Singapore sits at the helm of Southeast Asia’s vibrant tech ecosystem with an internet penetration rate of 88.9% in 2019, the highest in the region. With the recent global health crisis accelerating digitalisation across the globe, the country has undoubtedly grown into becoming a centre for fintech innovation, pushing the adoption of fintech by traditional financial institutions as they seek ways to innovate and transform.

Tapping on the growth of fintech in Singapore, the Australian Trade and Investment Commission (Austrade), through its accelerator programme Landing Pad, has been active in bringing technology scaleups to ASEAN as a way to help meet the gaps in the fintech ecosystem in the region. An example of how they do this is through their strategic partnership with Firemark Accelerate, Insurance Australia Group’s (IAG) leading insurtech accelerator in APAC. Across two 12-week Seasons per annum, both Austrade and the Firemark Accelerate team support scaling Australian startups into the region. Scaleups are recruited based on their ability to bring cutting edge technology from four key focus technology themes: climate risk, disruptive technology, cyber risk, and computer vision.

Also read: Startup x Innovation Thailand Expo 2021: A virtual world of innovation

“Firemark Accelerate and Austrade are an excellent partnership to launch Australian technology scaleups into Singapore and the wider APAC market. This co-delivery partnership brings together Firemark’s expertise in technology and innovation, and Austrade’s knowledge on navigating overseas markets and connecting Australian businesses to the world. Following the success of the first season, we have now expanded our partnership to support the market expansion activities of another six scaleups across deep tech, cybersecurity and digital services,” said Austrade’s Senior Trade and Investment Commissioner, Stephen Skulley.

Australia’s insurance industry is currently at the ideal size and scale to help insurtechs test, learn, and grow. According to KPMG, between the financial years of 2018 to 2020, Australia has experienced a 53 per cent increase in the number of insurtech companies in the country. These developments, both in terms of industry growth and consumer behaviour, makes Australia a hotbed for innovation and diversity. As such, promising scaleups from the country are in the best position to broaden their reach and go global.

Why these Australian scaleups chose to land in Singapore

With both economies sharing similar growth paths in their vibrant tech ecosystems, these six Australian scaleups saw a great opportunity for growth.

“Singapore is well known for being the technology and innovation hub of Asia. ActivePipe is excited to be able to leverage this to mature its data capabilities and build a world-class data strategy with Firemark Accelerate,” said ActivePipe, one of the six Australian companies from the Firemark Accelerate Season 2. Founded in 2014 by co-founders Ash Farrugia and Gavan Stewart, ActivePipe builds, sells, and services lead nurturing and sales enablement software for Real Estate brokerages, agents, and mortgage brokers.

ProofTec, an automated AI damage detection solutions provider for vehicles echoed these sentiments. “Singapore is the logical stepping stone for our AI solution given the mature stakeholder ecosystem and the gateway for our business to springboard into other regions across ASEAN. According to Cisco’s annual Digital Readiness Index, Singapore is the world’s top nation in terms of digital adoption which makes it an ideal market entry point for high tech companies like ProofTec,” said the company’s Founder, Danny Cohen.

ProofTec’s vehicle damage detection platform has been designed specifically for the mobility sector and provides many tangible benefits to the car rental industry. Some of these material benefits include reduced risk, transparency, excess recovery, staff efficiencies, and asset management.

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

Gruntify, a scaleup that helps digitise manual or disparate business processes, is also looking to scale globally, with its sights set first on Singapore. Founder Igor Stjepanovic, shared “Singapore’s strategic location in Asia paired with their business-friendly environment makes it, in our opinion, a perfect choice as a ‘springboard to broader Asian market’ which we are looking for!”

Gruntify helps clients save time and money as well as lower the risks involved in the implementation and operational aspects of digitalisation. Their technology helped aid the Queensland government’s response to the state’s largest natural disaster, cyclone Debbie, that occurred in 2017.

Other scaleups that saw value in a Singapore expansion are SHEQSY, Truuth, and ValAi. 

SHEQSY, a cloud-based lone worker safety solution, CEO and Founder, Hays Bailey, explained that they chose Singapore because of its “incredibly developed economy and strong regulatory frameworks. As the Asian headquarters for many international firms, Singapore is the perfect launchpad and the gateway to Asia.” he went on to share “SHEQSY aims to improve the safety of employees and contractors working alone in developed and developing regions in Asia.”

On the other hand, Truuth, whose mission is to mitigate the risk of identity fraud by delivering the world’s most secure, accurate, and user-friendly digital identity services shared that they are building Truuth as a global platform with Singapore and the broader APAC region being one of their primary target markets. CEO and Co-Founder Mike Simpson said, “We all know that Singapore embraces new technologies and business models, so we see this as a great fit for Truuth, as our technology is world-leading and our business model is disruptive. As we plan for our Series A funding round, Singapore is a key market for Truuth to have a presence in.”

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

Lastly, ValAi, a scaleup that builds tools anchored on sustainability specifically targeting the finance and insurance sectors, said that “Singapore is well known for its ‘Humility to succeed’. One characteristic we admire is the humility to learn and openness to new ideas. Innovation, creativity, sustainability and resilience are all demonstrated in Singapore’s business culture.”

Greenhouse, their core product, is a knowledge platform and marketplace where bank and insurance customers can determine the sustainability rating of their homes and how they can improve their ratings, whilst providing data insights to the insurers and lenders so that they can green tag their portfolio and create incentives for their customers with lower premiums or interest rates.

Creating success in Singapore

Coming from Season 1 of Firemark Accelerate, Detexian has seen early successes ever since the programme, especially after partnering with three fintech SMEs in Singapore. Detexian is an Australian scaleup that offers an automated risk management solution for businesses powered by SaaS applications. Some of the deals they’ve landed include Lab Group Services Pty Ltd (Lab Group).

Tan Huynh, CEO of Detexian, shared “Staying on top of multiple SaaS apps without automation is an impossible endeavour. We help Singapore modern workplaces continuously track their SaaS use at ease, minimising risks and cost wastages.”

Connect with Austrade today

For more information, scaleups that are interested in expanding to Singapore can connect with Austrade Landing Pad via the official website. For more information on IAG Firemark Accelerate, you can check out their official page here.

Singapore Fintech Festival 2021

Keep a lookout for our Australian e-booth at the upcoming Singapore Fintech Festival 2021, where we will be showcasing Australia’s innovative fintech ecosystem. More details to come for your opportunity to connect directly with Australian fintech businesses and associations. #AustraliaSFF2021

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Photo by Patrick McLachlan from Pexels

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This article is produced by the e27 team, sponsored by

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The latest report from the Intergovernmental Panel on Climate Change (IPCC) presents a not-so-bright future for our planet. We are likely to reach or exceed 1.5 degrees C of warming, the ambitious limit set during the 2015 Paris Agreement. In fact, the current atmospheric concentration of carbon dioxide is 417 parts per million (ppm), almost double that of pre-industrial levels. 

There is little doubt that climate change is threatening city infrastructure, food production, and health. Unpredictable weather patterns, decreased harvests, and supply chain disruptions will drastically affect food security. Furthermore, higher temperatures increase the risk of illness and affect other aspects of health like air, water, and shelter.

But we can take steps to alleviate these harmful effects for ourselves and future generations, such as by harnessing the power of sustainable technology. Transformational changes are needed to make cities sustainable and resilient in the face of these challenges.

One such technology which has helped mitigate the negative effects of climate change is solar power, a much more environmentally friendly form of electricity compared to traditional sources like fossil fuels. In July, Singapore-based Sunseap Group announced a US$2 billion project to build the world’s largest floating solar farm and energy storage system in Indonesia. Other technologies like electric transport and sustainable buildings can also help upend some of the consequences of climate change.

TechInnovation, a premier technology-to-industry matching event, is back for the 10th edition

To help industries fully leverage sustainable technologies, Singapore-based innovation catalyst IPI is holding its tenth edition of TechInnovation, its yearly technology brokerage event, from 28 to 30 September 2021. In light of emerging climate change-related challenges, this year’s theme is ‘A Sustainable and Resilient Future’.

This theme was selected because of the new and emerging challenges that the world is facing, said Wong Lup Wai, chief executive officer at IPI.

“Climate change has created challenges on cities’ infrastructure, carbon footprint, food production, and health,” said Wong. 

TechInnovation is IPI’s flagship technology brokerage event. It will bring global technology providers and enterprises together to foster open collaboration and facilitate the commercialisation of emerging sustainable technologies.

During the event, attendees can hear from a variety of speakers and thought leaders, such as executive director of Energy Research Institute Prof Subodh Mhaisalkar and AgFunder’s Asia director John Friedman.

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

Attendees can also use TechInnovation to explore partnership collaborations with corporates crowdsourcing for new ideas and solutions, and discover technologies for commercialisation. The event is also a conducive platform for connecting with collaborators and mentors, allowing for one-to-one meetings through chat and video.

“What differentiates TechInnovation is that the organiser, IPI, actively matches the technology showcase providers with industry and participants that have indicated their needs to forge collaboration,” shared Wong. 

IPI’s role as a catalyst allows TechInnovation to serve as a springboard for enterprises to accelerate innovation, providing them access to the tools and insights necessary for ultimate business growth.

Key focus on sustainability, nutrition, and health

In this year’s edition, TechInnovation will focus on showcasing innovative technologies to achieve sustainability in the areas of resource consumption, food production, and healthcare provision. The topics are:

1. Green & Sustainable Future — Day 1 (28 September)
2. Sustainable Food & Nutrition — Day 2 (29 September)
3. Health & Wellness —  Day 3 (30 September)

On Day 1, sessions will revolve around the theme of ‘Green & Sustainable Future’. The event will start off with two keynote sessions, ‘Powering a Green and Sustainable Future’ and ‘Designing a Sustainable Future for Our Planet’, before diving deeper into three thematic sessions. In chronological order, these are ‘Crowdsourcing — Open Innovation Challenge’, ‘Smart and Sustainable Built Environment’, and ‘Sustainable Solutions in Recycling and Waste-To-Worth’. 

Moving on, Day 2 will look at sustainability in food and nutrition. The day will begin with two keynote sessions on the future of food, ‘What Will Be the Future of Food’ and ‘Digging Deep to Meet Our Future Food Needs’. After that, attendees can look forward to sessions like ‘Design Think Tank’, ‘Trash to Treasure — Upcycling Food Side Streams’, and ‘Innovations in Sustainable and Intensive Urban Farming’.

Also read: Want to strengthen your communities? Facebook and e27 are here to help

A key highlight for the second day is IPHatch 2021, a programme challenge that matches technologies from MNCs with startups to give them a boost to accelerate their business. IPHatch empowers startups with deep tech in IoT, sustainable food production and agritech to bring about the social and economic impact in this sector.

Finally, Day 3 features a host of events surrounding the theme of healthcare, which is more important than ever with Covid-19. Like previous days, it will begin with two keynote sessions, ‘Healthcare Innovations in the New Norm’ and ‘Reimagining Health & Wellness Solutions Post-Pandemic’. The event will close off with two thematic sessions, ‘Non-invasive Diagnostics in Healthcare’ and ‘Evidence-based Traditional Herbal Medicine’.

IPI’s key partners will also be showcasing their technologies during TechInnovation 2021. These include organisations such as German Entrepreneurship Asia, Innovate UK, Japan Science and Technology Agency, and many more.

Creating opportunities, catalysing innovation

IPI is a subsidiary of Enterprise Singapore, a government agency geared at helping businesses develop and transform. Established in 2011, IPI provides companies with access to its global innovation ecosystem and has been bringing TechInnovation to the world for 10 years. 

Companies can tap on IPI’s multidisciplinary expertise and international network. On top of industry events like TechInnovation, IPI also facilitates companies’ innovation processes, such as by advising and supporting their commercialisation and go-to-market strategies. This accelerated innovation benefits enterprises, technology partners, and government agencies alike.

This year marks IPI’s tenth anniversary. Since its launch, IPI has engaged with enterprises via a variety of initiatives such as Open Innovation Services, Innovation Advisors Programme, Innovation Marketplace, and many more, helping them embark on their business transformation journeys.

Also read: 32 startups raise US$108M in 9Unicorns-VCats maiden Global Demo Day

For example, food commodities supplier Par International Holdings, for example, decided to participate in the Innovation Advisors Programme in order to tap into new expertise and technologies, like alternative proteins, and expand their business portfolio.

Hence, IPI linked them up with innovation advisor Dr Rebecca Lian, who advised Par International Holdings on how to upcycle spent grains into high-protein and high-fibre products. With Dr Lian’s expertise, the company has already conducted initial trials for the repurposing of spent grains with their food manufacturing partner. 

“This year, IPI celebrates a decade of impact, catalysing innovation for enterprises and partners across a wide spectrum of industries and covering different technical domains since its setup in 2011,” said Wong.

The tenth-year mark of IPI’s presence is crucial, as it signals the importance of constant innovation. By providing end-to-end support for enterprises and helping them grow beyond their boundaries, IPI’s role in helping enterprises innovate and boosting the industry ecosystem is an undeniably significant one.

For more information on TechInnovation and IPI’s other projects, visit https://www.ipi-singapore.org/.

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

We can share your story at e27, too. Engage the Southeast Asian tech ecosystem by bringing your story to the world. Visit us at e27.co/advertise to get started.

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Zipmex, a Singapore-headquartered digital assets exchange, has secured a US$41 million Series B round from a clutch of corporate investors and VCs.

Bank of Ayudhya’s corporate VC arm Krungsri Finnovate, leading Thai media giants Plan B Media and Master Ad (MACO), besides new and existing VCs, including MindWorks Capital and Jump Capital, participated.

With this, Zipmex’s total funding raised to date has touched US$52 million.

This deal marks Bank of Ayudhya’s — part of the Mitsubishi UFJ Financial Group — maiden investment in a digital asset platform in Southeast Asia.

Zipmex will use the new capital for product offerings and scaling its technology team to roll out new digital assets products in lending, payments and securities. 

The digital assets exchange will also deploy a new marketing campaign throughout the out-of-home media network of Plan B Media and MACO. This aims to foster the possibilities of access for all to the power of digital payments.

Also read: Pintu adds US$35M to its Series A kitty, aims to build Indonesia’s largest crypto exchange

As per a press statement, the company also plans to launch Zipmex Card, a Visa-backed payment card, and ZLaunch, a platform that gives users early access to new investment tokens.

Founded in 2018 by Marcus Lim and Akalarp Yimwilai, Zipmex offers educational features for new investors and serves high-net-worth individuals through two earning accounts (one flexible and one fixed-term), underpinned by its native ZMT token.

The company also provides digital asset payment solutions to businesses and claims to have facilitated several regional-firsts in luxury vehicles, art, and property transactions.

Recently, Zipmex announced a partnership with Major Cineplex Group, the largest operator of movie theatres in Thailand, and digital payment startup RapidZ, to allow some moviegoers to buy tickets with cryptocurrencies like Bitcoin.

Zipmex CEO Marcus Lim said: “A marriage of digital assets and traditional banking can provide new innovative use cases for money, which we have demonstrated through ZipWorld. Further, the use cases of Zlaunch and ZipNFT are just the starting point of where we can evolve to be banking forward, lifestyle-focused.”

Zipmex claims to have bagged one million clients and processed more than US$4 billion in gross transaction volume to date.

The global exchange is also slated to be licensed in Thailand while operating under regulatory supervision in Indonesia and Australia. 

In Singapore, Zipmex, through its subsidiary, is currently in the advanced stages of applying for a Major Payment Institution licence application with the Monetary Authority of Singapore (MAS) for digital payment token services.

 

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Image credit: Zipmex

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Intudo Ventures, an “Indonesia-only” VC firm, today announced the final close of its oversubscribed US$115-million third fund.

Intudo Ventures Fund III will invest in homegrown companies capitalising on the rapid growth of private consumption and rising middle-class.

The fund attracted commitments from institutions, funds, and family offices, spanning the US, Europe, and Asia. Notable Limited Partners include Black Kite Capital, the family office of Koh Boon Hwee; Wasson Enterprises, the family office of former Walgreens CEO Gregory Wasson; PIDC, the investment arm of Taiwanese international F&B and retail conglomerate Uni-President Enterprises.

In addition, over 20 leading global funds and managing partners, including seven international Midas List investors, over ten tech unicorn founders, and 30 of the most prolific families and their associated conglomerates in the archipelago, also invested.

Also Read: Yummy Corp secures US$ 7.75M in Series A from SMDV, Intudo, others

Intudo is investing in industries poised to define the future of Indonesia, driven by the dual economic engines of private consumption and digitisation.

The oversubscribed fund brings Intudo’s total assets under management to approximately US$200 million.

The firm will commit initial check sizes ranging from US$1 million to US$10 million.

The third fund will seek opportunities in agriculture, B2B & enterprise, education, finance & insurance, healthcare, logistics, and new retail & entertainment, constructing a concentrated portfolio of 12-14 homegrown companies.

Launched in June 2017, Intudo works both hyper-locally and globally with a physical presence in Indonesia and Silicon Valley. It works closely with global investors through its Indonesia Beachhead Strategy as an in-country partner for Indonesia exposure, providing access, risk mitigation, and 24/7 on-call first responder support.

Also Read: Intudo Ventures closes US$50M “Indonesia-only” second fund

The firm is active in the US through Intudo’s Pulkam S.E.A. Turtle Fellowship, closely mentoring aspiring Indonesian founders, sponsoring and hosting major university and industry events. The events include the annual Harvard Asia Business Conference, MIT Asia Business Conference, Southeast Asia MBA Weekend, weekly discussions with Indonesian professional and student associations, and visits with Indonesians at top tech companies in Silicon Valley.

“What was once a ‘nice-to-have in-country investors have become essential for Indonesian companies to thrive, providing hyper-local support and deliverables. Acting as an in-country shepherd, Intudo supports our founders through a blend of hyper-local and global best practices, allowing us to create more favourable outcomes for our founders consistently,” said Patrick Yip, Founding Partner at Intudo Ventures. “Witnessing the resilience and growth of our founders, we are more bullish on Indonesia than ever before and are excited to work with the next generation of Indonesian entrepreneurs.”

In February 2019, Intudo closed a US$50 million fund, following its debut fund of US$20 million announced a year earlier. So far, it has backed a number of startups. Prominent among them are  Xendit, Halodoc, TaniHub Group, Pintu, Kargo, PasarPolis, BeliMobilGue, and Yummy Corp.

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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

 

The post How a few up and coming virtual kitchens revitalise the pandemic-hit F&B industry in Malaysia appeared first on e27.

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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Image Credit: ximagination

The post Will Indonesia’s startup economy lose its ‘emerging’ title in 2021? appeared first on e27.

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
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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.