Decacorn Capital, a Singapore-based cross-border tech VC firm, announced today it has invested in Qupital, a China-based fintech startup. Decacorn joined Qupital’s Series A+ funding round, alongside existing investors Alibaba Entrepreneurs Fund, MindWorks Ventures and Chinese fintech conglomerate CreditEase.

The funding news comes off the back of a US$15 million Series A round in 2019.

As shared exclusively with e27, Qupital plans to utilise the new funds to bankroll its expansion beyond Hong Kong, Shanghai and Shenzhen to other key e-commerce hubs in China, namely, Beijing, Guangzhou, Yiwu and Hangzhou.

Founded in 2016, Qupital is a B2B fintech platform that harnesses big data, blending fintech with e-commerce by using its proprietary credit assessment model to provide short term working capital to Chinese e-commerce merchants selling on Amazon, eBay and Lazada amongst others.

As per a 2019 TechCrunch report, Qupital had processed 8,000 trades, totalling HK$2 billion (US$258 million) in value.

Also Read: How fintech is making credit more accessible for Southeast Asian SMEs

“Besides the razor-sharp and well-demonstrated execution capability of the Co-founders Andy and Winston, it is Qupital’s unique big data analytics capability where we see the real moat,” said Debneel Mukherjee, Founder and Managing Partner at Decacorn Capital.

“We believe Qupital is at its inflexion point, ready to scale rapidly fuelling the working capital needs for the online exporters fulfilling the massive upsurge in global digital online shopping trend,” he added.

“As Qupital is looking to expand our reach in Asia, Decacorn’s strong ties to the local ecosystem coupled with cross-border experience across the US, Europe and Israel, provides us with the resources and connections that we value,” said Andy Chan and Winston Wong, Co-founders of Qupital.

Decacorn Capital’s most recent investments included GridIO, BioCatch and Sixgill.

The firm has invested across different verticals and geographies, from Israel to USA and Estonia besides its home turf in Singapore and in cybersecurity, Artificial Intelligence and big data analytics.

It is also known as an investor in Snap Inc and had exited through the startup’s IPO.

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Peak into the private members club in any city and you will find a room full of lawyers and financiers drinking fine port. Little investment business is done, however. Investors want to place their money in fast-growing startups, not stodgy, conservative law firms. But that’s all changing. With the rise of legal tech startups, investors are hungry for deals in the high growth legaltech sector. 

The smart money pumped US$1.2 billion into legaltech startups in 2019. All of a sudden stodgy law firms are calling themselves legaltechs. But not all law firms with their newfangled tech solutions meet the definition of a legaltech.

Legaltechs leverage technology to deliver more efficient and lower-cost legal services to lawyers, businesses, and consumers. Their goal is to make legal services accessible to everyone.  

The legal and judiciary systems have well-earned their reputations as stodgy. They have traditionally been complex and expensive to use. Facing these barriers, many businesses and individuals have not had fair access to the legal system. Large enterprises pay through the wallet for legal services, while smaller businesses often have no legal recourse if a business partner fails to fulfill their half of the contract. 

If you cannot beat them, join them

The legaltech movement is quickly dis0intermediating traditional law firms. Businesses and individuals have been turning to alternative legal services (ALSPs) to reduce costs. These services perform document drafting, contract management, regulatory compliance, investigations support, and other legal services. Through technological efficiencies, they strip time and costs from legal services. 

Law firms are facing the stark reality that clients now have an alternative to their high billable hours. To compete they, too, are migrating to alternative legaltech services delivery models. As law firms become a major consumer of legaltech, investors are placing the largest slice of their money in legaltech solutions for law firms. 

Also Read: Indonesian legaltech startup Justika raises pre-Series A funding by top law firm

Private equity firms have made the bulk of their investments in contract management and document management startups — among the top three technology adoption priorities of law firms, following eSignatures. 

One-stop legal outsourcing shops

One-stop shops for legaltech solutions have attracted the most money. Clio, a cloud-based legal services portal for lawyers, raised a whopping US$250 million from investors. Over 150,000 lawyers use the software to automate and organise legal documents, handle billing, and manage client referrals. Legal enterprise software firm Onit took in the second-highest investment round of US$200 million last year. 

Remote law services 

As more people transition to remote work in response to COVID-19 confinements, sole lawyer practices are accelerating their adoption of legaltech solutions. The trend towards remote work is pushing lawyers to deliver their services in more cost-efficient ways. In this segment, investors are investing in legal contact management software (Liftify US$50,000), cloud contract management solutions, (Icertis US$115,000), and electronic signatures (Fadada US$55,000).  

DIY law

Individuals are the third largest consumers of legaltech. LegalZoom has emerged as the largest provider of ready-made legal templates for business services, trademarks, and wills and testaments. The legaltech has received US$811 million in funding, including a US$500 million funding round in 2018 led by Francisco Partners and GPI Capital. Investors are sprinkling money on other consumer legaltechs, including online notary Notarize and will creation website Farewill. 

The rise of the AI legal bots

Artificial intelligence (AI) and machine learning (ML) are bringing significant efficiency improvements to legaltech. Very smart algorithms will be a major growth driver for both established and startup legaltechs going forward. With an AI bot, a lawyer can review a contract in 20–90 per cent less time. Investors have backed over a dozen AI legaltechs including ContractPodAI, Evisort, Lumina, Verbilt and LinkSquares.

Corporate legal departments are using these AI legal bots to analyse and synthesise legal documents. The leader Luminance, incubated by mathematicians at the University of Cambridge and used by over 250 law firms, delivers an 80 per centreduction in contract review time and costs.

Also Read: When does your startup need a legal department?

These AI bots also do legal research, patent searches, due diligence, and amazingly conduct client interviews. Josef, a startup founded by young lawyers, has replaced lawyers with chatbots that can conduct client interviews and draft documents. 

Propelled by the high-efficiency improvements, legal community demand for AI legal tech solutions is expected to grow 39 per cent between 2018 and 2023. 

Smarter smart contracts

Bots are getting smarter but they are not as smart as smart contracts. The Alphabit Fund made what could be the most significant investment in legaltech this year. The specialist investment firm in digital ledger technology (DLT) and the blockchain led the investment round in the PAID Network, an advanced smart agreement enabling attorney-free business transactions, litigation, and settlement processes. 

The Paid Network has developed Smart Agreement templates that automatically provide the legal wrapping for contracts. Smart contracts remove trusted intermediaries like lawyers and banks from the transaction. They automatically execute transactions and actions according to the established terms of the contract. A smart contract is executed in near-real-time when the blockchain platform token is deposited, in this case, the Paid token.

With the Paid Network Smart Agreement, parties to an international trade contract can execute a legal clad contract at the same time they execute the payment transaction. Or two counter parties to an over-the-counter (OTC) swap agreement can use the smart contract to remove counter party risk. The Smart Agreement’s escrow account protects both parties.

Legaltech meets fintech

Financial institutions with high volume transactions can reap significant time and cost savings from automation. JP Morgan has been a big beneficiary of legaltech. The investment bank is using legaltech to manage counter party risk in credit agreements, and soon credit-default swaps and custody agreements. In the global OTC derivatives market, counter parties had USUS$2.4 trillion in credit risk exposure in 2019. 

JP Morgan Chase, a top-four bank dealer in the swaps market, was seeking a more efficient process for analyzing its 12,000 credit agreements a year. The solution? The investment bank built its own intelligent document management software called COIN (Contract Intelligence) to slash legal costs. The efficiency gains are nothing short of astounding. In seconds, COIN can process contract volume that previously took 360,000 man hours. 

Also Read: What tech startups need to know about the legal aspects of online marketing

A smart contract has the potential to do even more at a faster rate. The beauty of a smart contract is its simplicity. Any number of functions can be simultaneously performed in near-real-time. The PAID contract, for example, also incorporates the upfront negotiation and arbitration processes, should a dispute arise. A reputation scoring system helps reduce counterparty risk. 

The Paid Network is a parachain (blockchain platform with its own token) on Chainlink. As such, it can run all the above services in parallel with services of over 100 parachains. All of the aforementioned functions of legaltech solutions can be wrapped into one smart contract. 

Paid Network is the only blockchain legaltech startup to receive funding to date. That’s surprising given the additional business risks mitigated by digital ledger technology. DLT transactions are transparent, trackable, and irreversible. 

Following their investments this year, legaltech on the blockchain is poised to be the next hot legaltech investment sector. All major companies across all industry verticals are adopting blockchain business solutions. Ninety-one percent of businesses plan to improve business performance by adopting blockchain solutions, according to the Deloitte Global Blockchain survey. The legal industry, however, has been slower to catch on to the paradigm shift in business transaction management underway.  

Many companies are already conducting trade, commerce, and financial transactions with smart contracts. Like the mainframe, the legal industry will need to adopt more efficient technology-driven platforms. The legaltech model is well suited to run on digital ledger technology.

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A crisis also brings opportunities. Changes unfolding in the global economic landscape with COVID-19 have leaders re-evaluating growth strategies and business models, all conventional ways to work have been put through the grinder; we’re seeing the emergence of a new normal.

The financial sector has stumbled upon a hitch, as fund managers find it difficult to raise money for a first or final fund close. For those with dry powder, the challenge to wisely allocate funds, appoint a new team or go with an existing team is seen rising.

Investors across the globe share the belief that due diligence (DD) forms the most critical component of an investment process. Agnostic of the type of financial organisation– VC or PE fund managers, family offices or institutional ones, DD is a key process followed before investing in a fund or company.

The process of DD has multiple facets such as investment strategy, target markets, financial, legal, business, reference checks and more. Pre-pandemic, the process demanded on-premise and in-person engagements, which could go on for weeks, if not months. For example, an investment in a manufacturing company involved physical meetings at the production facility.

In sustainable agricultural technology investments it was standard DD to meet the different value chains and local producers, to review utilisation of the technology in real-time. These meetings were followed by interviews and more meetings with the staff and other investors, checking internal systems, processes and technologies.

Why? The findings and impressions gained during the DD stage can make or break a deal and can be the difference between investors making money or losing everything.

Also Read: Due diligence meets imagination: How SGInnovate plans to further support the deep tech ecosystem

Changing the course

Cut to the pandemic era, financial organisations now have to adapt to the new rules of due diligence. Futuristic investors and fund managers see an opportunity in revitalising investment due-diligence processes and infusing technology to weed out the inefficiencies. Communication tools such as Zoom, Microsoft Teams, Google Meet, and others are already par for the course; they were here before the pandemic and certainly will outlast the pandemic.

Platforms such as Dropbox and Google Drive find more user reliability instead of tracking documents on emails. These widely used tools help create easily accessed cloud content, collaborate remotely and share heavy files, enabling the due diligence team to gather information and insights fast, easy and effectively.

In addition, improvements in data management, records digitisation and videoconferencing technology, help one to carry out effective due diligence reviews virtually. This has worked well for VC funds who have seen increased interest from institutional investors, and who want to show that they can continue to invest capital in promising companies in a pandemic world.

A study by Omers Ventures of 150 VCs across the US, Canada, the UK and the rest of Europe shows that just four per cent of VCs are opposed to undertaking remote deals. Among the 96 per cent of VCs open to it, 42 per cent said they are willing to make changes to their processes to enable this. Interestingly, 40 per cent of the VCs surveyed said they had already done a fully remote deal, while 60 per cent are yet to do so.

With the practice of virtual DD, physical engagement can be kept to a minimum or eliminated entirely or undertaken only if absolutely required. 

How to go about normalising remote due diligence

There is no one shoe fits all practice to take this forward. VC funds address virtual DD in multiple ways as they focus on closing their pipeline of deals. In instances, relationships have been established with founders through meetings and conversations that have been going on for months, much before COVID-19 struck, and term sheets have already been signed. Closure of these deals has been relatively easy, as evidenced by the continued global flow of VC capital in Q2.

Also Read: Due diligence meets imagination: How SGInnovate plans to further support the deep tech ecosystem

With others, initial conversations have been fruitful, but final DD and signatures are pending. VCs are actively leveraging partners in the areas where these potential investees operate to drive some level of due diligence. Backchannels and talking to third parties were always an important driver for insights and this has further increased.

Further what simplifies the DD process is connecting with previous investors or funds who have already entered in the investment. Some VCs and other investment firms have, during the pandemic, done approximately 30 per cent of their due diligence remotely. Virtual tours have helped provide facility tours.

The quantum of discussions with founders has increased both at the individual level and in groups. Founders are also being encouraged more to connect across the network — with funds, entrepreneurs, and accelerators — in their local region. Remote DD has shown the critical role technology plays now when making an investment decision. References and testimonials apart, technology is the main driver of remote due diligence processes today. And from the looks of it, will continue to be so going forward.

Just Zoom meetings are insufficient to entirely conduct DD when mobility is hampered. Potential investees are working hard to help potential investors find ways to visit their factories, offices or warehouses and see first-hand what’s happening, how employees are engaged, how much stock they have and gather other information that will help the deal move forward.

Dependency on co-investors too has increased. Founders are under even more pressure to come with strong references. The increased emphasis on client checks is encouraging portfolio firms to try out the products or services of the companies under due diligence.

Be wary of betting on the wrong horse

DD is a multi-fold process and may not be always contained within set timelines. The current situation may lure investors to make mistakes. Lack of performance can be disguised under the pandemic, and going just for the supposedly “winner” sectors during COVID-19 may result in an expensive and simplistic approach, where you bet on the wrong horse.

Also Read: The hidden side of fundraising: how due diligence can make or break your deal

The fact that you’re conducting remote due diligence should not relax the depth of the analyses. If anything, there are now new scenarios to play with, new indicators to look at, to see if we’re in front of attractive investments or not. The good news? It all can be done remotely.  

Business continuity is the ultimate goal

In the current situation, where travel is significantly restricted, if not impossible, not institutionalising remote due diligence will limit business progress. Of course, having a large, well-dispersed team with deep industry relationships can be an invaluable advantage in the current environment. Nimbler investors who can harness the power of technology and couple that with a well-tentacled network may be at a significant advantage as they will draw on local capabilities to maintain due diligence processes and capture new opportunities.

Investors unable to draw on such resources will need to outsource parts of their process to trusted third-party specialists. The pandemic and the challenge that it imposes on due diligence should therefore not be an excuse to let the baton slip. It should be the catalyst that enhances scrutiny by utilising technology to further augment existing processes.

Undoubtedly, the process now takes longer; it involves far more scrutiny. A simple thing that spoke volumes during normal times, which VCs now miss, is picking up on nonverbal cues when interacting with people or teams in person. Zoom calls cannot compensate for this. A few investors will, nevertheless, prefer waiting it out till the pandemic is over.

That may just turn out to be a long wait. And there are too many challenges in the world waiting to be solved through companies using innovative technology. The investing world cannot grind to a halt.

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With Singapore and Jakarta occupying two of the top 10 spots for cities with the highest VC investments in 2019, it is safe to say Southeast Asian startups face no shortage of funding opportunities.

However, the pandemic has thrown a spanner in the works. According to reports, though median exit deal size in the region rose from US$5 million in 2019 to US$27 million in H1 2020, the average top investment amount fell from US$242 million in 2019 to US$77 million in the same period this year.

This decline could point to stalled deals as VCs struggle to carry out the necessary due diligence because of the movement restrictions imposed regionally.

Despite that, Jungle led a US$10 million Series B funding round in Betterplace, a Bangalore-based tech platform for blue-collar workforce management.

David Gowdey, Managing Partner of Jungle Ventures, shared in an interview with e27 that due diligence for the deal was conducted virtually, adding that it would represent a new normal for conducting future investments.

Below are the edited excerpts from the interview.

Which of the companies within your portfolio have the potential to become a unicorn in the next few years?

As we invest in India and Southeast Asia, we have Livspace and Moglix within our portfolio that are on track to be unicorns.

Founders usually don’t think about building a business just to get to a billion dollars or an arbitrary valuation number. It takes a long time to build a unicorn. Some companies would get there faster while others would be slower. It depends on the market that they’re in, but it usually requires several years to get there.

Also Read: Why David Gowdey of Jungle Ventures believes exits should be led by founders

We closed a US$100 million fund in 2016. Even the early investments out of that fund, it’s just been four years and these are mainly Series A and pre-Series A type of investments. So it takes time for these companies to grow into unicorns.

In Southeast Asia, there is definitely a cohort of businesses that you’ll start to see hit that billion-dollar valuation over the next one to two years. There’s the first cohort of companies which were founded between 2012 and 2014 which have become unicorns — the likes of Grab, gojek and Traveloka. The next batch should be joining them soon.

For companies turning into unicorns in the next one to two years, what do you think should be their preferred exit strategy?

As you get up to a billion dollars in size, the pool of buyers gets smaller. For example, if you’re a company that has a US$500-million valuation, there would be numerous companies that have a balance sheet that could afford that acquisition.

However, if you’re a US$15-billion company, the number of companies with the financial capabilities to make the acquisition is obviously fewer. Therefore, the larger you get, the more you would angle towards the public markets.

I do still think you’ll see a mix of both trade sales and IPOs. If you are a regional industry leader and there are similar businesses in the US and China that don’t have a presence in Southeast Asia, you will naturally be of M&A interest as they look to expand into the region and solidify their position as the market leader here.

A Peter-Thiel backed special purpose acquisition company (SPAC) recently filed to go public and is seeking to buy a Southeast Asian company. Does this signal the arrival of SPACs into the region?

SPACs have obviously been around for a long time, and a SPAC itself is nothing new. I do think it’s interesting to think about more regional companies listing in the US.

Sea Group has performed incredibly well. They are up nearly 4x this year and it’s been a great business to trailblaze Southeast Asia into US public markets. You need to be of a certain level of scale before you can think about listing on the US and a SPAC is no different.

Also Read: What does Peter Thiel-backed Bridgetown’s IPO mean for SEA’s startup ecosystem?

In my opinion, a SPAC is still going to need to find a business that is going to be appealing to US-based investors. It probably needs to be over a billion dollars in value for it to be sizeable enough to attract sufficient interest to have the desired liquidity.

As primary hubs for VC funding remain in Singapore and Jakarta, do you think we will see other parts of the region growing their venture ecosystem?

Singapore and Jakarta indeed remain the top two regions for VC funding. There’s a very robust venture ecosystem in Jakarta with a lot of Indonesia-focused funds.

On the other hand, most founders in Thailand, Vietnam, Malaysia and the Philippines are coming to Singapore to meet VCs. Meanwhile, the Singapore-based funds are going to Jakarta to meet Indonesian companies.

With regards to future developments in the regional venture space, there are some government initiatives to grow the deals landscape in Malaysia and Thailand. I do hope that there will be VC ecosystems forming in these countries, together with Vietnam. Ultimately, it takes time.

Also Read: 37 VCs to invest US$800M+ in Vietnam’s startups over the next 3-5 years

What are some future trends we can expect within the venture space as we move into 2021?

You will see some more companies from Southeast Asia go public as this would represent a natural path for the likes of Grab, GoJek and Traveloka.

More than that, there is a group of unicorns in Southeast Asia which have reached the “tipping point” in terms of their size, scale and maturity of the business. Some of them should start to think about going public. I would expect that over the next 12 to 18 months, we’ll see at least one more IPO come out of this region.

What are your investment plans for the next one to two years and what are the sectors you have your eye on?

We just closed an investment with Betterplace and all of the due diligence for that investment was done virtually. We’ve had to adapt our investment process to accommodate for the pandemic and have proven to ourselves that we’re capable of doing that. Therefore, even if we can’t get on a plane and travel, we will continue to make the right investments.

At Jungle, we tend to focus on two large categories — software and consumer consumption. Software is one of the industries that hasn’t been impacted much by the pandemic. Therefore, we will continue to be one of the strongest investors in software going forward.

For consumer consumption, we are seeing more consumers going online and they will increasingly transact through digital channels. Therefore, it could path the way for both e-commerce and direct to consumer (D2C) brands to grow.

We have also observed that second derivative beneficiaries of the e-commerce boom — payments, consumer credit and logistics — have seen a natural tailwind arise from the pandemic.

In essence, I don’t think our investment focus will shift or change due to the pandemic. We’ll stay consistent around consumer consumption and software verticals.

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Image Credit: Jungle Ventures

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Singapore-registered FinAccel has promoted deputy CEO Umang Rustagi as CEO of its Indonesian digital lending platform Kredivo.

Current Group CTO Alie Tan will be taking over as CEO of KrediFazz, the group’s new P2P business unit.

These are part of a series of top management changes that FinAccel has announced recently.

Joining Rustagi in the C-suite of Kredivo will be Valery Crottaz as its COO and Paramananda Setyawan as Chief Data Officer.

Akshay Garg, current CEO of Kredivo, will be moving to a the role of Group CEO, who will be supervising Kredivo and KrediFazz.

Rustagi and Tan will continue to hold concurrent responsibilities as Deputy-CEO and CTO of FinAccel group, respectively.

The changes will be effective from the start of 2021.

Also Read: Why P2P lending can be the end of banking as we know it

FinAccel said in a statement that these changes reflect a streamlining of the group structure to better serve its vision of serving 10 million customers by 2025.

Under the new structure, Kredivo, which operates under the MFC license, and KrediFazz, which operates under the P2P license, will have different focus areas.

As part of this realignment, KrediFazz will target to expand its coverage of productive loans from 35 per cent to a target of 50 per cent over the next two years, focusing on serving the under-served and marginalized segments of society.

Also Read: How fintech can help reach the unbanked and underbanked in Southeast Asia

Garg, Rustagi, Tan, Crottaz and Setyawan said in a joint statement: “We are on a once-in-a-lifetime journey to expand access to financial services to under-banked and under-served segments of Indonesian society. With these changes, both Kredivo and KrediFazz are better placed to scale, while allowing the FinAccel group to push into new areas of innovation.”

FinAccel is company backed by Mirae Asset, Naver, Square Peg Capital, MDI Ventures, Jungle Ventures, as well as several other investors.

Last month, Kredivo — which provides instant credit financing to customers for purchases on e-commerce, offline and cash loans, processed based on real-time decisions — secured a credit line funding of US$100 million from US-based investment company Victory Park Capital (VPC).

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Image Credit: FinAccel

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Shopavision has announced the launch of what it claims to be Singapore’s first live-streaming e-commerce platform, with a S$500,000 (US$374,000) in seed funding from an undisclosed angel investor.

As per a press note, the money will go towards growing its team, enhancing its platform, as well as to launch in Singapore.

The startup also announced that it is officially launching its mobile app to cater to the growing demand for live streaming amidst the holiday season.

Also Read: Is Southeast Asia ready to give birth to interactive e-commerce platforms like Pinduoduo?

Shopavision — started by Founder and CEO Rachel Pang, who was inspired by the widespread penetration of live streaming in China — aims to be the one-stop platform for live streaming shopping where both merchants and customers can enjoy the benefits of live stream commerce.

Users can choose to buy products instantly within the live stream or add to cart and make payment directly via payment modes — credit cards, PayNow or e-wallets GrabPay and RazerPay, without leaving the stream.

Its platform also offers interactive live streaming features, audience profiling and data analytics among others, helping merchants optimise and improve sales.

A professional suite of related services (such as live stream hosts, studios, production, campaign management, marketing and media for retailers to engage) are also available on the platform.

Also Read: Humanising customer experience is the best way to build loyalty in a post-COVID-19 world

Before the launch of the app, Shopavision claims to have generated more than S$60,000 (US$44,900) in sales and conducted more than 60 live stream shows on its Facebook page for its clients.

The firm has close to 30 live stream hosts and a variety of merchants on its platform. 

A recent study commissioned by Shopavision found that 90 per cent of people in China consume live streaming content as compared to 15 per cent in Singapore.

“Consumers are no longer just browsing through product descriptions, but they are now actively participating in the buying process. They can ask questions, get responses live and get entertained by live streamers, from the convenience of their homes. Live streaming is the future of online commerce,” said Pang.

“We want to build an ecosystem that supports the merchants and create opportunities for people to become live stream hosts, especially those whose income has been affected by the pandemic. This could become a second career for them,” she added.

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Image Credit: Shopavision

 

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Malaysian used car e-commerce firm Carsome raises US$30M Series D; Investors are Asia Partners (lead), Burda Principal, Ondine Capital; The company will use the funds to strengthen its C2B and B2C offerings; It claims currently it is transacting an annualised 70K cars totalling US$600M in transacted value across Indonesia, Thailand, S’pore, Malaysia. More here

Sea Group to raise about US$2B in stock offering; It plans to offer 11M ADS, with the option to sell another 1.65M; Sea, a games company that has expanded into e-commerce, has surged to a market valuation of US$100B with its shares rising more than 400% this year alone. More here

Will a Grab-gojek merger benefit consumers? Experts are divided; One expert says the merger is unlikely to create a monopoly as these two companies are based in different countries; Another says consumers will be disappointed as the merger means there will be no significant competition left and the prices are likely to go up. More here

A tale of two IPOs: How DoorDash’s IPO makes Uber and Airbnb’s look better; Airbnb and DoorDash may seem similar at first glance; Both are hot consumer tech companies valued at around US$30B, competing against larger companies valued at around US$85B; However, there’s a big difference between the two; DoorDash’s tremendous growth and market share gains don’t seem defensible in the long run. More here

Remember the under US$1,000 wind turbine? It has now become sleeker, quieter, more efficient; Avatar claims to have the world’s lowest startup speed for a 1kW Horizontal Axis Wind Turbine with just 1.4 m/s wind speed required; This is less than half of what was needed earlier and still applicable to most other wind turbines in the market. More here

Vietnam to have 12 ecosystems with revenue of US$100B, says McKinsey; The 12 large ecosystems will be established across retail and institutional services by 2025; Ecosystem growth will be essentially driven by a significant decrease in the cost of customer acquisitions. More here

BNPL services company Rely secures US$75M credit facility from Polaris; Its goal is to scale operations and forge partnerships with major retailers in Singapore, Malaysia, Korea; Rely currently partners with Qoo10 to offer BNPL services on its e-commerce platform. More here

Access Ventures secures US$30M for Fund II, aims to hit final close by Q3 2021; LPs are Korea Venture Investment, Octava, Line Ventures, Mahanusa Capital; Fund II has made 10+ investments across SEA, including Indonesia’s Akseleran and Vietnam’s Godee. More here

Thai proptech startup FazWaz raises funding; Investors include CAV Investment, 500 Tuk Tuks, Aries Capital; The startup has over 500K customers per month; FazWaz provides brokerage services to make the process of buying, selling, renting a property easy; It also has ops in Cambodia. More here

Livestream-focused shopping app Shopavision launches in Singapore with a USD$374K seed fund; Before the launch, the app claims to have generated more than SGD$45K in sales and conducted more than 60 livestream shows on the its Facebook page and for their clients; The app currently has close to 30 live stream hosts and a variety of merchants onboard. More here

NextBillion.ai crowned as champion of the SLINGSHOT 2020 deep tech startup competition; It builds hyperlocal solutions for emerging markets where language and geospatial infra can be more complex and unique;
UK-based Gyro Gear and Keyless Technologies are named runners-up; SLINGSHOT2020 was organised by Enterprise SG. More here

Singapore invests US$9M into programme to grow local blockchain ecosystem; The initiative will engage close to 75 companies to conceptualise 17 blockchain-related projects within the next 3 years in sectors starting with trade and logistics, and supply chain; It will also support blockchain interoperability. More here

Singapore-based C-suite raises six-figure seed funding; It is an O2O learning platform for current and aspiring executives; C-suite positions itself as an exclusive community hub, a social network, a news and views forum and a recommendation engine; The platform claims to have attracted nearly 200 high-profile members so far. More here

eKYC platform WISE AI secures pre-Series A from Sun SEA Capital; The startup uses AI to e-verify customers when onboarding them for financial services and beyond; The money will be used to bankroll its expansion across the region; Its clients include FIs, fintech firms, credit rating agencies and governments. More here

Nokia study confirms 5G as 90% more energy efficient than 4G; The rollout of 5G networks is set to increase traffic dramatically making it critical that the energy consumed does not rise at the same rate; 5G networks, however, requires further action to enhance energy efficiency and minimise CO2 emissions that will come with exponentially increased data traffic. More here

Antler, EF and 500 Startups join ESG’s Startup SG Founder programme; The Startup SG Founder programme provides mentorship and early capital to first-time entrepreneurs with innovative business ideas; In Aug, the government announced the setting aside of an additional US$112M to enhance the programme, along with a new 3-month venture building programme. More here

COVID-19 has little impact on hiring in fintech sector, says report; The imminent launch of digital banks is largely perceived to be a boon for the talent pipeline; More Singaporean fintech firms are focussing on hiring local talent; The survey was conducted jointly by the Singapore FinTech Association and PwC. More here

Why SEA’s VCs should shift their attention to niche sectors and supporting industries; The advantages of this are companies in the main sectors might be interested to acquire these businesses; There are opportunities to build partnerships with main sector leaders and leverage their financial resources so we don’t need to spend substantial money on convincing/ winning consumers. More here

Why the future of work in Singapore is remote; Remote workers are reportedly 35% more productive than their onsite colleagues; This is one obvious benefit from the time saved during the commute to the office; But other factors that explain the productivity boost include fewer workplace distractions and a more comfortable work environment at home. More here

This Singapore startup made a ‘passport’ for COVID-19 test results so you can travel seamlessly; Digital Health Passport enables healthcare providers to easily issue digital test results in a secure and tamper-proof way, which are then automatically made available to individuals on the mobile app. More here

Don’t break the bank: Enabling financial inclusion and equity through tech; One of the greatest factors causing financial exclusion is the distance between rural areas and bank branches; The advent of smartphones and digital financial apps have been a game-changer, making the need for physical proximity less relevant. More here

WASTE 20/20 winner Magorium shares how it intends to save SEA with its plastic recycling solution; Magorium aims to solve the converts plastic into polymers, which are then used to produce high-quality bitumen used for road construction; Its tech can recycle a wider range of plastic types and incorporate a higher percentage of it into the roads. More here

I Squared Capital acquires, merges two Singapore-based cloud services firms; The combined businesses are poised to become a leading cloud migration and managed services provider in SEA and India, providing capability across all major public cloud operators. More here

Where’s XR at today and what does it mean for your company?; The future of the industry relies on its ability to live up to the promises that XR can save companies time and money, accelerate processes, measure engagement, bring people together in unique and memorable ways, and create new revenue streams that don’t only justify costs but proportionally outweigh them. More here

Mastercard, Pine Labs plan to expand BNPL solution in SEA; This will offer consumers the flexibility of zero-interest instalments on purchases, expand business for merchants and connect banks, fintechs, payment gateways and device makers to a rapidly growing financing alternative. More here

Singapore and Thailand to link national payments infrastructure; Cross-border remittances between the two countries will become cheaper and faster with the linkage of Singapore’s PayNow and Thailand’s PayPrompt; The programme will start off with a small group of banks on both sides, and will scale up to include more banks and non-bank providers over time. More here

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Image Credit: Sea Group

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SolarHome, a Singapore-based company that brings pay-as-you-go solar solutions into off-grid households in Southeast Asia, announced today that it has raised US$2 million in a Series A extension round, led by existing investors TRIREC and Insitor Impact Asia Fund.

New investors such as Anthem Asia Myanmar SME Venture Fund and DPI Energy Ventures (renewables-focused investment funds in APAC), besides FORUM, also participated.

The newly-raised capital will be used to scale SolarHome’s solution, as it pushes towards the next stages of growth of offering its product to a much larger customer base.

“The new capital has enabled us to bring operations closer to EBITDA breakeven since the beginning of this year despite a very challenging environment,” said Geert Jan Ten Hoonte, CEO of SolarHome.

Also Read: Solar energy startup SolarHome secures additional US$1M from Trirec

Founded by FORUM, a Singapore-based fintech venture builder, SolarHome offers off-grid households a solar lighting system at a low-cost 24-month subscription plan, with an initial US$10 down payment, followed by daily, weekly, or monthly repayments through scratch cards or mobile money.

The technology built into the system ensures that it won’t function if a payment is not made, giving lenders the confidence that they will be able to recover their investment.

The company estimates that it eliminates 140kg of carbon dioxide emissions per year and 1.45kg of black carbon, which are crucial in battling greenhouse effects that is crucial for global warming.

Since its founding in 2017, SolarHome has bagged several investment rounds from notable investors. These included a US$10 million in debt funding from a consortium of international investors, including Crowdcredit and Trine in 2018.

This was followed by a US$1 million for equity funding from TRIREC in 2019. Previously,  it has also raised three rounds of fundings.

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Image Credit: SolarHome

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With everything that has happened in 2020, it is easy to be discouraged by the future prospect of the MICE industries in the Southeast Asian (SEA) region and beyond.

In his opinion piece as published by Channel News Asia, Dr Prem Shamdasani, an Associate Professor of Marketing and Academic Director of the Executive MBA at NUS Business School, even noted that both the supply and demand side of this industry have “literally evaporated.”

Despite the outlook, Dr Shamdasani pointed out that some major global events have resisted the idea of converting into online platforms –a trend that has gained momentum during the pandemic. One of such events is the World Economic Forum’s Davos conference.

In December, as if his predictions have come true, we received two updates that had helped to improve the mood for the holiday season: That major global events are moving its venue to SEA countries next year.

The first one of such event was RISE which was dubbed by various media platforms as the largest tech gathering in Asia. For the past five years, the event has been held in Hong Kong. But Co-Founder and CEO Paddy Cosgrave announced in a press statement that the organisation has agreed to a three-year partnership with Malaysia Digital Economy Corporation (MDEC) to host RISE in Kuala Lumpur, starting from March 2022.

“This is not a goodbye to Hong Kong. We hope to return to the city in future with a brand new event,” Cosgrave stresses.

Shortly after that, beyond the tech startup community, the World Economic Forum announced that it is moving its annual forum from Davos, Switzerland, to Singapore in May 2021. This move was strongly related to the ongoing pandemic as it would be “challenging to host the event safely in Europe.”

As detailed in this CNBC report, this is only the second time the event was held outside of its original venue and the first that it happens in Asia.

Also Read: The future of events with Mind The Product CEO James Mayes

So what does this mean for us?

If anything, this indicates that SEA remains a powerful and promising market.

Throughout the pandemic, there has been various discussion on the future travel industry –particularly when and how we are going to bring it back, if ever. Travel tech giant Booking.com stated that even if COVID-19 vaccines are being distributed widely, it will take years, instead of quarters for the travel industry to recover to pre-pandemic 2019 level, as quoted by South China Morning Post.

While it is impossible to deny the impact that the pandemic has on this region, that businesses across different industries are struggling to survive even now, there are also businesses that manage to do well in this challenging time. And this includes companies in the MICE industries.

Mummys Market, the organiser behind the leading baby products fairs in Southeast Asia, explains to e27 on how a pivot to digital platforms had managed to not only save their business but also helped it grow.

“To adapt to this [situation], we decided to accelerate our seven-year plan to be implemented within one year, quickly shifting to a digital model to continue meeting the needs of our customers. Although this was a big change, we chose to reskill our existing staff to fit them into their new roles instead of displacing them,” founder William Chin writes in an email.

“With the efforts of our rigorous and tenacious team, we successfully launched Singapore’s biggest online baby fair in May 2020. What we have achieved in terms of personal and professional growth from our learning experiences across this year is what we would have taken years to learn under normal circumstances,” he continues.

Chin also states that the company’s revenue has increased “dramatically” following the transformation. But it does not mean that Mummys Market will be a fully online platform in the future. In addition to launching its first-ever retail outlet in November at Suntec City, it also plans to bring back its customer events, once the situation permits.

“Naturally, these will be held according to the safe management measures from the authorities, and we will ensure that we have implemented density and incident management processes that are in compliance with the government guidelines,” Chin concludes.

Also Read: The future is hybrid: What will events look like post-COVID-19?

Beyond individual businesses, the fact a major global event is going to be held in Singapore as early as May next year indicates that perhaps things can recover a little sooner. That this event will become a trigger to bring back the travel and tourism industries. That we can have hopes and see it manifests.

Last but not least, perhaps this is a sign that the world as we know it has not completely disappeared. There were times when we thought going to conferences, speaking on stages and building connections had become a thing of the past. But perhaps, in the next one to two years, we will be able to meet old friends and acquaintances again at these events.

There will certainly be adjustments, but I believe it is safe to keep our hopes up.

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Image Credit: Stephen McCarthy/RISE

 

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Palexy, a Vietnamese startup that provides actionable data to help improve the performance of brick-and-mortar retailers, has bagged US$1 million in a funding round led by Access Ventures, with participation from Do Ventures.

The startup will use the money to grow its team, fine-tune products, and expand the business across the region.

“We will expand our business to Southeast Asia, Asia and the Middle East in 2021,” Founder and Chairman Thong Do told e27.

Palexy was started mid this year by Thong Do, Minh Truong (co-founder and CTO), and Duc Nguyen (co-founder and Chief Data Engineer).

Also Read: Access Ventures secures US$30M for Fund II, aims to hit final close by Q3 2021

The trio started the venture to bring two missions together: to put the technological potential of Southeast Asia to use, and shake up the retail market.

“When I talked to many frustrated business owners in the region, I got the feeling that they still wanted to grow and improve but they have simply exhausted all available options. I wanted to show them that with the help of technology, there is still a lot of room for progress,” he said as he described his startup journey.

If you look at e-commerce, the industry is thriving because it makes use of online user data to incessantly optimise its processes. “We, at Palexy, could help retailers achieve that level of success with real-time data generated from consumers. With our solutions in place, our clients could break ceilings they were not even aware of,” Do said.

In a nutshell, Palexy aims to empower retailers to optimise their customer in-store experience and operational efficiency using Artificial Intelligence and Computer Vision technologies.

“If you are the owner of an e-commerce company, you can log in to see all the data points such as the number of visitors (per day, week, month or year), the timing and duration of their visits, and the keywords used to lead them to your site, etc.,” he said.

“But if you run an offline store (for example, a clothes retail shop), all you will see at the end of the week is nothing but the point of sale (POS) data,” he elaborated.

Also Read: How your shopping habits are shaping the future of retail in Singapore

This is where Palexy comes in handy as it brings in e-commerce-like actionable data to help offline retailers perform better.

Digitalising everything

“Data analytics is where offline retail is substantially falling behind and losing the battle. What offline retailers need is a full package technology solution that allows them to see the big picture as well as their online competitors,” he said.

“We crack this problem with our AI-powered SaaS tools that digitalise everything: every customer touchpoint, every interaction and every in-store process. We take into account all available data sources (such as surveillance camera feeds, POS data, promotion calendar and even weather data) and convert them all into actionable analytics dashboards,” he elucidated.

Palexy mainly offers three SaaS products:

Store Optimiser, which analyses the in-store sales funnel to help retailers improve their operations;

Store Wizard, a virtual shopping assistant which automatically identifies return customers as soon as they walk into the store, their shopping history and preferences. This helps the sales assistants a lot with providing excellent services, especially in high-end stores;

Store Supervisor, which acts as a dedicated security guard, monitoring the store 24×7, detecting abnormal behaviours or frauds and then alerting the staff in real-time.

Palexy’s products are currently used by more than 30 retailer clients in Vietnam and Japan, including brands such as PNJ (jewellery retailer), Guardian (a leading company in beauty and personal care), Viet Thai International, and Aldo Shoes & Accessories Franchisee, Hakuhodo & Square.

Future plans

According to Do, digitising physical stores to optimise their operation is just the first step of Palexy’s product vision. Ultimately, he added, its AI tools would help connect the physical world with the online world, enabling true omnichannel retail.

“The thing is that while shoppers still prefer brick-and-mortar stores in general, the majority of them like brands that have both an online and offline presence. That allows them more options and flexibility,” he said.

“The shopper analysis tools we offer are especially useful for retailers that fit that description. Data taken from the online channel could benefit the offline stores’ operations and vice versa, empowering the retailers tremendously,” he further shared.

Also Read: Top 5 skills needed to carve a niche in big data

For example, when a brand runs a digital marketing campaign, Palexy’s technology can help measure the effectiveness of that campaign in the stores, both quantitatively and accurately.

In yet another use case, by using Palexy’s tools to analyse the demographics of in-store purchasers, the client can identify the demographics of the buyer group that has the highest conversion rate.

“Using these insights, the client can design a promotion campaign that is specifically tailored for that customer group, driving higher conversion for the e-commerce channel,” he said.

A serial entrepreneur, Do previously built Arimo, a Big Data company based in California, which offers Data Science as a Service for global enterprises. The venture managed to raise over US$13 million from VCs such as Andreessen Horowitz before being acquired by Panasonic in October 2017.

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Image Credit: Palexy

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