Consumer credit has not been popular in Vietnam, given such a large unbanked population and extended life perspective of debt avoidance. However, with an emerging wave of young and online-oriented generation, this will soon change in the 2020s decade, already backed by the rapid growth of e-commerce and e-wallet in recent years.

Buy now, pay later (BNPL) works by splitting customers’ payments into instalments with or without interest while paying providers a total amount upfront. First of all, let’s look at BNPL models and analyse their market entries. Many models of BNPL can be categorised into two verticals: card-linked offerings and non-card-linked offerings.

Of the latter vertical, an integrated shopping app is the most prevalent one at the moment. Most prominent players in the field fall right into this category: Klarna with a valuation of US$46 billion as of June 2021, or Affirm valued at US$24 billion in January 2021, etc.

This model started by offering an alternative payment method in on and offline stores. It is now well on its way to support BNPL issuers’ target much further: become a “super app” that provides access to several services on a single platform from a marketplace to financial services.

After years of improvement, a customer journey of borrowing from a BNPL app is more seamless than ever: shop, register with self-identification, then check out.

BNPL has been known for its quick processing right at the point of sale (POS), which completely changes the perception of traditional credit of credit history checking and regulations. Other new channels of instalments include prepurchase and postpurchase.

Traditional banks are believed to utilise these new channels to catch up on the race of acquiring young and new potential credit users and leverage their large customer base via card-linked instalments. Customers who own credit cards still claim to prefer BNPL as it offers a lower annual percentage rate on purchases and a more flexible payment due date.

Also Read: Akulaku CEO William Li: Asia’s BNPL sector has great potential compared to Europe

On a horizontal scale, BNPL issuers are usually categorised by the ticket size of consumers’ baskets and their targeted types of goods and services. Started with all kinds of small- to medium-sized basket of purchases, BNPL has captured a loyal base of young customers, who with thin files of credit are not qualified to purchase relatively valuable items like laptops, luxury cosmetics in one payment, not considering its appealing feature of zero per cent interest.

Recently, more focused issuers have targeted large-ticket transactions type and specified services, such as health care or home improvement.

Why say BNPL will change Vietnam’s payment landscape in this decade?

Firstly, the rapid growth of e-commerce in recent years, amplified by the pandemic, has boosted the scale of its other supporting platforms, especially payment systems. According to JP Morgan, Vietnam has a predicted growth rate for e-commerce, up to 19 per cent year-over-year increase to 2021.

In 2017 alone, this number was 36.6 per cent. This sector as a whole is valued at US$6.2 billion in Vietnam and is projected to increase rapidly over time. The potential is yet to reveal when brick-and-mortar retail is dominant entirely, and e-commerce is expected to account for only 5 per cent of total retail in Vietnam.

Given this steadily increasing number of transactions, maintaining a smooth and fast checkout system with supporting features will be a key for differentiation.

Vietnamese banks have been struggling to digitalise their systems over the years, and global banks have lost their first-move advantage acquiring new and young online customers to their credit collection. Come in BNPL platforms as tech companies with sophisticated technological systems, catering for online shopping platforms with advanced consumer-service features.

These are well on their way to becoming head-to-head competitors with traditional banks if the whole banking model is simplified to a large customer base and transactions. For Klarna’s case, with several 14 million customers active within 90 million ones registered and an average of 1 million transactions per month, it already launched many other features of financial services to target much further than just a BNPL platform: a neobank.

Coming back to digital payment, where checkout experience plays an essential role in differentiating a marketplace, a feature of BNPL allows users to split costs into smaller amounts right at purchase seamlessly, without much regulatory scrutiny.

Considering most purchased items in Vietnam online baskets, with electronics and travel being the first and second correspondingly, sooner or later, BNPL will prove its ease of usage by breaking up these mid-sized purchases, letting young online shoppers achieve a more flexible financial plan.

Also Read: Is Southeast Asia ready to buy now, pay later? 

This has proven to be the case of success in SEA countries: PayLater in Indonesia, Atome and Hoolah across Hongkong, Singapore and Malaysia.

Another factor that will contribute significantly to the growth of BNPL is young population, given that the average age in Vietnam is 30.4 years old. Just like how strongly this generation has supported online shopping, internet penetration is expected at 49.7 per cent while 37.1 per cent of the population has shopped online, the same will be applied to BNPL.

Not just from the consumers’ side, banks and BNPL platforms will not wait to grasp a share in this market, with its promising impact on the banking and payment landscape.

SEA remains a sizeable unbanked population over the years. Only 27 per cent of the 670-million-people population in the region has bank accounts; that leaves hundreds of millions of people not having a bank account, not even considering a credit line.

Recorded in Indonesia, many people used BNPL before even having a bank account. For cautious buyers, the idea of creating credit without interest does not sound much like debt, especially where their money is not exposed to the risk of delay refunding.

Therefore, promoting BNPL will be a helpful channel for implementing credit ideas and building a foundation of a credit scoring system through online users’ behaviour.

The enthusiasm for BNPL of tech companies soon to be seen in Vietnam can be explained by its high engagement from customers and profound revelation of daily users’ purchasing history, not just significant acquisitions like borrowing from banks, which is much relevant in depicting customers’ creditworthiness.

Banks have started entering this new field, “super apps”, third payment channels such as Paypal and MasterCard, all coming in the same space have proved the rise of BNPL. The race in Vietnam has started with e-wallets, startups and incoming banks, who will be the final winner in this payment landscape transformation. With nearly a quarter of Vietnam’s population aged 14 and under, there are millions of new potential online consumers.

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The virtual kitchen industry is relatively nascent in Malaysia. Currently, only a few players exist, and there is only a limited footprint compared to neighbouring Indonesia or Singapore.

However, COVID-19 is turning out to be a boon for the industry and accelerates its growth. With the emergence of the pandemic, which is forcing a shift in customer behaviour, Malaysia has witnessed the sprouting of virtual kitchens, aka cloud kitchens, ghost kitchens, or dark kitchens.

As per a survey, 58 per cent of Malaysians have admitted to using more food delivery apps during the pandemic. “Since the movement control order of March 2020, there has been a rise in the awareness and acceptance of food deliveries among Malaysians. More Malaysians are now open to the idea of food delivery — be it from a restaurant, cloud kitchen or a home kitchen,” according to Nicholas Ou, co-founder and CEO of Loop Foods.

Virtual kitchens were first introduced in Malaysia by delivery platforms. They invited brands to locations with predicted high demand and rented a building, and designed multiple kitchen spaces for different brands.

Also Read: How millennials and the pandemic are driving the growth of cloud kitchens in Indonesia

Sensing an opportunity here, many traditional F&B players have turned to cloud kitchens to save operational costs. Some of them opened their own cloud kitchens—for example, MyeongDong and KyoChon. Even some landlords are turning their empty spaces into cloud kitchens.

On a growth path

Virtual kitchens come in two models. The first model works like a co-working space where the operator rents out the space to tenants. In the second model, the cloud kitchen operator owns and runs all the brands.

Less than ten cloud kitchen companies are currently operating in Malaysia across these two models. They are Foodpanda, CookHouse, COOX, Loop Foods, Pop Meals, KitchenConnect, and Aliments. Most of these have one to two outlets in the country. Each of them looks to tap into the growing consumers using digital platforms/apps for food delivery.

According to Yiping Goh, Partner at Quest Ventures, Malaysia’s cloud kitchen industry is growing fast — initially dominated by Grab and Foodpanda and B2C player Pop Meals (erstwhile dahmakan).

“With multiple lockdowns permanently disrupting retail F&B entrepreneurs, more sustainable models like cloud kitchen operations are being adopted at a rapid pace,” she added. “We still see lots of fragmented B2C players and believe that stronger B2B/B2B2C players will emerge to serve brands that are well established but severely impacted in ways they operate in this endemic.”

The online food delivery market in Malaysia has grown considerably throughout 2021. The market was about US$66.3 million in 2017 and US$192 million in 2020. This figure is expected to hit US$319 million by 2026.

“Throughout the last few decades, the F&B industry’s business model has involved prime real estate that could attract customers. But with fast internet and mobile penetration, consumers’ behaviour is changing,” Ou explained.

Also Read: Everything from soup to nuts: Meet the 27 ghost kitchen startups in Southeast Asia

Loop Foods is a Sunway iLabs-backed cloud kitchen player that serves multiple in-house ‘virtual restaurant’ brands for online orders and delivery.

“When considering being delivery-first, the necessity for prime real estate is suddenly eliminated. Also, we’re rethinking how to utilise kitchens better. One kitchen serving one restaurant is no longer seen as the most efficient way. That’s where the concept of a multi-brand cloud kitchen comes into play,” Ou shared.

Challenges galore

Despite vast growth potential, Malaysia’s dark kitchen industry as a whole is facing several challenges.

The first challenge is in making changes to operations.

“Joining a cloud kitchen requires a shift from the typical running of a brick-and-mortar store,” says Lim Hui Ru, General Manager at Kitchen Connect. “Traditional restaurants need to rework operational flow, team size, equipment layout, delivery menu, food and packing, materials storage. This complete shift takes time to adjust.”

Quality control is the second challenge. In a typical restaurant, food goes directly from the kitchen to the customer. However, in a food delivery business, the food moves from the kitchen to the delivery partner and then to the customer.

In addition, it is also dependent on external forces such as rain and traffic, which could delay the delivery and food quality.

The third big challenge is digital marketing. As the bulk of orders in a delivery kitchen are online, operators need to be savvy in digital marketing, observe online trends and apply that back to the business.
Small delivery orders is another challenge. A small order makes it harder for a delivery to be economically viable, both for the food delivery platform and the restaurant/kitchen.

“The aggregation of several kitchens in a single location provides more efficiency and economies of scale for both restaurants and delivery partners. Consumers can also order from multiple restaurants at one go with minimal delivery charges,” according to Ru.

A comparison with Indonesia, Singapore

Malaysia’s internet economy has more than tripled in size since 2015 at an average growth rate of 49 per cent a year. It has given rise to a new generation of tech-savvy, mobile-first consumers who are open to digital-first F&B brands.

Loop Foods’s Ou says that even legacy F&B brands are exploring cloud kitchen models to increase their reach to newer customers and expand their service coverage.

“In Indonesia, we will only be seeing it in major cities where their density is much higher than Malaysia’s key cities. As a result, they are likely to experience better outcomes than Malaysia, but of course, we will see more players fighting for a space in the market, too,” said Lee Teng, COO of Aliments.

In his view, Singapore will be a relatively smaller market, but with a high density and higher usage of online food ordering. And due to the market size of Singapore, cloud kitchens may not need to focus too much on expanding to different locations to expand coverage. “Still, they would need to focus on marketing to create more demands strategically,” added Teng.

Also Read: How Philippine cloud kitchen industry is piggybacking on the country’s unique food culture, shifting customer behaviour

Aliments is a data-driven food ordering platform that claims to have grown its business about 400 per cent over the last six-plus months. The firm hopes to expand nationwide and regionally by 2022.

Despite the massive potential, the amount of investment pumped into the sector has been insignificant.

However, Hui Ru of Kitchen Connect foresees investors will inject into the market in the coming years. “With several new players coming on board into the Malaysia market, we anticipate more investors pumping in investment to sustain the business long term. And with the pandemic becoming endemic, consumer behaviour shifts (more open to food delivery and online payment), more delivery-only kitchens will bloom, attracting more funding.”

Experts believe that virtual kitchens will stay here even post-pandemic and become a part of the new norm like online/contactless ordering. Bringing the best experience with technology solutions is the key to striving in this current and future market.

“Overall, the pandemic has boosted the growth of cloud kitchens. The question is whether this will be a temporary trend or will it continue post-pandemic. The answer is that it all depends on the product’s characteristics, how well cloud kitchen operators leverage the available technology and demographic of the target consumer,” Aliments’s Lee Teng shared.

“But similar to all other trends, it will go into a consolidation period. Only those that grasp the key elements (product, marketing, tech) of running a cloud kitchen will remain and thrive,” Lee concluded.

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Image Credit: CookHouse

 

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Fonos, a Vietnamese digital audio content startup, has secured US$1.1 million over two rounds of seed funding, led by Singapore-based AngelCentral Syndicate.

Other investors that participated in the round are HustleFund and iSeed, alongside prominent local angels, including Thai Van Linh (a well-known local investor on the TV show ‘Shark Tank Vietnam’).

The Ho Chi Minh-based startup will use the new funding to expand its content library with products and services such as audiobooks, book summaries, guided meditations and to venture into new types of audio and written content.

Founded in 2020 by Oscar Jesionek and Xuan Nguyen, Fonos gained prominence in the local audiobook space with standardised in-house audio recordings made by professional narrators. 

The firm produces short 10-15-minute book summaries, guided meditation, stories, news, and offline reading options. Its audiobooks are multi-genre, ranging from fiction, classics, economics to startups. Of these, non-fiction books are the most popular. 

Also read: NOICE, a podcast network founded by Indonesia’s minister, nets 7-figure USD funding

“We want to have something great for listeners for all types of situations,” Jesionek explaining his “super app” vision. “We’re listening closely to what our users are telling us and plan to grow our content library accordingly.”

Jelinek told e27 that the current transition to paid audio content is a boon for the media industry in Vietnam because companies like Fonos could reinvest into their products.

“There is a real demand for high-quality content that can be consumed on the go by Vietnamese millennials,” CEO Oscar Jesionek said. “For a long time, people thought that Vietnamese would not pay for digital content. With us as an example, you can see that this is not true.”

Fonos claims it exclusively features hundreds of best-sellers by both international and local authors. It has also formed partnerships with many leading local book publishers such as Tre Publishing House, Alphabooks, Thai Ha Books, Nha Nam, and Dong A. 

Despite the stringent lockdowns and social-distancing measures, Fonos claims it witnessed a 5x growth in monthly revenue since the beginning of the year. Its monthly active userbase also spiked to over 80,000 in August alone.

The audio content market in Southeast Asia has become crowded in recent years. Not only prominent players such as Spotify and Apple Podcasts, but even startups like Clubhouse, are giving local businesses a run for their money.

“They also have some disadvantages. For example, their lack of local content,” stated Fonos CEO. “If you go on Apple and Spotify, the only type of local content they have is podcasts, and these are not exclusive. So we’re not competing on the same type of content.”

With a population of more than 90 million, coupled with the smartphone penetration rate being in the top 10 globally, Vietnam is one of the fastest-growing markets for digital mobile-first content.

Based on eMarketer 2019 data on digital audio listenership and voice assistant usage, the digital audio listener base exceeds 300 million across countries, including Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam.

Therefore, beyond Vietnam, Fonos is paying close attention to other markets in Southeast Asia.

“We are keeping a close eye on it, but in the short-term, we’re not actively working on going international right now,” shared Jesionek. “We see a ton of potential here in Vietnam that still gives us so much room to grow.”

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Image credit: Fonos

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Indonesia’s startup ecosystem tends to be described with words such as “emerging”, “nascent”, and “potential”. But are these words still apt for a nation that clinched 70 per cent of total VC funding in Southeast Asia last year?

The question on everyone’s lips is whether 2021 could be the breakout year for Indonesia’s startup economy. What would it take for the narrative to shift from ‘emerging’ to ‘established’ or ‘globally competitive?

A tale of two valleys

The answer lies in looking at another startup ecosystem that has followed a similar trajectory to what we’re now seeing in Jakarta. 

São Paulo in Brazil could provide strong indicators for this pathway and is a strong example to follow –it is currently ranked in the top 20 cities for startups, the highest-ranked city in all of Latin America (LatAm).

It is a sprawling city of 12 million that rivals Jakarta’s 10 million, but the two cities have more in common than just population numbers. Both have a tech-forward population.

Internet penetration in Indonesia stood at 73.7 per cent in January 2021, compared to Brazil’s 75 per cent. Social media users in Indonesia are equivalent to 73.7 per cent of the total population, compared to 70.3 per cent in Brazil. 

Both markets are also seeing strong growth in the middle class, with an associated rise in overall spending power. Brazil’s middle class comprises more than 113 million people, up 40 per cent since 2003.

Indonesia’s middle class now numbers more than 52 million. This is the fastest-growing population segment, rising 10 per cent annually, and now accounts for close to half of national consumption.

Also Read: Everything from soup to nuts: Meet the 27 ghost kitchen startups in Southeast Asia

The ingredients for startup ecosystem maturity

With such foundational similarities in market conditions, the factors that have propelled São Paulo into the world’s top 20 startup cities are of particular relevance to Jakarta, in particular:

• It has become LatAm’s home of innovation and has seen an associated rise of unicorn businesses. Today, São Paulo is home to eight unicorn businesses, compared to Jakarta’s five.
• It has seen strong government commitment to grow the ecosystem in recent years, such as the launch of a new legal framework for startups. There is also InovAtiva Brasil, a public programme considered the largest acceleration program in Latin America and supported startups by connecting them to market and investment opportunities.
• It has built a strong international reputation, rather than just local. It is a regional decision-making hub for 65 per cent of Fortune 500 companies and large global tech companies such as Google, Amazon, and Netflix (as well as Stripe, of course!).

These three indicators  –innovation, public-private collaboration, and internationalism– could be the three things Indonesia needs to measure itself on to gauge its progress in following in the footsteps of São Paulo and achieve the goal of startup haven status.

Innovation: The rise of invention and reinvention in the Indonesian economy

The recent merger of Gojek and Tokopedia to form the GoTo Group demonstrates the emergence of two of Indonesia’s most innovative digital startups onto the global stage.

However, one of the most exciting elements of Indonesia’s ecosystem is the ground-up innovation we are now seeing across the board. Creative and ambitious people are driving ideas and growth. If necessity is the mother of invention, then ambition is the mother of reinvention. 

Traditionally offline industries such as education, retail and health sectors see an injection of innovation from entrepreneurs looking to bring these services online and available across the archipelago.

For instance, Kiddo is re-energising the education sector with a marketplace where parents can book online and offline activities for their children.

Also Read: Capturing the next frontier opportunities in the Indonesian e-commerce landscape

In retail, Utas is a website builder that brings Indonesian companies into the e-commerce space. The company recently struck a partnership with the Ministry of SME and Gojek.

And in health services, startup Riliv offers online counselling and mental wellness services. Powered by Stripe, the Surabaya-based startup has seen an 85 per cent increase in demand for online counselling and subscriptions since the COVID-19 pandemic began and acquired 230,000 users.

The timing of these success stories isn’t coincidental– in the past, any of these startups would have trouble converting their great idea into a revenue-generating business online. Now, the infrastructure is becoming available across the nation to democratize opportunities for budding entrepreneurs.

Government impetus

Alongside this ground-up innovation, the public-private collaboration also has an increasingly influential role in pushing its startup economy forward.

From Kemkominfo’s Aptika Directorate-General for Digital Innovation Hub programme to Bank Indonesia’s Sandbox 2.0, the government is putting the growth of the startup economy very high on the agenda.

These initiatives put a strong emphasis on ensuring all elements of the innovation economy in Indonesia – government, VCs, corporates and startups –are working together effectively.

Stripe is also partnering with several venture capitalists and accelerators like Alpha JWC, AC Ventures and SMDV to support startup growth, from on-the-ground community learning sessions to free processing credits to early access beta programmes. 

This private-public collaboration in Indonesia is key to fostering a conducive environment for startups to flourish, not just through policies and initiatives but also through real-world learning. 

The crucial next step: Internationalism

So while Indonesia is making strong strides in innovation capability and public-private collaboration, perhaps the biggest gap that needs to be overcome in the coming years is building a stronger international reputation and a more international mindset. 

While Indonesia’s domestic market is strong, the startup economy cannot hit full maturity until it begins to see a more regular pipeline of Indonesian startups expanding beyond national borders and attracting more outside investment from the rest of the world.  

With the scale of the domestic market, it is unsurprisingly that the vast majority of new startups in Indonesia are not born with global ambitions. While this works for the short-term – considering the scale and untapped potential internally – to realize their full potential, Indonesian startups must eventually look outwards.

Also Read: The 27 Indonesian startups that have taken the ecosystem to next level this year

As barriers to growing a global business online are gradually removed, there is a massive regional and global opportunity on offer for Indonesia’s most ambitious entrepreneurs. 

The newly merged GoTo Group is a fantastic example of this. Both Gojek and Tokopedia utilised the local environment they grew up in to create products –and now an entire digital services company– designed to meet the needs of an international audience.  

The role of GoTo Group and other Jakarta-based unicorns such as Bukalapak and Traveloka serve to inspire local entrepreneurs that they can now convert their great ideas into global businesses and raise the profile of Jakarta’s scene to international observers. The more examples we see like this, the more Indonesia’s reputation on the international stage will grow.

With the pace of development and innovation over the past year alone, it feels like Indonesia’s startup economy is on the verge of something inspiring. With this continued momentum and a stronger international focus, it may not be long before São Paulo, and another top 20 global startup cities begin looking over their shoulders.

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Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

Join our e27 Telegram group, FB community, or like the e27 Facebook page

 

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Singapore-based Borneo, which provides a real-time data security and privacy observability platform, has raised US$15.5 million in a Series A investment round led by Vulcan Capital.

Vulcan was also joined by Prosus Ventures, Lytical Ventures, and existing investor Wavemaker Partners.

This round brings Borneo’s total funding raised to date to US$18 million.

The company will use this fresh capital to continue investing in its technology platform and meet growing customer demand. As per a press statement, Borneo is already working at a cloud-scale at some of the fastest-growing technology companies and is seeing overwhelming demand driven by technology IPOs.

Also Read: The third world war may already be happening online. Here’s why you need better cybersecurity

Borneo is a privacy information and data management platform offering security and privacy solutions for hyper-growth technology companies through real-time privacy data observability and insights. Its developer-first suite of tools to identify high-risk and sensitive personally identifiable information through sophisticated machine learning techniques and open APIs.

It integrates with existing tools and workflows and enables companies to achieve privacy compliance by building a solid data security foundation. This allows security practitioners to utilise non-blocking workflows and fast-track remediation without hampering business teams operating in fast-moving and high-growth environments.

The firm claims it has tackled and solved privacy challenges at global, hyper-growth companies such as Facebook, Dropbox, Uber, and Yahoo!.

“Borneo is fast becoming the guardrails for the new data economy. We integrate with your existing security stack to provide the required privacy data intelligence. It prevents data leaks and privacy violations that can result in multi-million dollar fines and erode end-user trust,” said Prithvi Rai, CEO and founder of Borneo.

Sachin Bhanot, Head of Southeast Asia Investments at Prosus Ventures, said, “More than ever, companies are managing a high variety and volume of data while navigating increased pressure from both consumers and regulators on data privacy practices. The Borneo team has created an adaptable, robust, and efficient platform to address these challenges.”

Also Read: Cybersecurity threats on the rise as companies shift to the WFH model

Vulcan Capital is the multi-billion-dollar investment arm of Vulcan Inc., the company founded by Microsoft co-founder and philanthropist Paul G. Allen.

Prosus is a global consumer internet group and one of the largest technology investors in the world.

Lytical Ventures, an affiliate of Lyrical Partners, is an NYC-based fund dedicated to corporate intelligence, including cyber security, data and analytics, and AI.

The post Ex-Uber security head’s startup Borneo raises US$18M led by Vulcan Capital appeared first on e27.

Today we centre our attention on the Spanish startup ecosystem and what it is like being a female entrepreneur trying to navigate the system.

There are many factors that make this ecosystem unique. While the number of unicorn startups in the country remains limited, especially when compared to the Southeast Asian region, lately investors have begun to flood into the local tech hubs –particularly those that focus on early stage investments.

But what else do we need to know about it?

Today’s guest is Emily GC Lomban, the CEO and Co-Founder of Froged, a Spanish startup focused on helping companies improve customer onboarding and retention while reducing churn rate.

She will tell you about the Spanish startup ecosystem, the challenges and opportunities faced by local players, and more importantly, how she navigated the challenges of being a woman in a male-dominated industry. Because, yes, this is a challenge that continues to resurface in every startup ecosystem around the world.

Also Read: Akulaku CEO William Li: ‘Asia’s BNPL sector has great potential compared to Europe’

So if you have never heard about the Spanish startup ecosystem before, and would like to learn more about it, check out this episode featuring Lomban:

If you don’t see the player above, click on the link below to listen directly!

Acast
Apple
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Stitcher

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This article on the Spanish startup ecosystem was first published on We Live To Build.

Image Credit: ©Violin/123RF.COM

The post Understanding the Spanish startup ecosystem with Emily GC Lomban appeared first on e27.

The global economy has been rapidly changing over the past year since the COVID-19 hit. While some companies managed to thrive, others have suffered.

The economy will never be the same again. Most brick-and-mortar businesses are forced to digitalise their businesses, or they face the risk of extinction. Old businesses that have worked in the past 50 years may not be able to survive in the next few years to come.

Kelvin Seetoh and Jonathan Ang, who are founders of The Full-Time Investor, speak out about what investors must look out for if they want to continue to do well in the next few years:

Investors look for value creation

In order for the value of a company to be growing, the people driving the company must be constantly seeking to address the problems that customers face, to be innovative in creating new solutions that are more effective in solving the problems, and doing it more efficiently, so as to create ever more value for customers and society.

We resonate with Abraham Lincoln that the best way to prepare for the future is to create it. We believe that massive value and wealth will be created by investing in and partnering with future innovators and creators.

Purpose-driven and capable leadership for investors

When we invest in companies, we are not merely investing in any corporate structure or corporate assets. We are investing in people.

We are tapping into an entrepreneur’s ambition, talent, energy and ability to bring like-minded individuals on his journey to transform the world into a better place through his business.

Our role is to sieve out such incredible people and invest in their listed entities. Some of our favourite management include the Rales brothers of Danaher Corporation, Albert Nahmad of Watsco, Mark Leonard of Constellation Software and Jeff Bezos of Amazon.

Also Read: A wave of change: What sets impact investing apart from traditional investing

These entrepreneurs did not create a business purely to make money. Instead, they are imbued with enthusiasm to make this world a better place.

To this group of entrepreneurs, a problem is nothing more than an opportunity. An opportunity to bridge the gap between potential solutions and the problems.

An opportunity to create solutions to meet customers’ needs, and to create value for society. By creating more value for the world, they are rewarded financially. They are problem solvers and they are trailblazers.

We believe by having a vision but not executing it, it is no more than a nice dream.

We want to partner with leaders and management teams who are not only visionaries but who are willing to create a better future by taking actions to make their vision a reality.

Holistic ecosystem empathy

A holistic ecosystem is an approach to viewing the organisation’s assets, talents, partnerships, with the goal of better understanding and serving the needs of customers and society.

This is not a purely functional or mechanical approach. Rather, it is driven with empathy at its core. The inherent drive to understand the needs of others, and being aware of their thoughts and feelings, so as to better align all elements of the ecosystem to create a true win for all.

In fact, research has shown that empathetic people are capable of recognising the pain of others as a problem that is in need of a solution. This is the foundation of Value Creation that lies at the core of all quality businesses.

Out of this empathy framework, we created a “win-win-win” approach. In any business transaction, the company must win along with its employees and customers.

It is important for a company to make profits to keep its operations running, but it should not sell with a mentality of extracting the last dollar from its customers. This means creating wins for customers by charging them fair prices for the products or services delivered.

Also Read: Why UK is the new global tech capital for Southeast Asia entrepreneurs

A company should take on a long-term approach. Focus on the happiness of its customers by cultivating lifelong relationships with customers as opposed to one-off transactions.

Businesses who think of the best interests for their customers tend to grow faster because they enjoy strong marketing tailwinds from influential word-of-mouth and customers.

The best businesses tend to enjoy such benefits without spending huge advertising dollars because the product sells itself. The value proposition is clear and the customers enjoy it.

Simplicity in complexity

As Peter Lynch who was a successful fund manager once said: “Never invest in any idea you can’t illustrate with a crayon.”

We love to operate within our circle of competence. We think it is extremely foolish to reverse the compounding process by operating outside our circle of competence. This adds risk to our investment process.

Mathematically, should our investments go south, more effort is needed to recover its losses.

If we do not understand some companies, we put them into a “too hard” pile. We find that it is perfectly fine to miss out on opportunities that we do not understand. Having said that, we see ourselves as life-long learners who are fueled by our intellectual curiosity to understand the world better.

This ensures our circle of competence gets enlarged over time. It’s extremely dangerous to be the frog in a boiling pot that is oblivious to how the world is changing and sticking with our old lenses in an evolving world.

Over time, we realised the best investment ideas are compelling enough that it does not require too much convincing work to underwrite the investment.

The worst ideas are those that require hours of deliberation with no clear conclusions. In this situation, we may end up convincing ourselves to keep them because of our sunk cost fallacy arising from our psychological biases.

With regards to macroeconomic news, it is filled with complexity which many investors try to decipher with very little success. We wonder what is the value-add to our research process. We deem this as noise. What is useful to us is signals.

This refers to corporate developments such as expansions, strategic hirings, new product releases or collaborations with other companies. It is quantifiable to some extent and it signifies the pace of execution within the company. As we shift our attention more towards signals, we outperform as investors.

When you treat your investments like partnerships, it will drastically change how you choose to invest. By investing our money with those companies we selected, we are partnering with the best management teams.

Also Read: Investing with gender lens: Proven strategy to achieve 2x+ in returns

It’s the most rewarding journey of growing our wealth by supporting these transformative companies. We hope to inspire a new generation of investors who will see investing as a vote towards supporting these companies.

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No matter where you are, the world of work is changing. Singaporean youth have struggled to find work during the pandemic; we’ve seen estimates that only nine per cent of the US workforce will be employed full-time by 2030.

Data entry and customer service tasks once completed by humans are now being passed off to faceless machines and bots. At every turn, headlines claim we’ll lose millions of jobs permanently to devices of our own creation.

Already, we can imagine how different things will be in the coming decades. Rapid industrialisation has caused demands for energy and water to potentially increase 40 to 50 per cent by 2030.

Integrated ecosystems—”internets”—of humans, robots, and machines are consuming and producing record-breaking amounts of data, demanding more energy and resources. Manufacturing, sustainable energy, waste management, and other industries have already begun to revitalise for a tougher future. 

Nurturing the next generation of talent—one that stands firm in the face of automation and other emerging developments—means preparing them to solve problems that do not yet exist.

Resources and next steps are out there: take Young NTUC’s LIT Discovery 2021, for example.

This fully online event featured a smorgasbord of exciting panellists, and also provided job seekers access to guidance, career opportunities, and insights on the future of work.

What else can be done to nurture the next generation? Read on to find out.

Also Read: Meet Inavoice, your new go-to platform for voice-over talents and background musicians

New talents need more hands-on experience and mentorship

Lynn Dang, HR Leader at Microsoft Singapore, mentioned that LinkedIn saw a five-fold increase of remote work job postings during the pandemic.

Today, 16 per cent of all companies worldwide are already fully remote. Blurred regional boundaries make it possible for people from all across the world to work and collaborate.

Additionally, it’s estimated that, by 2035, over 40 per cent of jobs will be displaced by Big Data, AI, and automation. About a third of all employees expect their jobs to be fully automated in three years.

Tech talents of the future must be prepared to work alongside technology. This requires a shift towards creative problem solving, critical thinking, and adeptness at utilizing machines, data tools, and bots. 

“If you can adapt to this environment, then your opportunity is not just limited to Singapore. You can tap into opportunities anywhere in the world,” says Ho Seng Chee, Chief Corporate Officer at JustCo.

Companies seeking to turn the key on remote and hybrid working arrangements can:

• Delineate clear processes and platforms to facilitate asynchronous remote work
• Create a minimum standard of communication and availability
• Offer one-time stipends for talent who don’t have home offices
• Invest in talent by covering the costs of developmental courses

And what do these developments mean for talent? The competition will become tougher, and it’ll take more effort to stand out from the crowd. Young graduates, mid-career switchers, and general job seekers will benefit from mentorship and education about different work cultures and communication styles—especially in Asia, where many cultural differences are at play. 

(Micro)certifications like the ones offered by Google, Amazon Web Services, the Project Management Institute (PMI), and massively open online courses (MOOC) can help talent get up to speed with emerging technologies and strengthen their skillsets.

The career programmes like the ones offered by Young NTUC’s LIT (Learning is Triggered) Series are even more valuable because they deliver a combination of hands-on experience, mentorship, and theory.

Building awareness of the tech opportunities

In the face of global challenges, many new industries are emerging. Two of the most exciting are green technology (greentech) and financial technology (fintech).

The challenge of climate change

Despite its harsh environmental impact, the global oil and gas industry is one of the top ten fastest-growing industries in the world.

Hastened by regulatory and consumer pressure, oil and gas conglomerates (and businesses from many other sectors) are partnering with greentech firms to achieve their Environmental, Social, and Governance (ESG) goals.

Also Read: The hunt for talent: How to attract world class entrepreneurs to corporate ventures

Grace Fu, Minister for Sustainability and the Environment, stated during the LIT Discovery 2021 event that “many things will be reimagined: supply chains, industry—so that we consume less energy, less fuel, and produce less CO2. All these will require re-engineering.” 

Helming this re-imagination of industry are a bumper crop of incredible green startups like ATEC Biodigesters International, Third Wave Power, Sensorflow, RAD Green Solutions, and Cleverheat. They’re all hungry for fresh talent with skills in engineering, operational and supply chain management and process monitoring. 

“Everything we do has an impact on the environment and the people,” reminds Esther An, Chief Sustainability Officer at City Developments Limited. “We can make a positive change.”

The challenge of financial inclusion

Home to over 40 per cent of all fintech startups in the region, Singapore is known as the hub of fintech in Southeast Asia. In 2020, the industry employed over 10,000 people and has received a cumulative US$2.5 billion in funding over five years.

Indonesia, meanwhile, boasts various startups that have been hailed to boost financial inclusion. These include digital payment system OVO, P2P lending company Koinworks, and blockchain company Tokoin.

Irene Lim, Executive Director at J.P. Morgan, defines fintech as any kind of technology that can be applied in financial use cases. This includes technologies for insurance, taxes, and personal wealth.

She notes the high demand for software developers, blockchain experts, cybersecurity leaders, data specialists, and DevOps specialists.

Doing the impossible

The next generation of talents must prepare themselves to master technologies that have not yet been invented to solve problems that do not yet exist.

What can we do?

Nurture soft skills

We need to prepare the next generation of talents to work optimally in such an environment by teaching digital literacy as early as possible. 

Increase exposure to tech

Talent must be taught to work harmoniously alongside emerging technologies to lead teams and manage projects to their desired goals. 

Welcome talents from other industries

Robots can follow instructions much better than humans can. Therefore, talents need to make full use of their non-technical skills and backgrounds to improve the way technology is used. Creative individuals are a boon.

Case in point: Lin Yanxiang, now the Deputy Group Director of the Manpower and Strategy Planning Group at Building and Construction Authority, got her career start as an English teacher. 

Take more chances on non-traditional talent

According to Eric Lim, Chief Sustainability Officer at UOB, “We are starting to see a corporate track that’s coming up where talents don’t need to come from a strong risk or banker background.”

Also Read: How Endowus co-founder Samuel Rhee attracts, builds, and maintains a world-class team

Recruiters can take a chance on bright talent from fields like the arts, history, and social sciences.

Revamp industry through cohesive marketing efforts

Yanxiang remarks, “We can shift these sectors away from something that’s perceived as dirty, dangerous and demanding into one which is modern, technologically advanced, and can offer good jobs and working environments for the people.” This will encourage talents to view industry careers as meaningful opportunities.

Improve access to opportunities

Executives and leadership can take the initiative to develop accessible training and internship programmes for people of all backgrounds. A commitment to fairer, less discriminatory hiring can also go a long way.

With a thorough understanding of these technology trends, the task of nurturing the next generation of tech talents does not seem so impossible, after all.

By fostering these various skillsets, the next generation of tech talents will be ready to adapt and learn new technologies as they come. They will be well-equipped to solve the problems of the future and be fully ready to make the most of their opportunities.

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SIRCLO, a company providing e-commerce solutions that help brands sell online in Indonesia, announced today it has raised US$36 million in a new round of financing, led by local investment firms East Ventures (Growth Fund) and Saratoga.

Online travel giant Traveloka, real-estate major Sinar Mas Land and several unnamed investors also participated.

With the new funding, SIRCLO plans to develop its technology infrastructure and expand its services to accelerate retail digitalisation for various businesses all across Indonesia.

“With this new funding, we plan on building our momentum as consumer spending in e-commerce has picked up during the pandemic and beyond. We continue to help brands sell online using the omnichannel approach. Their success stories in extracting more value in our ecosystem propels our rapid growth even further as we continue to make significant upgrades to our solution offerings to future-proof the success of our clients,” said SIRCLO founder and CEO Brian Marshal.

Founded in 2013, SIRCLO helps businesses sell online. Its solutions are divided into two main categories — entrepreneur and enterprise solutions.

Also Read: SIRCLO raises US$6M Series B from East VC, others to help SMEs in Indonesia

In the first category, it offers SIRCLO Store, an online store dashboard for SMEs to sell across website, marketplace, and chat commerce. It also offers IbuSibuk, a solution empowering communities of mothers as key opinion leaders, micro-influencers and resellers.

In the enterprise category, it offers e-commerce enabler services, a solution for omnichannel technology development, and a B2B2C platform selling mom and baby products. It also offers a parenting platform Orami, which it acquired in April.

Orami runs IbuSibuk, a digital economic empowerment programme for mothers, specifically for those passionate about entrepreneurship.

In August last year, SIRCLO announced a US$6 million Series B fundraising from a host of investors, including East Ventures, OCBC NISP Ventura, Skystar Capital, Sinar Mas Land.

Today, SIRCLO claims to have served more than 100,000 brands. The list includes local brands such as ATS The Label, Evete Naturals, Namaste Organic, This Is April and Heytimmy Kidswear. Its MNC clients include Unilever, Reckitt, KAO, L’Oréal, and Levi’s.

The e-commerce industry in Indonesia has grown considerably since the onset of the COVID-19 pandemic. Almost half of the country’s population uses digital technology for their daily needs, which shows significant growth potential.

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Image Credit: SIRCLO

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Thailand’s National Innovation Agency presents SITE 2021 — DEEPTECH RISING: The Next Frontier of Innovation, is set to be held virtually on 15 – 18 September 2021. The real-time event will show the next big thing in the world of startup and innovation. Accessed via the NIA website, https://site.nia.or.th/, all are welcome to join, free of charge.

The COVID-19 crisis has propelled us into the future, with new ways of living and working. Companies have had to evolve, particularly in the MICE industry, as technology plays a greater and greater part in our everyday lives. For this year’s event, the NIA has merged two of Asia’s most exciting expos, Startup Thailand and Innovation Thailand, and transformed them into a 100% online and immersive experience.

SITE 2021 – DEEPTECH RISING: The Next Frontier of Innovation

The programme will present the five fields of deep tech that are predicted to drive Thailand’s future: Agriculture (AgTech), Food (FoodTech), Medicine (MedTech), Space (SpaceTech), and Artificial Intelligence, Robotics and Virtual Reality for People (AI Robotic Immersive IoT: ARI Tech). AgTech and MedTech in particular, are aligned with the government’s Bio-Circular-Green economic model.

Also read: Harnessing sustainable technology to build a resilient future with IPI

There will be four main activities spread across the four days:

1. Virtual Forum: more than 60 speakers from leading startups in Thailand and around the world will present their innovations and share their experiences on more than 50 topics.
2. Opportunity: presenting opportunities to connect with potential partners through organised activities such as Marketplace, with more than 200 virtual booths; Online Business Matching, with more than 30 business entities; and Online Business Consulting with more than 30 experts in 10 industries.
3. Show: audiences from around the world will also enjoy the opportunity to watch entrepreneurs highlight their deep-tech successes.
4. Awards: presenting the prestigious Prime Minister’s Awards to those supporting the development of Thailand’s startup ecosystem and promoting startups in the international market.

Enjoy the cutting-edge 360° immersive experience

This year’s platform has been built from the ground up by Thais to great acclaim, creating a 360° immersive experience. Visitors will feel like they are at the physical event: they can chat with operators in real-time and participate through avatars. Data and audience feedback from around the world will be processed through social listening tools and artificial intelligence.

Also read: MaGIC graduate PABLO AIR — Leveraging drone technology for social impact

“We believe that this platform is the future of innovation and the startup ecosystem in Thailand”, says Dr Pun-Arj Chairatana, Director of the NIA. “Therefore I would like to invite all the innovators and those interested in technology to visit our event. Together we can address the challenges of COVID-19 and plot a path to a brighter future”.

Access the STARTUP x INNOVATION THAILAND EXPO 2021 on 15-18 SEPTEMBER 2021. All sessions are free! For more details, please log onto the programme’s official website.

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

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