencies as well as their underlying technology Blockchain.

Blockchain and Cryptocurrencies are all set to disrupt the stock markets now. While this goal is an ambitious one, it is not very far from reality. Only recently, Wall Street went down from being promising and optimistic to really depressing. What was shocking for analysts and researchers was the fact that the cryptocurrencies closely resembled the behaviour of the traditional financial market.

It is then that the question of the traditional finance market affecting cryptocurrencies and vice-versa sprung up. Another question this leads us to be how much correlation exists between these two markets.

1. Challenging the Dollar Standard

While up until now, the US Dollar was termed and perceived as the reserve currency of the global economy, with the rise in the use of cryptocurrencies, the trend might take a toll. The US Dollar lies at the core of the financial web that is spread all over the world. As an example, the 2008 global financial crisis that started in the US spread like wildfire to other parts of the world as far as Iceland.

This centralisation and the authority of the US Dollar is being challenged, and at the same time, disrupted by the rise in cryptocurrencies. Financial transactions are being decentralised at a rapid pace with the advent of the most popular Bitcoin and about 1,000 other cryptocurrencies.

Also read: Everyone talks about cryptocurrency, but the real hero is blockchain

The dynamics of international trade can be changed once and for all with the help of cryptocurrencies. There always have been attempts to get the US Dollar off its throne, and the rise in cryptocurrencies might be the last nail.

2. Investing in stocks and Crypto-trading

Trading in the cryptocurrencies market fulfils for some people the same purpose as trading in the traditional stock market does. Profit, ownership, and motivation are the three plain reasons why people have been investing in the stock market since forever, and all these reasons are fulfilled by the cryptocurrencies market too.

The investors who love to go global can do so easily with cryptocurrencies. While investing in stocks that are out of your home country is a painstakingly long process, the alternative to it, crypto-trading, might prove to be beneficial for the truly global investors.

Initial Public Offerings have smoothly been replaced by Initial Coin Offerings. Investing in companies that open ICOs is so effortless that it might be preferred over the traditional methods by almost all of the investors in the near future.

ICObench is a company that lists ICOs from about 70 different companies and confirms the fact that stock markets are begin disrupted by the invaders called cryptocurrencies.

Investors today are of the opinion that if the prices of Bitcoins can surge in a week like they did, why can’t the same happen with other currencies and the companies that are leveraging these currencies, too.

It has been easy up until now to ignore cryptocurrencies in all their merit, but soon things are about to change. The world will witness the staying of cryptocurrencies as alternate ways of investing, or maybe, the primary ways of making investments.

Cryptocurrencies are set to affect the real financial market and not just a bit!

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e27 publishes relevant guest contributions from the community. Share your honest opinions and expert knowledge by submitting your content here.

Image Credit: antonprado / 123RF Stock Photo

This article was first published on e27 on April 26, 2018.

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