As Southeast Asia sees an influx of economic and technological growth, the need for human capital development is becoming increasingly critical. Schools across the region are racing to address this training gap— attempting to innovate their curricula, to expand their classroom capacity, and to scale their reach.

But enabling education for everyone is difficult. Schools need help. Adding instructional capacity and improving facilities require significant investment. Enrolling new students is even more daunting, as many families do not have savings sufficient to pay for years of school.

The problem is a mismatch of cash flow timing. Schools need the money now to reinvest and expand. Students and their families only receive income after graduation. The solution requires affordable credit.

Financing has always been the key barrier for enrolment and retention and is a top-of-mind issue for schools. Otherwise, students, who need education the most are left without options, and the seats in the physical (and virtual) classrooms are left empty. 

Fintech platforms are the ideal partners to help schools address this issue. Through collaboration, fintech platforms can help schools drive their three main goals: expansion, efficiency, and equity. 

Expansion and scale to reach more students

As schools scale their operations, the biggest limiting factor is their ability to redeploy their cash flows. Capacity planning is challenging when enrolment numbers are unpredictable, due to a significant portion of students deferring payments or dropping out.

Schools are in a predicament. Operating costs cannot be deferred, and investing in teachers, classrooms, and campuses is costly. Fintech can address this timing mismatch. 

By providing affordable lending solutions to students, fintech provide schools with the predictability needed to expand. They no longer worry about students dropping out due to affordability issues because the balances for the semester have already been paid.

Also Read: HarukaEdu offers affordable, accessible and social online education

As more students remain enrolled, schools become better positioned to invest for long-term growth and for improvement of instructional capacity. 

Efficiency and focus on core educational services

The early version of education financing in Southeast Asia was run in-house by schools. These schools provided deferred instalment plans, and was a shared function across the schools’ finance, student recruitment, and scholarship functions. 

Given the increasing financial challenges of many students, however, schools have seen these internal financing plans take up a large portion of their balance sheets. The complexity magnifies as the number of students adds up: collections, financial risk management, and asset-liability management are all cumbersome for a school to run in-house. 

Fintech platforms are the perfect partners to address this issue. Schools, no matter their size, are better off focusing on core education services rather than operating as financial institution. By offering the expertise of tech-enabled underwriting, loan management, and collections, fintech can run this process more effectively and efficiently.

Schools can go one level deeper to address these affordability barriers. Through tighter fintech partnerships, they can commit part of their balance sheet (whether in the form of interest-free or subsidised loans), while letting their fintech partner manage the operational aspects of lending.  This arrangement allows schools to provide affordable, quality education to more students.

Equity and access to those who need education the most

Students in the lowest income households are those who can benefit from education the most. This segment is where willingness to enrol is the highest, but the capacity to pay is low. They often do not have access to traditional credit, and savings are limited. Especially not enough for four years of schooling.

This phenomenon is why only a third of youths in Southeast Asia manage to enrol in higher education, and less than half of them graduate on time (if at all). Schools do want to help because providing access to these students bolsters enrollment count, drives up tuition revenues and supports their mission of educating future generations. But they have no capacity or expertise to finance the two-thirds of un-enrolled youths in Southeast Asia, at least not alone.

Here’s how fintech platforms can help. The payoff of education is back-ended, but has tremendous lifelong value. Fintech platforms can provide that bridge to get students through their multi-year journey. Affordable lending can correct the timing mismatch of the tuition cost and eventual employment. By bridging the timing gap, these partnerships can improve equity and access in the education system.

Also Read: Brick bags seed funding from Antler, 1982 Ventures to expand its fintech API platform

Fintech will make ‘education for everyone’ a reality

The future of education in Southeast Asia will be powered by fintech. Developing human capital to support the region’s evolving economy requires educating everyone. We need to find ways to broaden educational access for over 60 million new students—those who traditionally cannot afford to go to school. 

The case for affordable education financing is clear: schools can expand and reach more students, and every student can receive access to quality education.

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Leap Finance, an Indian edutech platform focused on overseas education, has raised US$17 million in Series B funding, led by Jungle Ventures.

Sequoia Capital India and Owl Ventures also participated in the round.

As per a press note, the fresh funds will go towards expanding its product offerings and strengthen technology and business teams to aid geographical expansion.

Leap Finance will also look to establish global offices in undisclosed locations for partnerships with overseas educational institutions.

Initially launched in 2019 as an education loan platform for students pursuing further education in the US, Leap Finance has since expanded to provide assistance on the complex admission processes for overseas education and now covers Canada, the UK and Australia.

Essentially, it creates modern financial products and services that help Indian students pursue a global career by helping Indian students in choosing the right university and the best financing option as well as lining up job interviews and introductions.

“We are a one-stop solution for all the needs of prospective international students. India has the largest group of English-language graduates and STEM education, and millions of graduates from that group want degrees from international campuses as well as global careers,” said Arnav Kumar, Co-founder of Leap Finance.

Also Read: Pintek closes US$21M from debt investor Accial to accelerate educational financing in Indonesia

He further explained these admission processes require accurate information and guidance from experts. “Our online community helps students evaluate career options, network with seniors and select the best courses. We then use this data to offer personalised exam preparation, professional counselling services, visa guides and financial products.”

Leap Finance claims it has over 500,000 members and alumni with 200,000 monthly active users exchanging 9 million chat messages last month.

“Leap Finance marks our first investment in edutech. India is the second-largest market globally for overseas education. In the past decade, the number of applicants for higher education studies abroad from India has increased annually by more than 300 per cent,” noted Amit Anand, Founding Partner of Jungle Ventures.

“2020 was the most difficult year for international education due to travel restrictions related to COVID-19. We are impressed by the resilience of the Leap team over the past year, as they have not only served hundreds of students with their financing solutions but have also innovated with the Leap Scholar service which provides counselling to thousands of Indian students who wish to study abroad,” opined Ashish Agrawal, Principal of Sequoia India.

The company has previously raised US$5.5 million in a Series A funding round led by Sequoia Capital India.

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Image Credit: Leap

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An investor looking to conduct due diligence on a company in the Indonesian mining industry?

Unless you possess an existing rolodex of contacts, it’s difficult for one to get directly connected to an individual with adequate knowledge of it.

That is where expert networks come in. Reportedly experiencing double-digit growth annually, expert networks primarily support investment managers and strategy consultants with their due diligence and research process by linking them up with experts for insights.

They provide what is perhaps the most valuable commodity in business — connections.

While global giants such as Gerson Lehrman Group (GLG) and AlphaSights pride themselves on having a multinational presence, Singapore-based Sealed Network is focused on the world’s fastest-growing region — Southeast Asia.

Launched by Benjamin Lee and Leo Wen Ge, a former investment professional at Temasek-backed VC firm Wavemaker Partners, Sealed is on a mission to connect the region’s top minds with organisations from across the world.

However, in a region as diverse as Southeast Asia, connecting people to it is easier said than done. “When we started, we realised that many experts in Southeast Asia are either not on English language platforms or have a minimal online presence,” Lee shared with e27 in an interview.

In true entrepreneurial spirit, Lee — who previously worked at unicorns Grab and Sequoia China-backed Huobi — managed to turn the hurdle into a competitive advantage for Sealed. “This has quickly turned into a source of strength for us as we have been able to gain traction amongst local experts in almost every country in the region.”

Increasing awareness

Another challenge Lee noted was the difficulty in hiring due to the nascent knowledge of expert networks in the region. Many job seekers struggled to adequately comprehend the services offered by Sealed and the value proposition it offered.

“We eventually managed to find the right hires from meeting with many people and getting a pool of credible investors and advisors to support us,” Lee said.

Despite the lack of awareness of the expert network industry among the general public, its value was well understood by those who needed it. Besides investors and consultants utilising it to gain in-depth insights into a particular industry, expert networks are also utilised by professional services firms and startups for a variety of purposes, ranging from scoping market entry needs to strategic advice.

Also Read: Crossing the finish line: Industry experts give key advice on nailing the due diligence process

Stressing that Sealed services are sector-agnostic in nature, Lee also noticed requests have picked up for experts based in Indonesia and Vietnam, which he believes is part of increased economic interest within the region.

“We are also seeing strong demand for expert engagements in sectors, including fintech, e-commerce and last-mile logistics,” he added.

How it works

Sharing on the typical process of an expert request, Lee noted clients usually send in a project brief to explain how they wish to engage experts. With screening questions and target companies among the required fields, the project brief serves to enable Sealed to identify relevant experts within short notice, which Lee stresses is paramount for the time-sensitive needs of clients.

After scanning through its internal database of over 20,000 experts, the company shortlists on average 10 to answer the screening questions. Thereafter, their profiles and answers are shared with clients, who will make the final pick.

Once selected, engagements occur through a call ranging from 30 minutes to an hour, with Sealed taking a cut of the paid fee.

“We get our customers entirely through warm referrals and word of mouth. Our investors and advisors either previously or currently occupy senior roles at strategy consulting firms and investment funds. They have helped us tremendously in acquiring our customers,” Lee shared when probed on how Sealed acquires its clients.

Also Read: The business of helping other businesses: Visenze reveals their approach to B2B customer acquisition

Sealed has notable names such as Far East Ventures (the VC arm of Far East Organization) on its cap table. To date, it has raised US$1 million. It also counts among its backers prominent angel investors such as Koh Boon Hwee (GIC Investment Board Director, former Chairman of DBS and Singtel) and Steve Melhuish (Co-founder of PropertyGuru).

Future plans

With over 40 corporate clients on its books and its experts boasting a net promoter score (NPS) of 8.7, Lee shared Sealed has its sights set on regional expansion.

“With the goal of becoming Southeast Asia’s leading expert domain, we aim to have a local office in every Southeast Asian capital. We also intend to onboard more strategic and well-connected investors across the region,” he added.

The CEO also shared the company is looking to expand its product offerings past its current consultation calls to include opinion polls for executives and short to mid-term consulting engagements.

Lee believes that enabling different ways for clients to engage experts will allow them to tap into adjacent industries such as strategy consulting, B2B information services, and market research, collectively estimated to be worth over US$330 billion globally.

He also plans to grow the engineering team to enhance the expert-client matching process using a recommendation algorithm. To achieve that, Lee is looking to raise north of US$2 million either by the end of the year or early 2022.

With Southeast Asia shaping to become the next economic darling of the world, it would be tough to bet against his vision.

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Image Credit: Sealed Network

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Starting in 2020, e27 noticed that more and more investors in the Southeast Asia tech startup ecosystem were investing in the regional maritime tech scene. The latest of such investment was a US$800,000 funding for maritime-focussed cybersecurity startup OceanShield; there was also the launch of a maritime tech fund by Rainmaking. These developments indicated a fresh opportunity for industry players to seize.

Signal Ventures is one example of such players that are actively seizing investment opportunities in maritime tech.

In February, the firm announced that it is seeking startups in the sector to join its portfolio. As an investment arm of Signal Group, it is founded by Greek entrepreneur Ioannis Martinos, a prominent figure in the Greek shipping community and CEO of the group.

Outside of the maritime tech sector, Signal Ventures has invested in autonomous vehicle startup Nutonomy and SaaS platform Omnition.

“The maritime tech space has grown significantly over the past three years, but 2021 will see more opportunities than ever before,” says Martinos in a press statement.

With a focus on B2B SaaS, advanced analytics, optimisation and artificial intelligence technologies for the maritime and trade sectors, Signal Ventures offers startups access to unique data processing capabilities, vessel port calls, emissions, port and weather information, venture capital, mentoring and hands-on team-building support.

It also drives incorporation, accounting, legal and HR activities, enabling founders to focus on product development.

Also Read: Maritime tech startups to get US$36M investment from SEEDS Capital

The firm has named Nikolas Pyrgiotis, formerly of McKinsey, as its VP of Technology Ventures. In an email interview, Pyrgiotis explains to e27 their investment philosophy and strategy.

Setting the sail

Pyrgiotis begins by explaining that the firm does not have a “strict mandate” on how it is going to deploy its funds. It favours investments where it can add value and have the flexibility to accelerate or decelerate the deployment.

“High-level, we are targeting at least four deals annually with other startups and initiate one or two more incubation projects over the next 18 months along with the two ongoing ones. Maritime technology startups are spread in shipping, logistics and financial hubs around the world, so following that trend we are investing globally,” he says.

So far, the firm has incubated companies such as UK oil analytics company OilX; invested in and collaborated with Bunker Metric, a bunker procurement optimisation startup; and Swedish weather data provider Storm Glass. They also have two entrepreneurs-in-residence working in a venture studio to develop and take new products to market.

“We’re looking for people and teams whose ideas can be accelerated by our resources, network and investment. The startups we’ve invested in so far have been able to leverage off each other and benefited from access to our unique data processing capabilities, data including vessel port calls, emissions, port and weather information,” Pyrgiotis elaborates.

“But most importantly, we focus on driven and resilient founders, experts in their field, with a long term vision of how their ideas can enhance the maritime markets,” he continues.

When asked about their investment philosophy, Pyrgiotis describes it as “simple”: They invest in what they understand and where they can add value.

Also Read: These are the top three startups chosen by PIER71, offering latest maritime tech solution

“We understand the international maritime, commodity and logistics markets; we understand the synergies in data and technology: we’ve built our own AI platform, the Signal Ocean Platform, which fuses multiple complex data sources and is used in the ship chartering market. We understand how to get the best from entrepreneurs and programmers: we have a growing ecosystem of maritime-related businesses which collaborate together to build new products,” he explains.

Considering its status as a tech and maritime hub, Southeast Asia is certainly a lucrative target for Signal Ventures.

“We see lots of interesting opportunities in Southeast Asia, with companies such as PortCast, GreyWing and Quantship, as well as several serious efforts to promote the maritime tech ecosystem there: Pier71, Innoport, the Techstars/EPS accelerator, Rainmaking, Captain’s Table and Betatron just to name a few,” Pyrgiotis details.

“We see ourselves as a springboard for entrepreneurs in the region to reach the global shipping market and expect several of our portfolio companies in the near future to come from there,” he stresses.

Next destination

According to data by Inmarsat, in 2019, the overall maritime tech sector was estimated to be worth US$106 billion and it is expected to rise to US$278 billion by 2030.

This highlights the potential that investors such as Signal Ventures can pursue, and the firm believes that the potential will continue to grow.

“We see 2021 as a year in which digitisation in the shipping industry continues to accelerate. We want to grow our ecosystem of businesses and focus on our venture studio to successfully bring new, transformative solutions to the market,” Pyrgiotis closes.

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Image Credit: Rinson Chory on Unsplash

 

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New Protein Fund to invest US$200K each in attendees

The story: Big Idea Ventures’s (BIV) New Protein Fund, dedicated to seed- and early-stage investments in plant-based and cell-based food, ingredient and technology companies, is accepting applications from startups for its fourth accelerator cohort.

BIV has accelerator offices in New York, Singapore and soon in Paris.

How it will help: In addition to providing US$200,000 investment (US$125,000 in cash and US$75,000 through in-kind benefits), Big Idea Ventures’s (BIV) programme may also choose to invest up to US$3.5 million in top companies.

Duration: Five months.

More about the story: This is part of the fund’s mission to invest in and accelerate up to 100 plant- and cell-based companies worldwide.

Companies that will join the accelerator will also have an opportunity to engage with BIV’s partners, which include AAK, a global provider of plant-based oils headquartered in Sweden; Bel Group, the French cheesemaker; and Bühler Group, the Swiss food equipment manufacturer.

These limited partners and others will help participating companies in partnership, scaling production, co-developing intellectual property, and product improvements.

The New Protein Fund is targeted to raise US$50 million since its launch in 2019.

Also Read: Ecosystem Roundup: Singapore gets a new unicorn; Is Sea game for the next phase of growth?

FWD Insurance launches startup studio

The story: FWD Insurance has launched FWD Start-Up Studio to support insurtech and takafultech startups in Malaysia, with seed funding of RM1.2 million (US$391,000) over two years.

Who can apply: Malaysian startups operating in the isurtech or Islamic finance sectors.

More about the story: The studio has partnered with 1337 Ventures, a Malaysia-based business accelerator, to launch a four-week pre-accelerator programme. It will be open to 25 startups initially, which will then go on to build a minimum viable product (MVP) and commercially partner with FWD.

Compass India acquires majority stake in SmartQ

The story: Compass Group India, a provider of contract food and support services, has acquired a majority stake in SmartQ, a B2B foodtech
and aggregator platform.

The objective: To integrate and deploy Smart Q’s automated cafeteria management services for its clients.

About SmartQ: Launched in 2014, SmartQ provides services such as automated billing kiosks, centralised billing system, NFC prepaid cards, Point-of-Sale software to companies.

More about the story: Compass India will utilise SmartQ’s technology solutions such as a mobile app for food ordering at the workplace, self-ordering kiosks, cashier-less cafeteria, and PoS solutions, to transform the way people interact with on-site restaurants.

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Image Credit: Big Idea Ventures

 

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