Singapore-based agri-foodtech company DiMuto today announced that it has raised US$2.35 million in Series A funding round led by The Yield Lab Asia Pacific.

The funding included the participation of SEEDS Capital, the investment arm of Enterprise Singapore; PT Great Giant Pineapple; Patrick Vizzone; Ocean Crest Investments; and Asia Capital Pioneers Group.

The company’s existing investors SGInnovate and Latin Leap also returned in this funding round.

In a press statement, DiMuto said that the funding will enable them to scale up product development and meet the growing demand for agro-food trade visibility as well as trade financing.

Ryan Gwee, Chairman of Asia Capital Pioneers Group, also mentioned the possibility for DiMuto to team up with its portfolio company Aleta Planet, a fintech company that works on payments.

DiMuto uses blockchain, cloud, IoT and AI to create combined visibility between the movement of goods and money on DiMuto Platform. The platform enables primary data collection for valuable insights, enabling agri-food businesses to better manage their supply chain.

Also Read: Adatos nets Series A for its AI-driven remote sensing solution for agri, carbon markets

With its Produce, Trade and Market modules, DiMuto provides visibility on product quality, documents, and payment records for each stage of the supply chain, from pre-shipment farm production to post-shipment product receipts.

The ability to capture and organise such data also helps DiMuto’s financing services to verify that Environmental, Social and Governmental (ESG) standards are being met.

The company has specifically designed their proprietary digitalisation devices –Digital Asset Creation device (DACKY)– in the form of a flyaway kit that enables implementation on the ground to be easily completed in as short as one week.

“DiMuto was really born out of my dual experiences of operating in the finance world for 15 years and operating a global fresh fruits and vegetables marketer and distributor,” said Gary Loh, Founder and Chief Executive Officer of DiMuto.

“During my ten-year stint in the food industry, I realised there’s an urgent need for business leaders to be able to see all aspects of their business right down to the granular detail of each box, each payment, and each receipt, as well as see the auxiliary service providers supporting their operations. Being able to capture and have the visual confirmation of such business data on a single platform helps business leaders run the organisation better,” he continued.

DiMuto said that it has executed implementations in Indonesia, China, South Africa, Ghana, Malaysia, Kenya, and Colombia over the last six months, with 25 more projects in the pipeline.

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Komunal, a fintech company offering neo-rural bank services in Indonesia, has received US$2.1 million in its Series A round of financing.

The round, led by East Ventures, saw participation from Skystar Capital. Both had invested in Komunal’s seed round in 2019.

As per a press statement, Komunal will use the new funds to boost financial inclusion in Indonesia by enhancing its product, DepositoBPR.

Launched in 2019, Komunal aims to have reliable credit methodology, alternative data & technology and community partnership with existing rural banks (BPR) and co-operative loan (Koperasi) to improve the funding access to Indonesia’s MSMEs.

The DepositoBPR product enables societies nationwide to access the highest possible government-guaranteed deposit rates from BPRs in any region without visiting the bank.

Also Read: P2P lending platform Komunal raises investment to improve the funding access to Indonesia’s MSMEs

On the other hand, rural banks can source deposits nationwide without incurring the hefty cost of opening additional branches and marketing efforts to attract more deposits. In other words, BPRs can source deposits regardless of the geographical boundaries and convert their higher fixed operational cost to lower variable fees to Komunal by using the platform.

Indonesia has 1,500 BPRs. However, they only account for a 1.5 per cent market share of the entire depositors in the country. Most of these are located in suburban areas and not equipped by digital channels — making their product inaccessible to urban depositors.

Komunal has engaged with 60 BPRs across Java and Bali and launched the beta version of DepositoBPR services in August 2021. The company focuses on doubling the BPR market share by offering a higher rate and more seamless transactions to new and existing clients.

So far, Komunal has disbursed US$50 million of loans to hundreds of SMEs in Indonesia, more than double the amount compared to the same period last year. The company said it would continuously support SMEs in getting credit access, targeting US$150 million of SME loans by next year.

During this pandemic, Komunal strengthened its cash flow with a minimum burn rate as a group — thanks to its lending businesses which has achieved profitability recently.

The neo-bank startup is now planning to launch an “e-billet” feature by the end of 2021.

“Almost all BPR deposits are using physical billet/deposit certificate. It means BPR in Bali, for instance, will need to send the physical deposit (billet) to its depositor in Jakarta (and vice versa when the depositor wants to withdraw their deposit), incurring relatively high logistics costs in the process. The e-billet will effectively eliminate this friction and help our vision to make the product accessible nationwide,” said Kendrick Winoto, co-founder of Komunal.

“We believe a strong partnership between funding agents and rural banks will boost the country’s financial inclusion tremendously. As BPRs have relatively smaller assets than commercial banks, they have dynamic lending and funding needs. While we have seen many fruitful collaborations on the lending side, unfortunately, BPRs don’t have many options to solve their funding needs. However, they offer attractive and safe products,” said Hendry Lieviant, co-founder of Komunal.

Also Read: Philippines, Malaysia, Indonesia, Vietnam have a huge potential in APAC for neobank growth: Study

“During the pandemic, the irony was even clearer. Commercial banks are overflowing with liquidity despite offering record low rates, whilst many BPR had difficulty sourcing deposits because 95 per cent of the country’s depositors reside in urban areas. We hope this platform can bridge the gap. We appreciate OJK and BPR Association support and advice to sharpen this ‘first of its kind’ product,” he added.

Willson Cuaca, co-founder and managing partner of East Ventures, said, “We have heard that many startups provide solutions to unbanked consumers, under-served consumers and non-credit-worthy micro and small businesses. However, none of the solutions addresses rural banks. Komunal introduced the new concept of “neo rural bank” to upgrade smaller banks with advanced capabilities. We hope this approach will accelerate financial inclusion massively and deeper to every Indonesia region.”

As per a recent UnaFinancial report, the Philippines, Malaysia, Indonesia and Vietnam have the highest prospects in Asia for neo bank.

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Image Credit: Komunal

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bolttech, a Singapore- and New York-based insurtech company, said today it added more funds to its US$180-million round, announced in July, to take the total funds raised from Series A to US$210 million.

US- and Germany-based global investment firm Activant Capital Group led the latest tranche, with participation from EDBI and Spanish firm Alma Mundi Insurtech Fund.

The additional capital will help bolttech further enhance technology and digital capabilities and strengthen its presence in Southeast Asia, Europe, and its other existing markets.

Also Read: The future of insurance isn’t just digital — it’s efficiently digital

The insurtech startup was launched in 2020 with a mission to transform the way insurance is bought and sold. With a suite of digital and data-driven capabilities, bolttech aims to make connections between insurers, distributors and customers easier and more efficient to buy and sell insurance and protection products.

bolttech works with insurers, telcos, retailers, banks, e-commerce and digital destinations to embed insurance into their customer journeys at the point of need.

With about 1,400 people on its payroll, bolttech claims to have built a global footprint that serves more than 7.7 million customers in 26 markets across three continents –- North America, Asia, and Europe. It transacts US$5 billion in premiums on its platform, providing a gateway to more than 5,000 products and 150 insurance providers.

In July this year, bolttech bagged a US$180 million Series A funding round led by Activant. Tony Fadell (Principal at Future Shape, inventor of iPod, and co-inventor of iPhone), Alpha Leonis Partners, Dowling Capital Partners, B. Riley Venture Capital, and Tarsadia Investments also joined. With that round, bolttech’s valuation had crossed US$1 billion, giving it a unicorn status.

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Image Credit: bolttech

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Evermos, a Halal/Sharia-compliant social commerce company based in Bandung, Indonesia, has received over US$30 million in an “oversubscribed” Series B investment round.

Led by Asia Impact Investment Fund II (owned by UOB Venture Management), the round also saw participation from IFC, MDI Ventures, TMI and Future Shape. Its Series A investors Jungle Ventures and Shunwei Capital also joined.

Evermos intends to utilise the financing to expand its leadership and growth teams and deepen technology development.

The company also looks to further penetrate lower-tier areas. At the moment, 70 per cent of its resellers are in Java island. Going forward, it will double down in Sumatra and Kalimantan.

The startup was founded in November 2018 by Ghufron Mustaqim, Iqbal Muslimin, Ilham Taufiq and Arip Tirta. Evermos enables individuals (resellers) to sell locally sourced products to their community via WhatsApp or social media platforms. While the resellers focus on generating demand and selling the products, Evermos manages inventory, logistics, and customer support. According to the startup, this empowers resellers to operate their businesses without the need for capital.

Today, the social commerce startup claims to have generated micro-entrepreneurship opportunities for more than 100,000 active resellers across more than 500 tier 2 and 3 cities and regencies.

Products from 500-plus brands, of which more than 95 per cent are sourced from local small and medium enterprises (SMEs), are curated and made available on the platform. These encompass a wide range of products suited to the Indonesian lifestyle, including Muslim fashion, halal health, beauty and F&B products.

The founders claim the business has seen rapid growth, with total transaction value increasing by more than 60x over the last two years.

Also Read: Social commerce startup Evermos brings Halal products into Indonesia, grabs US$8.25M Series A

Co-founder and deputy CEO Mustaqim said: “Ekonomi Gotong Royong’, or ‘Collaborative Economic Empowerment’ is the underpinning philosophy of Evermos. By leveraging our network of resellers, we are providing a platform for our local SMEs to grow their business while enabling our resellers to generate additional income by selling these local products.”

Evermos president Tirta remarked: “Our vision is to empower one million micro-entrepreneurs over the next five years. One of the key factors that influence how we run our company is measuring the sustainability and societal impact of our platform. A share of the company’s income is used to uplift individuals and SMEs in lower-tier cities.”

Currently, the startup is running a pilot programme, Desa Evermos, with almost 100 villages in Indonesia to partner with the local businesses in the villages and convert the underproductive residents into community assets by becoming its resellers.

Clarissa Loh, Senior Director at UOB Venture Management, said, “The population of more than 200 million living outside tier 1 cities in Indonesia represents a huge opportunity for Evermos given the consumer demand. As e-commerce penetration in these areas tends to be low partly due to low internet connectivity, logistics challenges and distrust or unfamiliarity of online shopping, Evermos’s innovative social commerce model can bridge the gap by enabling social sellers to market products to these consumers.”

In 2019, Evermos bagged US$8.25 million in Series A led by Jungle Ventures, with participation from Shunwei Capital and Alpha JWC.

According to a 2021 McKinsey report, Indonesia’s social commerce industry is projected to grow to US$25 billion by 2022, accelerated by COVID-19, with people looking for alternate sources of income. The pandemic had impacted employment opportunities in parts of Indonesia, including job losses seen in some families. Some resellers had been able to supplement family incomes through product sales on the Evermos platform, allowing them to earn income to tide their families over in these tough periods.

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Image Credit: Evermos

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Asia has been an attractive tech hub for investors from around the world for the past few years now. With tech hubs like India, China, Singapore, Malaysia, Indonesia, and Vietnam among others producing unicorns and decacorns every year, the investment scene in the region has been bustling with VCs ready to ride the digitalisation and tech disruption waves. 

However, 2020 has brought about a shift in VC sentiment. With the coronavirus pandemic bringing life as we knew it to a halt, many sectors almost shut down while some like edtech, fintech, and healthtech soared. Emergent trends in the tech scene in Asia have changed and so has the overall approach of investors.

We spoke to several regional investors who helped unpack the current VC climate and shared how startups can rely on technology to leverage due diligence for better fundraising.

What the new fundraising landscape is starting to look like

There are three key changes to fundraising, according to Alex Toh, fintech investor of SC Ventures’ Innovation Investment Fund. 

Firstly, VCs have been looking more inward in their portfolio for potential internal rounds before looking for new deals. Secondly, VCs tend to scrutinise startups more carefully and with great focus on cash flow and paths to profitability. Thirdly, due diligence has been limited to virtual and as such, most deals that are done during this period are with companies that investors have already met and shortlisted.

“While there are ‘pure virtual’ deals done where investors have never met the founders in person, these are rarer and we may see less ‘new’ cross border deals for now,” Toh added.

Also read: These 3 Taiwan startups are looking to expand in Southeast Asia

With that, key areas of focus for startups looking to raise funds, grow business, and scale have also changed. 

In the new normal, agility is key. Being open to understanding the changing landscape and pivoting accordingly while being ready for due diligence is the way forward. The investor approach towards risk-taking has naturally changed — VCs are more inclined towards startups that have a future-proof plan in place, who show openness and preparedness for due diligence, and who lean on business safety and success.

This is where startups can leverage technology to eliminate human errors, maximise data analytics, and create a robust and secure data room that helps them attract funds that enable them to survive, scale, and succeed in a post-pandemic world. 

Improving fundraising efforts in terms of due diligence

Christopher Quek, a Managing Partner at TRIVE, a Singapore-based VC firm focused on Impact tech startups, shared, “Due diligence is a critical and minimum obligation for institutional VCs who are responsible for the funds given by LPs (Limited Partners). It is crucial in alternative investments as well where not all information is public. At TRIVE, we have rejected deals after stringent due diligence in the past. Due diligence also includes checking with fellow VCs and ecosystem players on the background of the founder and the startup.”

Startups, SMEs, and even big corporations can leverage technology and embrace digitalisation to help improve the overall process of due diligence. Although the efficacy of this largely depends on the nature of the business, VCs believe that tech startups tend to be easier in terms of due diligence as compared to traditional businesses that lack any form of digitalisation. In the new normal, due diligence in traditional sectors such as material sciences, food, and pharma is even more challenging due to the restrictions in visiting physical spaces.

Quek shared, “To help facilitate a smooth due diligence process, startups need to have set up data rooms ready to be released and updated as and when potential investors are keen to review. This instils confidence within the investors and helps establish a good rapport with the founders from the get-go.”

Also read: Tech-for-good: How 4 tech companies are gearing up for an uncertain future

Toh also stressed the importance of having organised data rooms. “As a startup’s traction changes very quickly, a good practice would be to segment your data rooms for each investor so you know what you provided to each and at which dates. A quick video conference call after can help address any concerns and questions the investor may have on the data.”

There are tools that help startups do this. For startups that need to quickly organise hundreds of documents for potential and even multiple investors, a data room with AI-enabled document categorisation and integrated redaction features will allow them to be ready in less than a day.

Organised data rooms are also helpful when it comes to customising your approach, which is another important thing startups should do, according to Toh. Startups should not just simply fire off information to a large number of investors, but should take time to research each investor before reaching out and provide a customised introduction or pitch deck. “While it is tempting to do a ‘spray and pray’ outreach to all VCs as more investors are willing to speak over a video conference, a customised note still differentiates your company.”

What will VCs be looking at in the new normal: Why due diligence is key

Moving forward, startup founders need to be as transparent as possible. Hiding any material information about the company and their backgrounds are never a good idea, and transparency is going to be more crucial in a post-pandemic world where the economic climate is still volatile and unstable.

“Founders also need to remember that integrity is vital in the startup journey. TRIVE has rejected startups before after receiving negative feedback on the founders from external sources,” Quek shared. 

Speaking on key areas that businesses need to focus more on in the new normal, Joe Zhang of TNB Aura, Singapore-based VC company focused on tech startups, shared, “A lot of investors are now looking at unit economics and profitability more extensively, so that is crucial. Founders also need to address the “elephant in the room” as in have a few COVID points in the pitch — how did they adjust, how did they transform the economy of their business, how are they better and safer today? Investors are more inclined towards founders who learnt their lessons, adapted and have come out with a better plan prepping for the post-pandemic world.”

Paolo Limcaoco, the Southeast Asia Investment Officer for Accion Venture Lab, Accion’s seed-stage investment initiative, shared that due diligence is key to making any investment. Amidst the global shift due to the pandemic, Accion Venture Lab has had to shift its ways of doing diligence, moving it mostly digital and remote.

Also read: Meet these 4 founders who are raising millions and redefining the way businesses are done

“Now, when looking to invest, while we look to understand the product-market fit and financial inclusion aspect of the business, as early-stage investors, an integral part of our diligence is evaluating the founders and the rest of the team, making sure that they are thoughtful, mission-aligned, and dedicated. With the pandemic, face-to-face settings are not possible anymore. So, the focus on digital meetups with the team in both formal, as well as informal settings, has become even more crucial for due diligence.” 

Limcaoco further added that while scalability remains important, sustainability has become just as crucial. He believes that highlighting the viability of the business model and operations in the future will be key for founders in the new normal. 

“Investors will want to know how your business was affected, how you survived, and what are the steps you have taken to be a company that will thrive moving forward, so startups need to be prepared to answer these questions,” he said.

One of the most important things startups should do is to research — who the investors are, how their investment portfolio looks, are they a good fit — even before reaching out. And when those questions are answered, it’s best to include that in their pitch or introduction. 

“We are strategic investors and it is very helpful to know how you can or are providing strategic value to the bank even before we start diving in on financial returns,” said Toh. “Do they know how we can help? For example, SC has a strong presence in Asia, Africa and the Middle East and if your future growth market is there, it would be a very strong alignment and we see this with most of the investments we have made.”

Leveraging technology for better due diligence

Startups need to understand that moving forward, there are a few fundamental changes that have reshaped the current climate and will have impacts on the near future as well:

• How businesses communicate has changed. Businesses across Southeast Asia are unable to meet or interact physically and this has made the entire process of due diligence more time consuming and challenging
• VC sentiment has also shifted. VCs have become more cautious of their existing portfolios. They are not as keen to make new investments as before, hence the drop in fundraising across the region in Q2 and Q3; they would rather focus on maintaining existing startup cohorts. 
• The new scope within different sectors. While sectors such as edtech, online entertainment, and eCommerce are thriving, travel, and hospitality are among those that were the worst hit. However, investors are more conservative in general, so not necessarily an increase or decrease in each of these sectors can be seen.
• Initial approach is just the hand that knocks and not a foot through the door. Depending on how prepared you are and how open you are to sharing information, VCs may choose to open the door or keep it shut.
• A structured and well-kept data room is very telling. It speaks volumes about how prepared you are to not only share important information but also to keep the fundraising process going by making it easy for investors to see all the necessary information needed to determine what your long-term growth plans are.

Due diligence is the very foundation of the marriage between startup founders and VCs. An investment is at least a three to five-year-old relationship and it can be very painful to dissolve that relationship if things go wrong. This is what due diligence eliminates — it helps establish trust, transparency, and a two-way communication channel between involved parties. 

Moving forward in the new normal, startups need to understand the changing VC sentiment and be prepared, organised, and ready to share information and documents with potential investors instantly for conducting due diligence and raising funds for business growth and scalability. 

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This article is produced by the e27 team, sponsored by Datasite.

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