Apps are taking over the world. Grab, Robinhood, DoNotPay, Snapchat, mobile apps are expected to generate over a trillion in revenue by 2024. On the other hand, third-world countries are considered now the new breeding ground for app innovations and next-gen app entrepreneurs.

Why?

There’s no doubt that developing nations have more real-world problems than first-world countries. Areas such as community, logistics, education, legal, and environment are only some of the spaces to which there’s a ton of potential for innovation.

As we all saw, there’s an increasing trend of investors pouring funding into startups in countries like the Philippines, Indonesia, Malaysia, and Vietnam.

This is because first, there are a lot of problems yet to be solved in Southeast Asia, which means there’s a lot of market potential and a lower barrier for entry.

To address the opportunity and problem statement, we founded Hikre School with one concept in mind, to create an all-in-one program for aspiring app entrepreneurs. Students get to learn from scratch how to design and build apps from their computers while working on finding a solution for a real-world problem.

To make our vision possible, we leverage a learning and teaching framework called challenge-based learning, which is similar to project-based learning, however, challenge-based learning incorporates technology into the process. The goal is to have students come up with possible real-world solutions to problems.

A bit of history, challenged-based learning first appeared from the “Apple Classrooms of Tomorrow — Today”, a project initiated in 2008 by Apple to identify the essential design principles of a 21st-century learning environment.

In this model, students are instructed to simulate problem-solving solutions through collaboration, hands-on learning, and app challenges. For instance, before they go to design or code apps, they first have to go through brainstorming their big ideas, essential questions, and challenges.

Also Read: Gojek wants to move from the idea of a super app to an on-demand company for everything: Group CTO

Within the first three months of launch, we’ve gathered 200+ feedbacks from social media and nearly 200 student applications. This shows an increasing interest in app development among college students, freelancers, and business owners.

Take a look at one of the student projects.

Source: Youtube/Hikre School

The team designed a healthcare app to help transition physical health services to online services.

According to Philippine Statistics Authority, in 2020, suicide in the Philippines went up 26 per cent. When the pandemic started, unemployment rose, stress levels skyrocketed, reports of domestic abuse are up.

In times like these, we need to use technology to fill in the gaps. One way to we can do that is through mobile apps.

The app also features an AI called Moxie that guides you through your medical needs. It asks you questions for instance regarding the pain level of your headache to which it provides you the right consultation and advice. Plus, you can connect and consult with doctors directly from the app.

It’s your medical care within your reach.

Another team applied to Impact Hub Manila’s hackathon, which is one of the biggest organisers in the Philippines. The event was a three-day-long where students from all over the Philippines came together to brainstorm an idea, build a demo prototype, and propose a solution to the big idea of Climate Change.

The team designed and developed a beautiful solution for managing the issue of plastic waste. It’s a combination of education and gamification in one platform designed to encourage a call to action among high school and college students show below.

Also Read: A new approach to hybrid working: Let the employees decide when, how and where to work

As a result of the students’ creation, they walked away as grand champions along with $20,000 worth of incubation support from Impact Hub Manila and a 35,000 PHP cash prize.

These are just some case studies and projects proposed by the students on how to tackle problems not only in the Philippines but for entire Southeast Asia. Just like how the Western is ruled by apps, soon Southeast Asia will follow its path.

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Lucy, a neobank focused on women entrepreneurs, has secured an undisclosed amount in seed financing from Hong Kong-based global investment firm EmergeVest at a US$10 million valuation.

As per a statement, this deal will help Lucy refine its tech platform, round out the team in Singapore, and pilot in the local market before expanding regionally through strategic partnerships.

Before this round, Lucy secured US$450,000 in a women-only round of 21 diverse women, including Sephora Asia MD Hanh Nguyen and a number of other high-profile women from the region and the world.

Also Read: Why neobanks are better than digital banks

The initial funding came from Lucy’s co-founders Debbie Watkins (former MD of Fern Software APMEA), Hal Bosher (former CEO of Yoma Bank and Chairman of Wave Money), and Luke Janssen (former CEO and Chairman of Tigerspike), besides the Savearth fund.

Through her over 20 years working with underserved communities, Debbie saw first-hand that women were a financially excluded group. However, Hal’s experience with his customers at Yoma proved that women were great customers. So the duo decided to set up Lucy, a neobank and community focused on women entrepreneurs.

The app helps women entrepreneurs set up, run and grow their businesses, with affordable financial services including fee-free accounts with Mastercard, no-interest salary advances, savings accounts, loan management, and low-cost remittances.

Lucy also offers a community-based platform for women to connect with their peers and mentors for inspiration, support, e-training modules, and a networking marketplace.

The startup will focus on two underserved groups of women entrepreneurs for its pilot launch in Singapore. They are 1) home-based entrepreneurs or women with a ‘side hustle’, and 2) domestic helpers, many of whom run small businesses in their home countries.

The second category will help it drive expansion to nearby markets of Indonesia, the Philippines and Myanmar (Lucy has recently won a UNCDF grant to help support low-cost remittances to these countries). A recent study noted that the Philippines, Malaysia, Indonesia and Vietnam have the highest prospects in Asia for neobank.

Also Read: Neobanks: the future of banking?

Formed in 2013, EmergeVest is an investment firm with US$500 million in assets under management. It invests across the capital structure at the intersection of the supply chain, technology and financial services.

A pre-pandemic analysis conducted by Boston Consulting Group showed that if women and men worldwide participated equally as entrepreneurs, the global economy would get a boost of US$2.5-5 trillion. Post-COVID, the need to support women entrepreneurs is even greater.

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Image Credit: Lucy

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Indonesian e-commerce giant Bukalapak today made its debut on the Indonesia Stock Exchange, raising US$1.5 billion in its initial public offering (IPO).

Debuting at IDR850, the shares price rose 25 per cent and was capped at IDR1,060 (US$1=IDR14,369).

Bukalapak wants to use the proceeds from the IPO to support the operations of its holding company and its subsidiaries.

According to a The Straits Times report, based on the Bloomberg data, the debut gain has pushed Bukalapak’s valuation to IDR109 trillion (US$7.6 billion), putting it on par with state-owned enterprise Jasa Marga and telco Axiata.

In a press conference, CEO Rachmat Kaimuddin said Bukalapak remains committed to maintaining its performance and supporting Indonesian MSMEs through its various services. 

The firm also aims to implement a business strategy that includes strengthening its “all-commerce platform” and partnering with Mitra Bukalapak, the MSMEs using the platform.

It will also increase its focus in tier-two and tier-three cities in Indonesia.

“We aim to create a fair economy for all,” Kaimuddin said. 

Also Read: Ecosystem Roundup: Firms in SEA raise record US$4.9B via IPOs in H1; Temasek, DBS form US$500M debt platform

Bukalapak’s journey began in 2010 as a C2C online marketplace. Over the years, the company has ventured into various verticals, including fintech and O2O e-commerce.

The firm became a unicorn in January 2018 and counts GIC and Microsoft among its investors. It is also the first unicorn in the archipelago to go public both domestically and abroad.

According to Kaimuddin, Bukalapak chose IDX to list its shares, given its status as a local company with stakeholders primarily based in the country.

Bukalapak, however, is not the first company to list on the IDX. In 2017, two Indonesian tech startups Kioson and MCash had gone public on the local exchange. Kioson raised US$3.3 million on the very first day, while M Cash raised US$22 million.

In an interview with e27 in June 2020, IDX commissioner Pandu Sjahrir spoke about the organisation’s plan to encourage more Indonesian tech companies to get listed on the stock exchange.

“What we are doing here is deepening the demand, particularly by having more young investors on board. It is something that starts with education about the capital market,” Sjahrir said.

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Image Credit: Bukalapak

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Although its fintech industry is still relatively nascent compared to major players like London, the Malaysian capital of Kuala Lumpur climbed 11 places in this year’s Global Fintech Rankings. There is no shortage of homegrown success stories. Among them is Jirnexu, which provides digital acquisition solutions for financial service providers and has raised US$37 million to date. In January, supply chain finance startup and P2P financing platform CapBay bagged US$20 million in a Series A fundraise.

Malaysia’s consumers are spoilt for choice when it comes to e-wallet providers with a number of major players as listed by Jobstreet, such as GrabPay, CIMB Pay, AEON Wallet, Boost, and Touch ‘n Go. Cashless transaction has taken on an increasingly prominent role in people’s lives, so much so that the active user base for the e-payment system used for expressway tolls has ballooned to 21 million people. In fact, Malaysia boasts an ASEAN-leading digital wallet usage rate of 40%, ahead of neighbours like the Philippines (36%), Thailand (27%), and Singapore (26%). Cash usage has correspondingly dropped by 64% since the beginning of the pandemic.

These statistics are all reflective of the country’s thriving digital market. With more consumers prioritising convenience and hygiene, they naturally turned towards contactless methods like e-wallets and digital banking. These developments have also manifested in the overall growth and expansion of these fintech companies. For example, AIA Malaysia recently purchased a minority share in Touch ‘n Go, putting their value at RM 3 billion. On the other hand, Boost recently teamed up with RHB Banking Group, signalling their move into the highest-margin segments of financial services.

Also read: How these four India-based startups are impacting the earth

The recent pandemic has accelerated this growth, enabling the market to adopt fintech solutions at a much faster and larger rate. According to the Fintech Malaysia 2021 report, mobile banking transactions reached a record high of US$109.7 million in 2020, an increase of 125% compared to the year before. Unprecedented nationwide lockdowns have forced people to work from home, pushed businesses online, and encouraged the use of digital payments. All these have spurred Malaysian fintechs to shine amidst the challenges.

The growth of Malaysia’s fintech ecosystem is also partly thanks to regulatory support from both Bank Negara Malaysia (Malaysia Central Bank) & the Securities Commission. To support the efforts of regulators, the Malaysia Digital Economy Corporation (MDEC) has launched the Fintech Booster which is a capacity building program, in collaboration with Bank Negara Malaysia to assist fintech companies, both local and foreign in developing their products and services via three strategically crafted modules; Legal & Compliance, Business Model, and Technology.

Malaysia fintechs going global

Among the companies that have benefitted from MDEC’s programmes is Soft Space, which provides fintech infrastructure services for the financial services industry (FSI). It delivers these solutions via a “fintech-as-a-service model”, allowing FSIs to pay only according to their usage demand. Specifically, they help FSIs accept payments and issue physical white label prepaid cards via e-wallets.

One of Soft Space’s innovation is the “Tap to Phone” introduced with PayNet back in 2018. The solution, a world’s first, is a gamechanger to the payment landscape by allowing any Android device with near-field communications to accept contactless cards.

Tap to Phone has been endorsed by major card schemes like Visa, Mastercard, JCB, and most recently UnionPay International. It is also used by clients in Australia, Europe, and Japan where, JCB, one of the largest card brands with over 140 million cards in circulation, has introduced this payment technology to its member banks across 24 countries.

“Soft Space has already introduced this technology to 13 FSIs and 8 partners globally, some of which are unicorn payment giants that have the most stringent business and security requirements,” said chief strategy officer Chris Leong.

Also read: Angel Investors: leading the charge for startup growth in Thailand

Soft Space has also ventured into the transport and logistic sector in two advanced markets. In Japan, Tap to Phone is the first in the market to enable expressway buses to accept contactless credit cards. Meanwhile, in Australia, it is used by Transport for New South Wales to validate payments. This is a further testament to Soft Space’s capabilities.

The fintech has also successfully expanded to other overseas markets, including Taiwan, Australia, Japan, Thailand, Singapore, and Indonesia.

Soft Space has managed to hit these key milestones because of the rich Malaysian fintech ecosystem and the support of the government. The country’s central bank, for instance, actively emphasises the need for Malaysia’s regulations to be aligned with global standards, which ensures that local fintech companies are always well-positioned to go global.

But Soft Space isn’t alone in this feat. Joining them among the roster of Malaysian fintechs that have gone global are Tranglo, JurisTech, and Merchantrade.

More local players scaling globally

Tranglo is a fintech that specialises in cross-border payments. They provide three solutions: Tranglo Connect, Tranglo Business, and Tranglo Recharge, which respectively provide remittance payouts, payouts for businesses without money service business licences, and international airtime transfers.

Recently, US fintech giant Ripple announced that it would be acquiring a 40% stake in Tranglo. With this partnership, Tranglo is ready for its next stage of growth.

“This acquisition supercharges Tranglo’s capabilities to include digital currency as settlement and blockchain technology to speed up and secure transactions further,” said chief executive officer Jacky Lee.

Despite challenges like regulatory differences and language barriers, Malaysia’s multilingual and multicultural uniqueness has enabled Tranglo to thrive abroad. It currently has a presence in more than 22 countries, such as the Philippines, China, Indonesia, Vietnam, and the United Kingdom.

JurisTech, which develops a variety of fintech solutions for different client classes, is also among Malaysia’s success stories. It offers credit management software solutions for banks and financial institutions. Furthermore, it provides “software-as-a-service” products for small and medium-sized enterprises and customised marketing solutions via its consumer’s arm, iMoney.

The company created a machine learning tool, Juris Mindcraft, that does prescriptive analytics artificial intelligence (AI). It helps businesses make better decisions through the analysis of raw data in addition to providing business recommendations. Furthermore, they also introduced Juris Access, a digital onboarding platform, for organisations to deliver an easy to navigate, interactive digital space that streamlines the customer journey from the front-end to the back-end.

JurisTech has expanded globally to Australia, Uganda, Singapore, and United Arab Emirates (UAE). As the financial industry matures to transform digitally, JurisTech already has ready-built components and solutions for banks, financial institutions, Fintechs, and SMEs to help compose this future digitally.

Also read: How Malaysia’s Glueck Technologies is revolutionising data-driven technology in Southeast Asia

Another promising player in the fintech ecosystem is Merchantrade. The company provides multiple fintech solutions such as the Merchantrade Money eWallet, which includes a visa prepaid card, remittance app eRemit, and payment gateway service Ozopay.

Today, Merchantrade is one of the largest remittance providers in Southeast Asia, with more than 100 payout partners including more than 40 banks worldwide. Partners from places as far as Europe, Canada, Oman, and Bangladesh can also access their international money transfer operator platform.

Soft Space, Tranglo, JurisTech, and Merchantrade will all feature at the forthcoming Malaysia Tech Month Fintech Showcase, a curation of the country’s top fintech companies.

To learn more about the programme and the fintech showcase, please visit the Malaysia Tech Month official page.

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This article is produced by the e27 team, sponsored by MDEC

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Arise, a joint venture by Finch Capital and MDI Ventures, has announced the first close of its US$40-million debut fund.

Multiple third-party corporate investors, family offices, and high-net-worth backers joined the fund. Notable among these is Indonesia’s publicly traded ICT giant Metrodata Electronics.

With ticket sizes ranging from US$250,000 to US$3 million, the Indonesia-based fund plans to invest in 25 tech startups in the post-seed to pre-Series A stages in Southeast Asia for the next three years. 

Startups funded by Arise are given a path to receive investments at later stages of their development, all the way up to exit (IPO or M&A). 

Also read: Blibli is the latest Indonesian tech company to confirm unicorn status

Arise is currently in the process of executing new investments. The fund targets at least five closed deals by the end of 2021.

Established in late 2020, Arise goes beyond writing cheques to invest in startups early — even before the founders fully solidify their ideas and teams. 

In addition, it provides access to strategic go-to-market partners via its corporate LP network. It also empowers long-term capital through its affiliated sister funds, such as MDI Ventures and Centauri Fund.

Before receiving capital from Arise, startups will also have an option to enter Telkom’s Indigo Nation incubator. They can also benefit from a broad network of Arise’s corporate LPs and tech ecosystems in Europe, Asia, and Silicon Valley.

According to Arise Partner Aldi Adrian Hartanto, despite the significant influx of high-quality founders over the last decade, a disproportionate capital allocation makes the situation more challenging for promising entrepreneurs to secure investments during the region’s economic slowdown. 

“Many of these ‘next generation’ founders, who often come with experience from established local tech ‘unicorns’ and ‘centaurs,’ already know how to grow and scale tech ventures in the local market. But they have yet to really get their names out there and still require further support in accelerating product-market fit, validating ideas, and raising proper series A rounds after that,” he said.

“Startups backed by Arise should ideally go on to receive investment from Centauri at the series A stage, MDI Ventures at series B and later stages. Finally, in some cases, they should see a meaningful exit via acquisition with Telkom Group as one of the potential buyers or IPO,” added Hartanto.

“We’ve seen many seed-stage companies struggling to access the right markets, which is reflected by a lack of traction,” says Hans De Back, Managing Partner at Finch Capital. “Our role is to solve this problem with immediate go-to-market avenues by collaborating with our network of enterprise partners such as Metrodata and portfolio companies. In this way, we can enable companies to grow much faster and set them up stronger for series A.”

Also Read: Bukalapak raises US$1.5B on the first day of its IDX debut, shares jump 25 per cent

Earlier this year, Finch Capital, which focuses on European and ASEAN markets, announced the first close of its third European Fund (EUR150M) in high-growth fintech and AI startups. 

Meanwhile, MDI Ventures, with US$830 million in assets under management, provides startups with a wide range of opportunities to get plugged into Indonesia’s Telkom Group of businesses in telecoms, multimedia, property, financial services, and a network of other state-owned enterprises.

In recent years, with the tremendous rise of tech-based unicorns like Gojek, Traveloka, and recently Blibli, Indonesia is considered the most prominent startup hub in Southeast Asia. Today, the country’s e-commerce platform Bukalapak also announced its debut on the Indonesia stock exchange, the first unicorn in Southeast Asia to go public. 

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Image credit: Arise

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