Jenfi, a Singapore-based alternative revenue-based financing company for digital-native businesses and startups in Southeast Asia, has raised US$6.3 million in a Series A funding round led by Monk’s Hill Ventures.

Korea Investment Partners, Golden Equator Capital, 8VC, ICU Ventures, and Taurus Venture joined the round.

As per a press statement, the startup will use the fresh capital for product development, customer acquisition, and market expansion in Southeast Asia.

Previously, the Y Combinator graduate bagged US$25 million in a debt round led by San Francisco-based early-stage credit fund Arc Labs, with the participation of Gluwa, the co-creators of CreditCoin. It also counts Atlas Ventures, Next Billion Ventures, Stormbreaker Ventures, VentureSouq Capital, and Iterative among its existing investors.

Jenfi was started by Jeffrey Liu and Justin Louie, co-founders of fitness subscription company GuavaPass which was acquired by ClassPass in 2019. The startup provides flexible funding options for companies looking to scale their businesses through increased marketing, inventory, and growth campaigns.

Also Read: How revenue-based financing will help unbanked and underbanked businesses flourish

Unlike traditional lenders that focus on a company’s financial statements, Jenfi monitors and underwrites businesses through a qualification process with alternative data sources. These sources include the likes of accounting software (e.g. Xero, Quickbooks), payment gateways (e.g. Stripe, Braintree), merchant platforms (e.g. Shopify, Shopee, Lazada), and digital advertising (Facebook and Google Ads).

Indicators such as the creditworthiness of a business, the efficiency of growth spending, the health of the companies, real-time data on revenue growth, and marketing ROI are all considered.

Business owners and entrepreneurs can avail up to US$500,000 of non-dilutive growth capital in return for a small percentage of future revenue instead of a fixed repayment schedule.

The company claims that it has backed over 100 businesses, including B2B and SaaS businesses such as Tier One Entertainment, Pay With Split, and Homebase.

The company boasts that its average customer achieves a significant amount of compounded sales growth, ranging from above 26.5 per cent over three months to more than 156 per cent over 12 months.

By July 2022, Jenfi plans to deploy US$15 million in non-dilutive capital.

“Online merchants and digital-enabled businesses are burgeoning, and these same businesses are taking advantage of the exponential growth of e-commerce and digital marketing. It’s time for lenders to evolve,” said CEO Liu. “We built Jenfi with the vision to help these businesses grow and to partner with owners for the long-term without them giving up any equity.”

Susli Lie, venture partner at Monk’s Hill Ventures, said in a statement that Jenfi is blazing a path for how digital-first companies do the financing.

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Image Credit: Jenfi

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In the startup world, one record announcement chases the next. In the first quarter of this year, global venture funding exceeded US$100 billion for the first time in history, according to Crunchbase.

This massive increase in funding led to two new unicorn startups–  per working day, on average. This is well above anything we have seen in previous years– for comparison: roughly one new unicorn was announced every two working days in the whole of 2020.

These announcements fuel the media with exciting stories and raise public awareness for this unique opportunity as an entrepreneur. It shouldn’t come as a surprise that an increasing number of people across various professional and educational backgrounds is considering starting their own business– regardless of whether they are driven by the desire to build something from scratch, to achieve financial independence, to turn a life-long passion into a commercial product, or to become their own boss.

Having already gone through the journey of being a first-time founder and learned valuable lessons, serial founders are one of the most sought after groups of individuals for investors.

After partnering with several fascinating serial founders through our work at Picus Capital, we are now excited to share lessons from founders about starting and building ventures from scratch, what keeps them motivated, what they learned throughout their careers as founders and early employees at different ventures, and what advice they have for future entrepreneurs.

We spoke to Sebastian Schuon, who founded Stylight and Alasco; Carsten Lebtig, who founded Sanubi and Workmotion; and Guilherme Pinho Bonifacio and Diego Libanio, who founded Mercê Do Bairro together after having founded ifood.com and Zé Delivery, respectively.

Also Read: In brief: ADPList bags US$1.3M funding, Sunway iLabs unveils 5 startups joining its accelerator

As founders, focus on finding the right hires instead of compromising

“I learned that it is easier to find people with the right culture and vision that can learn the necessary technical skills than the other way around”  – Diego, Co-Founder of Mercê do Bairro

Once you finalise the ideation process and officially found your company, you will most likely want to expand your team in order to accelerate your venture’s development and traction. Your early key hires have a crucial impact on the long-term culture and success of your company, so you should not just hire anybody.

You should keep in mind, for instance, how they can influence your ability to attract more employees and grow the organisation. Also, these first employees will be key factors in determining the company’s culture and values.

So, take the time you need to look for the right people and find individuals who are fully aligned with your long-term vision.

And be aware: As a founder, you then automatically become responsible for these individuals who put their trust, time, and effort into your vision and your ability to convince them that their ambitions and vision are achievable as well.

Partnering with the wrong people – especially in the early days – might jeopardise your progress. But even if you pay a lot of attention to your hiring process, every now and then you will realise that certain colleagues you hoped would take your company to the next level, might end up failing to meet your expectations.

In this case, don’t waste too much time and find a solution, even if the conversation is not very comfortable for either of you. Because more often than not, managing the performance of your employees can be crucial to securing the long-term success of your organisation.

Validate your idea with experts and customers and accept that they know it better

“Don’t spend too much time writing business plans or creating Excel models. Instead, go to the front and talk to potential customers very early on. Young founders do that far too late.” – Carsten Lebtig, Co-Founder of Workmotion

We have repeatedly spoken to founders who have spent weeks and months behind closed doors trying to build a product they considered a perfect solution for a potential problem.

More often than not, this approach leads to teams spending valuable time developing a solution that looks great on paper but misses a client’s true pain points.

Having invested in more than 70 companies across different stages and industries, we have seen that the most successful entrepreneurs are, above all, pragmatic, somewhat opportunistic, and customer-centric.

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

Based on our discussions with founders who have been through various business model ideations and product validations, we want to emphasise that you as a founder should push yourself out of your comfort zone and into direct interactions with customers, competitors, and industry experts – starting on day one of the venture building journeys.

This is the most efficient and insightful feedback that venture teams can leverage to build a product or service that meets real customer demands and gets early adopters excited about what is to come. Taking advantage of other people’s input in your own product development journey also involves admitting to your own misjudgment; however, making mistakes is part of any venture journey.

What really matters is your ability to derive the respective consequences from these mistakes and to turn them into action. Put your emotions aside. Eventually, this will allow you to save both time and money – two of your most valuable resources as a founder in the early stages of your venture journey.

This is not only true for product development but also applies to defining and shaping the entire business model. In fact, the founders that we spoke to looked at a variety of different business models, before eventually settling on the most promising opportunity.

Personal development is essential to becoming great founders

“Leadership skills are not innate– they are developed over time” – Sebastian Schuon, Co-Founder of Alasco.

When you are running your own business, you have to be willing to invest in your own development. As an entrepreneur, you are, above all else, a leader.

No matter how passionate you are about your product vision or your ability to connect with potential customers, as a founder, you will soon realise that entrepreneurship is about managing, guiding, leading, and mentoring others.

Based on our interactions with individuals and teams that have built various successful and large organisations throughout their careers, we learned that a company’s long-term growth potential is largely limited by one’s own ability to learn and develop as a person and adapt as a leader.

As your company matures, your customer relationships become more complex and your product evolves, and so do the expectations towards you as the founder and the responsibilities you face.

Regardless of whether you are stuck in validating your idea, transforming your business model, or scaling your company– your team, customers, and investors put their trust in you to steer the company through a variety of challenges. Being able to adapt to these different circumstances is crucial.

Establishing and leveraging a network of advisors, angels, and investors

“Network and reputation are priceless. I always try to connect people in my network with one another. I enjoy observing how this creates value for others and more often than not, something comes back in return eventually – even if you don’t expect it.” – Guilherme, Co-Founder of Mercê do Bairro.

As an entrepreneur, you are constantly required to evaluate options and make decisions that will not only impact your own success and fortune but also that of others who are willing to commit to the company’s journey. More often than not, these decisions are unique and the right answers are rarely easy to find.

Building and maintaining a strong personal and venture network is therefore enormously helpful, especially for first-time founders. Building up a peer group of like-minded individuals allows entrepreneurs to exchange ideas.

Also Read: GuavaPass co-founders’ new alternative lending startup Jenfi lands US$6.3M led by Monk’s Hill

Ideally, such a peer group consists of founders who are in a similar phase of the company as well as those who have already successfully overcome certain challenges and are willing to share their experiences.

In addition, partnering and seeking support from relevant and experienced business angels, as well as early-stage investors who want to contribute strategic and operational advice, can significantly accelerate a venture’s success.

Nevertheless, it’s important to keep in mind that successful networking is a long-term game and comes about through give and take. Don’t forget about the people who helped you out at some point in your journey when they ask for a favour.

 Being a founder is neither easy nor predictable. The decision to become a founder has implications on your whole life and can be challenging but also rewarding, both in terms of personal development and professional success. Or, as Sebastian Schuon put it: “The literal meaning of “entrepreneur” is someone who undertakes something. True entrepreneurs are restless and want to create something. If it’s all about the money, you’re better off going into investment banking.”

This article was co-written by Daniel Niklas, Vice President at Picus Capital.

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RaRa Delivery, a startup providing instant delivery service for e-commerce in Indonesia, has secured US$3.25 million in funding co-led by Sequoia India’s Surge and East Ventures.

The startup was founded in Singapore in July 2019 by Karan Bhardwaj, a graduate of Nanyang Technological University, Singapore. It is a last-mile logistics company aiming to “revolutionise one to three-hour deliveries” for e-commerce through its data-driven approach and proprietary technology.

While other companies with express logistics infrastructure focus on one-to-one deliveries, RaRa Delivery has developed real-time batching technology to do ‘many-to-many’ deliveries within a few hours.

As a result, it has been able to bring down the eventual delivery cost for customers while enabling drivers to earn more money in fewer hours. According to the firm, it has been able to carry out three-hour deliveries for up to 20 per cent lesser cost due to the efficiencies of batching technology.

Also Read: RaRa Delivery raises over US$800K funding

Besides quick deliveries, RaRa Delivery’s platform offers real-time notifications and status updates. In addition, customers can chat with service agents and drivers, all through a single chat platform.

The firm has also integrated its services into all major online marketplaces in Southeast Asia to allow any seller to offer instant and same-day deliveries to their customers.

In the back-end, RaRa receives orders from businesses and merchants via API integrations, calculates capacity, timeslots, distance and route optimisation to slot these orders into batches and maximise productivity to reduce the cost per order.

RaRa Delivery has ramped up its offering given the rising demand for instant groceries and medical supply delivery services in response to the global pandemic. In addition, it has provided essential one to three-hour delivery windows required for food and medical supplies during the ongoing COVID-19 crisis.

The startup counts grocery players such as Sayurbox, Blibli, Kopi Kenangan, Grab Merchant, and Alodokter.

“While the express delivery space has been flourishing in sectors such as groceries and healthcare, we saw an opportunity to scale this offering across all categories, as customer expectations grow alongside the maturity of e-commerce in Indonesia,” said founder and CEO Karan Bhardwaj.

In Indonesia, consumer appetite for fast convenience has risen, and consumers are willing to pay a premium for quick deliveries. As a result, the market size for same-day delivery is expected to grow to 30 per cent, totalling 4.5 million parcels a day by 2023. The premium logistics charges for same-day delivery services are projected to increase to IDR 65 trillion (US$4.5 billion) in 2023, up from IDR 4.4 trillion (US$556 million) in 2018, thereby outpacing the growth in other delivery services1.

A part of Surge’s fifth cohort of 23 companies, RaRa also counts Royston Tay and Yang Bin Kwok among its investors. In April 2020, RaRa Delivery secured US$834,000 in a seed funding round, led by 500 Startups.

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Image Credit: RaRa Delivery

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Wisesight, a social media analytics solutions startup in Thailand, has secured more than US$7 million in a Series B financing round co-led by Thai bank Krungsri’s VC arm Krungsri Finnovate and Japanese IT solutions giant TechMatrix.

As per the statement (in Thai) on the company’s website, after this round, TechMatrix will become one of the largest shareholders of Wisesight, along with Krungsri Finnovate and existing investor Nvest Venture. 

The fresh capital will be used to enhance the business potential of Wisesight and fuel its sustainable business growth. 

“We believe that the synergies of strong partners will be a good foundation for Wisesight to grow sustainably as a tech startup,” said Kla Tangsuwan, CEO of Wisesight. “We will continue to innovate to serve our clients better. This year, in addition to maintaining our leadership position in social data analytics, we expanded our analysis to a broader and deeper level.”

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

Founded in 2010 by Warodom Dansuwandumrong and Pnern Asavavipas, Wisesight provides a set of solutions for brands and agencies to analyse and synthesise social media’s raw data into meaningful insights across various industries. Its services include social media listening and analytics, real-time social monitoring, and research and consulting.

With its ability to process the data via social media for more than 20 million messages a day in Thai, English, Burmese and Malay, Wisesight claims that it has served more than 300 brands and agencies and has a team of 200 developers, researchers, operators and supporters based in Bangkok.

Under this collaboration, Wisesight will capitalise on Krungsri’s strength to expand the business and develop cooperation projects. At the same time, Wisesight will leverage Krungsri’s competitiveness in the domestic and overseas markets by enhancing its customer experience through data analytics.

Meanwhile, Wisesight’s Warroom (a one-stop service to manage customer engagement across social media) and TechMatrix’s FastSeries (a cloud-based CRM system) will be combined to provide a complete solution for all businesses’ needs and enter the ASEAN region.

“This investment will support the expansion of cooperation between each other in the future. It is also an opportunity to help Krungsri’s business customers who are selling products through online channels to have the opportunity to access tools that increase their business efficiency,” said Sam Tansakul, managing director at Krungsri Finnovate. 

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Image Credit: Wisesight

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Recruitment teams around the world are always figuring out ways to meet aggressive hiring goals with short timelines as well as uncertain budgets. 

Never before has this been more true than in the last 18 months – one of the most turbulent periods in the history of the global labour market. Employers around the world were forced to lay off or furlough workers in large numbers in reaction to the economic impact of the COVID-19 pandemic – most of them downsized their recruitment efforts.

Now, jobs have opened up at record levels and we’re seeing a severe shortage in the supply of candidates in the market. These shifts and challenges are unprecedented. 

Traditionally, recruitment teams manually advertised their jobs on sites such as Indeed, LinkedIn, Jobstreet, Beam, Naukri, Monster and many more, to source their candidates. Ongoing decisions on where to post the ads, how much to spend on each source, and how to optimise the performance of the ads were based on intuition.

Such an approach is resource-intensive, time-consuming, inefficient, error-prone, and lacks the data-driven rigour required to consistently attract high-quality candidates quickly and cost-effectively.

In addition, many of the most popular online talent sources in Asia are pay-per-post job sites, which means talent acquisition teams need to pay for their job ads to be displayed for a certain period of time only to hope that they would deliver relevant candidates. In a market as volatile as today’s, committing to invest in “post and pray” ad inventory that may yield little return is not prudent.

The only way they can be effective is by using technology that leverages data and automation to optimise the performance of their campaigns in alignment with the market dynamics. 

Programmatic job advertising technology does just that. 

Also Read: Owning your data is a basic human right, says blockchain-based startup Credify’s Rasmus Kütt

What is programmatic job advertising?

It is a data-driven way of buying and optimising job ads automatically across the most optimal talent sources, the ones most likely to deliver hires.

A programmatic approach enables recruitment teams to attract the most relevant candidates at the right time and cost.

The technology does it all on simply clicking a button. If you’re a recruitment marketer, all you need to do is select your jobs, input your goals (hires or applies), and let the machine drive your talent sourcing.

Using automation and machine learning, the technology drives continuous optimisations in the performance and cost of job ads. These optimisations are enabled by tracking the performance of recruitment advertising campaigns across all online sources, along the candidate journey– right from when job seekers click on an ad to when they get hired.

This data is then utilised to ensure that the ads are automatically placed on job sites or talent sources where they would have the most success within the available budget. 

The best part? As the market forces evolve, the ad campaigns will automatically be optimised in response to the latest dynamics.

Adoption levels vary across the globe– is Asia ready?

The adoption of programmatic job advertising technology has been rising consistently in North America, where the job site ecosystem is relatively fragmented and pay-for-performance models in recruitment advertising are quite prevalent.

This uniquely positions programmatic job advertising solutions to deliver significant value and ROI, as the technology can automate the placement of job ads across the best performing talent sources while saving recruiters valuable time to focus on other essential activities like candidate engagement. 

In contrast, employers in Asia (along with those in other regions like Europe and the Middle East) are still in the nascent stages of adopting this technology. In these markets, recruitment teams are still attuned to working with job sites on a pay-per-post model and the transition to pay-for-performance has been sluggish.

However, this is quickly changing. A number of employers are moving to an outcome-driven, pay-for-performance approach using technology. For example, Indian IT giants like TCS, HCL Technologies, Wipro, and Hinduja Global Solutions (HGS) have adopted programmatic job advertising technology to power their global talent sourcing efforts at scale. 

Employers from other industries that recruit in high volumes, such as BPO and Gig businesses, also have a huge opportunity to leverage this technology to boost the quality and speed of their recruitment efforts.

Ultimately, recruitment teams care about three things: meeting their hiring goals, increasing the speed-to-hire consistently, and achieving a predictable cost-per-hire (or cost per applicant, as the case may be). 

Programmatic job advertising uses data, automation, and machine learning to deliver all of these and more – such as, end-to-end visibility across the candidate journey and predictability of outcomes.

Also Read: Scaling is hard: Here are 7 things Human Resources can do to manage it

The unique demands placed on businesses during the last 18 tumultuous months have accelerated their adoption of technology by several years. This is true for data-driven recruitment technology as well.

So it’s only a matter of time before recruitment teams across Asia go “all in” on programmatic!

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“When I started MetaLab in 2006, the idea of handing anything off seemed insane,” says Andrew Wilkinson, the Founder and CEO of the Canada-based digital product agency on his Medium blog. Today, MetaLab’s clients include Uber, Slack, Amazon, Apple, Google, Mozilla, TripAdvisor, Tumblr, and Walt Disney. But the success did not come easy for them.

In 2009, when it was still a small but profitable agency, Wilkinson recognised that his “biggest problem at the time was managing people. I was up to about 10 employees and I was having trouble keeping track of what everyone was working on.”

They started developing the project management service Flow and launched the beta version nine months later. It was to scratch an itch. “We were frustrated with having to use three different apps to manage our daily workflow, so we decided to build a solution ourselves,” says Wilkinson.

“We broke all the rules. We didn’t raise money, worked short days, and even did client work on the side. And yet just three weeks after launching, Flow was turning a profit. One year later, we’re bringing in over US$500,000 in recurring revenue and growing like crazy,” says Wilkinson.

He borrowed an idea from Basecamp, building software for themselves and then selling monthly access to it.

From day one, it was a huge hit. A lot of people had the same problem and there was nothing else like it. Wilkinson was “in love” with this business model.

When Flow added subscriptions, the service reached US$20,000 in revenue in its first month, growing 10 per cent on a monthly basis. Flow offered a 14-day free trial followed by a subscription for US$10 per month or US$99 per year.

“There was just one problem: I was consistently spending two to three times our monthly revenue and losing money. And not venture capital. Out of my personal bank account,” Wilkinson writes. He constantly reassured the CFO and considered him shortsighted; Wilkinson believed that the service would bring “Millions! Maybe billions!” so more investment was needed in it.

First appearance of Asana on the market

TechCrunch wrote in 2011 about Flow. “If you’re looking for an alternative to GTD lists, Outlook, or Basecamp, it’s certainly worth checking out.” But they also recognised that the service will also be competing with Asana, the site founded by Facebook co-founder Dustin Moskovitz who has been Mark Zuckerberg’s college roommate.

Founders of Asana Dustin Moskovitz and Justin Rosenstein (who left Google in 2007) met while leading Engineering teams at Facebook. They left the company in 2008, to start a company whose product would allow teams to work together more successfully, eliminating much of the “work about work”.

Also Read: Today’s top tech news: Asana plans for direct listing, Fleetx raises US$2.8M in Series A

Wilkinson notes that the name Asana “started popping up quietly at first, then a lot”. However, when the service launched, Wilkinson breathed a sigh of relief: “It was ugly! It was designed by engineers. Complicated and hard to use. Not a threat in the slightest.”

Around the same time, Moskowitz invited Wilkinson for coffee in San Francisco.

“He walked me through who was backing them, how much cash they had, how they had hired top executives from huge companies, and that it was only a matter of time until they beat us on product and outspend us on marketing,” Wilkinson says. “He implied — in the nicest possible terms — that they were going to crush us. I laughed! ‘Nice try!’ and told him ‘let the games begin’,” writes Wilkinson.

A fart in the wind

Wilkinson believed that they had built what he felt was a superior product: the service continued to grow rapidly, users demanded a version for all platforms — iPhone, Android, iPad, Mac.

Asana quickly released clients for all platforms — it had five times as many developers as Flow, Wilkinson writes. “Suddenly it was a key feature when people compared Asana and Flow side-by-side. Mobile was table stakes,” he adds.

The entrepreneur continued to invest until they ran out: the company began to delay missing payroll and rent. Wilkinson writes that one day his business partner Chris Sparling even had to inject cash from his personal account so they wouldn’t miss payroll. By that time, he had already spent “millions of dollars.”

Asana then raised US$28 million in investment and started investing in marketing, while Flow viewed paid marketing as “douchey and aggressive” and focused on organic growth.

In an attempt to regain the market share, Flow started spending on advertising but mostly continued to focus on “making the product better than theirs”. This was the only remaining benefit of the service, but the product also began to suffer: the company did not have the money to hire more developers.

With a team that is a quarter of the size and a fraction of the money, service growth began to slow down as the company received an “endless stream of bug reports.” Meanwhile, Asana continued to hire a “huge team of incredible designers”. Flow’s team felt frustrated and under-resourced and they churned through staff.

Also Read: This project management tool from Cambodia wants to give Trello, Asana a run for their money

“One day I woke up to see that Asana had fully relaunched. Their marketing site looked … great. Better than ours … Their new app, while not perfect, had all the features we wished we had time to make, worked on more platforms, and most importantly, was fast and not buggy.”

“Even our own keywords on Google were crammed with “Asana vs. Flow” paid links. By this point, they were burning over US$150,000 per month,” says Wilkinson. “It was like Fiji waging war on the US with a collection of AK-47s and speed boats vs. artillery and aircraft carriers.”

The writing is on the wall

Then Flow decided that they didn’t need to “own that market”. They could just have a small slice of pie. They focused on base hits. For a while, that looked like an OK strategy. The revenue growth slowed, but still kept on growing.

Until one day it didn’t.

“Churn caught up with us, customer acquisition cost became unprofitable, bugs continued to dominate our time, and Asana and others kept making their product better,” Wilkinson says. “Twelve years and over US$10 million lit on fire, we are done burning money in a losing battle. We give up.
The writing is on the wall. Dustin was right.”

The company downsized and relocated the team to India to break even and support the remaining customers. At the peak of its business, Flow received about US$3 million in annual revenue, and now the average is US$900,000 per year.

Flow “lost” due to inexperience, grocery “myopia” and lack of capital, concludes Wilkinson.

Also Read: wagely bags US$5.6M to give Indonesia’s low-paid workers access to their earned wages

Wilkinson highlighted the key lessons

• If you are in a competitive VC-funded space, it’s foolish to compete without raising money. Don’t bring a knife to a gunfight.
• The best product doesn’t always win, and the product is not a long-term competitive advantage.
• If a tree falls in the forest and nobody is around to hear it, it didn’t fall.
• Every developer in the world wakes up thinking “I should build a to-do list app” and people love jumping between productivity apps and workflows. There is no moat in productivity — avoid it if you can.
• Running a SaaS business without deeply understanding churn, LTV, CAC, etc, is like flying a plane without instrumentation — really stupid and dangerous.

• Failure sneaks up on you slowly, then all at once.
• R&D is expensive. Especially when competing with venture.
• If you’re competing on features, it never stops and is an ever-increasing line item.
• Good product with great marketing beats amazing product with no marketing.
• Bootstrapping works best in uncompetitive spaces/niches, or if you have an unfair advantage (a personal brand, unique customer acquisition channel, etc).

Dustin Moskowitz responded to Wilkinson’s thread: in his version of the story, he “did consider @awilkinson and team’s product to be a very high quality player in the space and respected the hell out of them”.

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Ransomware attacks are on the rise worldwide, with the Asia-Pacific region alone experiencing a 168 per cent increase in 2021 compared to the previous year, according to Check Point Research.

Not only are ransomware attacks becoming more common, but they are targeting organisations across all sectors and sizes, especially Small-Medium Enterprises (SMEs) and startups.

With the average ransom demand now reaching up to US$180,000, hackers are always on the lookout for digital “open doors” into company systems. As such, it is crucial for organisations of all sizes to be aware of the cyber risks they face and build resilience.

The anatomy of a ransomware attack

Much like criminals in the physical world, cybercriminals are most effective when three key elements merge together: Motivation, resources, and opportunity.

The motivation behind ransomware attacks is primarily economic, as companies are often willing to pay millions of dollars to the attackers in order to have their files unlocked, systems restored, and business operations resumed smoothly.

As cybercriminals continuously upgrade their malware and their strategies become increasingly sophisticated, attackers are developing resources to conduct cyber-attacks of enormous magnitude and impact.

The WFH policy introduced during the COVID-19 pandemic has also exposed organisational cyber vulnerabilities, given that employees often use personal devices connected to home or shared networks which are far less secure than organisational ones.

Combined with bad cyber hygiene and a lack of general awareness of cyber best practices, organisations are at risk of a cyber breach now more than ever.

A matter of seconds

Last year, the number of ransomware reports Singapore’s Cyber Security Agency (CSA) received almost doubled. The increase can be linked to the emergence of ‘Ransomware-as-a-Service’ (RaaS), a business model which leases ransomware variants to their clients in exchange for a percentage of the ransom paid by the victim.

This way, people with little to no technical knowledge are able to launch sophisticated ransomware attacks on organisations.

Once it has penetrated a system, ransomware acts rapidly and can encrypt important files on every single device on the network. This can happen within hours, minutes, or even seconds, depending on the number of targets in the attack and whether the attacker has spent time silently monitoring and exfiltrating data prior to encryption.

Most importantly, time is of the essence. A few seconds can make the difference between securing valuable information or bearing the risk of losing data while having to pay out a much bigger ransom.

The length of time a cyber attacker has free reign in an environment from the time they get in until they are eradicated– is known as its dwell time.

Also read: The WannaCry ransomware attack is wreaking havoc across the world, here are 14 steps to protect your company

The longer attackers have access to a network, the more opportunities they have to collect vital data and cause disruptions across the company’s digital systems.

On a global level, the average cyber dwell time in 2020 was 56 days. However, Asian companies are performing much worse than their US and EU counterparts when dealing with cyber-attacks.

In Hong Kong and Singapore attackers are often able to operate undetected for much longer, with most cyber-attacks dwelling in systems between 90 and 180 days respectively, while others have lasted years.

Reducing dwell time through compromise assessments

With some of the highest dwell times worldwide, Asian companies can and should take steps to improve their proactive defence and address cyber threats on the front foot.

Organisations can start by keeping systems and patches up to date to ensure the attacker has fewer opportunities to leverage vulnerabilities in your computing environment. To augment this, deploying Endpoint Detection and Response (EDR) products and employing a professional incident response and digital response firm to conduct frequent and recurring Compromise Assessments ensures early detection of a cyber-attack and increases the chances of disruption.

A Compromise Assessment, or “CA”, answers the fundamental question: “have I already been breached?”, and can provide a measure of comfort for companies in knowing that they have a high degree of certainty of their safe status. SMEs should minimally conduct a CA once a quarter.

The CA provides a two-fold benefit. On the one hand, it  can detect the early stages of an attack by hackers who enter a network through a phishing link, circumventing the cyber defences in place since an employee was tricked into letting them in. These hackers are using the combined power of human intuition and qualitative thinking alongside the quantitative horsepower of computing.

As a result, deploying a digital solution alone is woefully inadequate against the combination of this human-computer one-two punch as it is logically only half of what the adversary is leveraging. In light of this, CAs deploy high-level cybersecurity specialists with various technological solutions and approaches to eliminate the unfair advantage enjoyed by hackers.

On the other hand, a CA can also catch active intrusions that various anti-virus and EDR solutions are unable to detect. If that is the case, the specialists transition immediately to quarantining, killing, and remediating the situation, logically resulting in less financial damage than discovering the attack once it is fully executed by the criminals.

Thus, one can easily see the importance of a recurring CA to disrupt attackers in this situation as it is akin to having security guards patrol the building on the hour versus purely relying on CCTV to detect everything on its own.

Finally, having a clear incident response plan, including a good cyber insurance policy which offers expert digital forensics and incident response (DFIR) services and management support in the event of a cyber-attack, enables teams to react in a controlled and proven manner, saving precious time and resources following an attack.

Ransomware: Everyone is at risk

The biggest misconception that exposes SMEs to cyber-attacks is the sense of “security through obscurity”.  Startups and SMEs tend to believe that they will never be targeted by cyber-attacks because they are not important enough.

This concept is no longer valid, as hackers are now looking to target the most vulnerable companies rather than the biggest ones.

Paired with the advent of RaaS numerous low-skilled “hackers” are now probing and attempting to deploy downloaded ransomware scripts to any company with an open port that they scan, which are often SMEs who have little to no investment in their cybersecurity.

This means that today 43 per cent of all cyber-attacks are against SMEs which lack structural preparedness and organisational cyber security awareness, but also the financial resilience needed to survive an attack.

Therefore, preparation is key to survival via proactive defensive measures CAs, as well as securing the human element via the education of employees on cyber best practices while ensuring that all systems are appropriately patched and protected.

Additionally, having a well-rehearsed incident response plan and playbook allows for immediate response in the event of a breach, which is most cost-efficiently handled via a comprehensive cyber insurance policy.

In the ever-changing world of ransomware attacks and cyber threats, startups and SMEs should not brush off investing in their cyber defenses simply because they are smaller or less visible in the same way that they would never leave their office unlocked, unsecured, and unchecked.

Proactively defend vital systems, diligently patch company software tools, and have a plan in place in the virtually inevitable event of a breach.

These methods will help organisations put their best foot forward when addressing cyber threats.

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It is common knowledge that investment is part of the startup building process. There are many avenues for startups to raise funds, such as old-school methods (angels, VC, and corporate VC rounds), crowdfunding, and initial exchange offerings (IEOs). But convincing investors and raising money is a tedious process. Worse, maintaining and balancing relations with different investors is even more challenging.

Like many of its peers, Sky Mavis, a Vietnam- and Singapore-headquartered startup, also went through different financing rounds to raise US$9 million. These developments hit the headlines for Sky Mavis’s association with some globally renowned VCs, individuals and corporates. They included Libertus Capital, 500 Startups, CoinGecko Ventures, Animoca Brands, and billionaire Mark Cuban.

Sky Mavis, which develops a blockchain-based game Axie Infinity, drew more attention when its crypto token AXS reached a market cap of US$2.4 billion in late July. And the company has since been making headlines.

Also read: Vietnam’s Sky Mavis receives US$7.5M Series A to grow its blockchain game Axie Infinity

Correlation between the company and its token

At US$69.91 per token at the time of writing this article, AXS is ranked 34th among the 6,073 coins listed on CoinMarketCap and has a market cap of US$4.2 billion. Remember, the price was just around US$3-4 a month ago.

AXS price mooned in the past month. Image credit: CoinMarketCap

Launched on the Ethereum blockchain, the AXS (short for Axie Infinity Shards) is the native play-to-earn governance crypto of the Axie Infinity ecosystem. It means that AXS holders will have a say in forming Axie’s decentralised organisation and can help define its development trajectory.

For the uninitiated, Axie Infinity is like a combination of Pokemon, Cryptokitties, and Decentraland (where you can buy virtual land). Players battle, collect and breed Axies (the name of the cute little in-game pets). Each Axie is a non-fungible token (NFT) that is traded throughout the ever-expanding Axie ecosystem.

Sky Mavis announced on August 17 that it reached 800,000 daily active users in July, and it soon hit the one million mark. The rise of AXS can be attributed to its unique economical design and game design, besides the crypto market’s FOMO (fear of missing out) nature.

AXS token holders can participate in key governance votes and decide how the Axie Community Treasury funds are allocated. They could also soon stake their tokens to receive rewards from the treasury, but only by voting and playing.

“This is a good way to align ecosystem’s long-term development goals and ecosystem players’ motivations,” Trung Nguyen, CEO and co-founder of Sky Mavis, told e27. “The more people utilise the token, the more utility the token has.”

These exciting models and good-looking numbers captivate the best VCs in the world to take a look at Sky Mavis.

Now that people are talking about AXS’s fully diluted valuation of around US$11 billion, but can it be considered the company’s valuation?

“It probably affects our valuation when dealing with other equity investors as AXS tokens are a part of the company’s asset,” said Nguyen. “However, it should not be comparable with Sky Mavis’s valuation because a large part of the token supply is still locked.”

Based on the current release schedule, AXS tokens will only be circulating fully by early 2026.

The upside is, Nguyen pointed out, there is a long and bright future ahead of Sky Mavis, which may catapult it even more within the VCs community. 

However, as the crypto market is driven by price fluctuations, much more volatile than the traditional capital market, a sudden plunge in price would worsen the company’s fundraising plan.

“But the risk is a nature of the investment, isn’t it?” he asked.

Nguyen added that while Sky Mavis is a company that might develop several projects, AXS is the governance token of only one project Axie Infinity. Thus, it indicates the discrepancy between the two groups of investors — one that invests in the company and the other in token sales.

When the mixed investor relations come into play

Let’s dive into the origin of the AXS token. After its launching in 2018, Axie Infinity conducted the sale of AXS tokens on Binance in 2020 and raised a total of US$2.97 million. This fundraising method is called IEO.

In IEO, cryptocurrency exchanges like Binance Launchpad will raise funds for project owners or token issuers. They oversee the token sales of blockchain projects, which go through a comprehensive due diligence process that may take as long as six months. ‍In return, the exchanges receive a listing fee and sometimes a percentage of the token sale.

In IEOs, information such as the company’s white paper, founders’ background, token design, and crowdfunding motivations are thoroughly examined before commencing a public sale.

“At Binance Launchpad, one of our core differentiators as a platform is the rigour and depth of our diligence process,” said Lynn Hoang, country director of Binance in Vietnam. “We may do multiple projects in a month, or we may wait a month if we determine we have not found the right project fit.”

The goal of the exchange is to support the ecosystem by offering access to users and assist promising blockchain-based project teams in driving adoption and awareness. Until now, 48 projects have been launched on Binance Launchpad with a total of funds raised of more than US$90 million from over 8 million unique participants.

Also Read: Initial Exchange Offerings are a thing. Here is your catch-up

“Crypto exchanges will have to do their best to safeguard their reputation. A successful listing means that the project is well developed and the exchange gains credibility in the community,” Nguyen explained.” In addition, this fundraising route has gained ground among retail investors as it reduces the risk of scams compared to ICOs [Initial Coin Offerings].”

Given Sky Mavis already had several investors in 2019 and later in 2021, how is it dealing with the stream of retail investors of AXS token?

“When you have new investors, there are new obligations, communications and relationships that you have to manage,” said Youngro Lee, COO at Republic. “That’s part of the journey. They learned very quickly that there’s never free money.” 

Republic is a US-based platform that offers both crowdfunding and token pre-sale instruments for early-stage startups. 

The complexity in the case of Sky Mavis and AXS can be stated as below. Suppose many people invest in the token, but the company’s focus is serving its VC backers’ intention rather than committing to the NFT project. In that case, this will immensely hurt the token investor community. The reverse could also happen.

“How to ensure the benefits for both groups of investors?” Nguyen said. “Our straightforward solution is not to reward our team members upfront.”

Sky Mavis still rewards a small part to members, but most of the amount set aside for the team (21 per cent of the total token supply) belongs to the company. “We have to earn board’s approval before making any fund allocations,” Nguyen said. “And it is subject to a certain lockup period even when the approval has been made.”

The company’s members see the lockup as a motivation to develop the project’s ecosystem, affecting the locked-up token value. Meanwhile, equity investors will be assured that founders will need to grow since the company still holds the token asset. 

This way, investors of both the company and the project will immediately align their incentives.

A similar story in crowdfunding 

This way of dealing with a large number of individual investors resonates with the story of US-based Gumroad. The firm took the crowdfunding route after raising a total of US$8.1 million+ through a group of VCs and angels. However, Gumroad, founded in 2011 in San Francisco with a service for creators to sell their work, failed to secure its Series B in 2015 as there was no interest from VC.

“We failed to raise and had to lay off almost everyone,” Sahil Lavingia, Gumroad’s founder and CEO told Crunchbase.

But after becoming profitable through the revitalisation period, till April 7, 2021, Gumroad used platforms such as WeFunder, StartEngine, SeedInvest, and Republic, to successfully close the remaining US$5 million equity crowdfunding from 7,331 ordinary people, who wanted to invest between US$100 and US$1,000 at the same US$100-million valuation. In addition, part-time Gumroad creators, Lavingia’s Twitter followers, YouTubers, Figma founder Dylan Field, and VC firm partners also co-invested.

This follows a new US regulation, announced on March 15, which enables companies to raise more money via equity crowdfunding, up to US$5 million via Reg CF and US$75 million via Reg A+ in 12 months. “I think it’s more accurate to say that this is our limited version of an ‘IPO,’” Lavingia noted in a blog post.

In the context of crowdfunding or equity crowdfunding, companies are often dealing with a large number of investors, which is very similar to a publicly-traded company. Lavingia even moved it further when he claimed to have already published the company’s financials.

“From that perspective, companies need an online presence and digital communication, whether it’s emails or social media,” Youngro Lee told e27. “Successful companies that are good at investor relations are those that are also very comfortable doing and utilising these kinds of online-based digital distribution channels.”

Gumroad is also open about its decision-making through a “2021 Open Board Meeting” published on the CEO’s Youtube channel. But the CEO realised that having thousands of investors can put external pressure on decision-makers in issues like moderation, de-platforming, and price.

“These are all very different considerations that companies should consider because this is a public process. You can’t have it both ways,” said Lee. “If you’re interested in leveraging the internet, raising capital from a large group of people theoretically could make it a little easier for you to raise capital.”

But if a startup is driven by “super-secretive ideas, trade secrets or intellectual properties,” crowdfunding might not be the right solution.

How do Gumroad and Sky Mavis manage their public presence and relations with both retail investors and VCs? It lies in the fact that their innate business models leverage the “community” concept, in which transparency is vital.

“It depends on the circumstances of the actual company, and what they’re trying to achieve and what kind of investors are looking for,” Lee added. “This will dictate the strategy that they use in terms of what, what specific crowdfunding or other fundraising mechanisms.”

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Image Credit: Gumroad, Sky Mavis, e27

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Pandemic-driven lockdowns have increased global reliance on and demand for digital financial services such as digital payments and remittance– especially within Southeast Asia.

Boosted by accelerated digital adoption and rising consumer dissatisfaction with traditional bank offerings, not only is the growing digital banking industry expected to generate up to US$60 billion by 2025, but the influence of traditional banks is waning as a result and 18 per cent are projected to shut by 2030.

Many digital banks in the region were created to cater for the sizeable unbanked and underbanked population in Southeast Asia, which is one of the world’s largest.

Their success, as well as the latent opportunity of a previously untapped market, has led to wider acceptance among regional financial regulators and could herald a major democratisation of financial services – as well as driving financial inclusion in SEA.

Staying in the game

Digital banks must survive to be disruptors and drive change. As the incumbent, traditional banks have the advantage of brand trust and recognition, making it hard for digital banks to compete as a newer player.

Some digital banks in other regions have been unsuccessful due to poor funding strategies, focusing on the wrong demographic or failing to inspire customer trust and loyalty, so Southeast Asian digital banks, specifically in the emerging markets like Singapore, Malaysia and Philippines, must avoid repeating these mistakes.

As digital natives, digital banks can leverage technology to lower the cost of funding and provide a better customer experience. For instance, using AI for customer service reduces labour dependency, turnaround times and customer waiting times, resulting in better efficiency and higher customer satisfaction.

Digital banks who have successfully leveraged technology have reported saving 20 to 30 per cent more on their per-account operation costs compared to traditional banks.

Digital banks also need to capture and grow overlooked market segments– such as the underbanked. By adopting a customer-centric vision, they can understand the specialised needs of this demographic and provide a unique value proposition that meets those needs.

This will go a long way towards increasing customer trust and stickiness, thereby helping digital banks build their customer base, scale across the region and further drive financial inclusion in SEA.

Diversifying and personalising lending and financial products

Despite significant inefficiencies in traditional lending systems, resulting in millions of creditworthy individuals being underserved or overpaying for loans, digital banks in other regions have not adequately filled the gap with innovative lending products.

Considering the digital lending industry is projected to be worth US$110 billion by 2025, this is a missed opportunity that Southeast Asian digital banks would do well to capitalise on.

The ‘old wine in new casks’ approach will not be sufficient here: digital banks must innovate to offer novel lending products and experiences to really differentiate themselves from traditional banks.

Also read: 3 ways fintech innovations are enhancing financial inclusion

With data and technology, they can help the unbanked open accounts with no minimum deposits, offer alternative credit scoring assessments for the underserved to qualify for loans, grant loans in five seconds or waive processing or early settlement fees for a higher borrowing limit – all uncommon features among less agile traditional banks.

Digital banks also need not limit themselves to traditional financial products. Southeast Asia’s heterogenous makeup and sizeable population also mean that there are markets for a diverse range of lending products, many of which remain underserved.

Some digital banks in the region have achieved success by innovating new lending products to capitalise on these gaps, such as creating specialised Islamic products and women-focused banking solutions. If digital banks continue to differentiate themselves with more financial innovation, this ensures that more financial needs are being met over a wider demographic distribution by default.

Expanding reach via consortia-driven ecosystems

Digital banks in other geographical regions often operate in vertical structures, which limit their ability to scale and has sometimes led to their downfall.

In contrast, many digital banks in Asia are consortium-driven, which is where partnerships are formed with established companies and associations to provide a myriad of services to customers across super apps or similar platforms. This allows digital banks to reach a far wider pool of customers and makes it easier to onboard them.

Being part of a consortium gives digital banks greater access to more business and consumer data ecosystems. With data-driven technology and analytics, they can be more responsive to changing consumer needs and wants by creating better customer-centric experiences and products that leverage on the strengths of all ecosystem members.

Some consortiums embed digital banking as part of a wider portfolio of everyday services on a single platform, which simplifies and improves financial accessibility – a boon for the underbanked and underserved.

Leading the way for financial inclusion in SEA

The first step to addressing the economic divide within the population is to ensure that everyone has the same access to and understanding of important financial services.

Digital banks play an important role in narrowing the gap by lowering the barriers for the underbanked and the underserved to participate in the financial ecosystem – as long as they can stay abreast of the unique needs of this market and innovate accordingly.

Ultimately, digital banks pave the way for a much-needed shakeup of the financial system and the time is right for them to capitalise on the supportive regulatory climate to improve financial service access.

In this modern age, no one should be deprived of financial services and healthy competition through innovation can only be a net positive for Southeast Asia’s overall socioeconomic growth – not to mention improving lives all around.

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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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Indonesia’s direct-to-consumer (D2C) insurance marketplace Lifepal announced today that it has secured an oversubscribed US$9 million Series A funding round.

ProBatus Capital led the round, which also saw participation from Cathay Innovation, Insignia Ventures Partners, ATM Capital and Hustle Fund.

This round takes Lifepal’s total fundraising since inception in 2019 to US$12 million.

Lifepal, which claims to have over four million visitors per month, said in a press note that it will use the fresh funding to improve its product and customer experience.

The company was started by former Lazada executives Giacomo Ficari, Nicolo Robba, and tech professionals Benny Fajarai and Reza Muhammad, with the vision of making financial protection accessible to everyone.

Serving the growing demands of Indonesia’s 270 million population in transparency, convenience, and access to a large selection of products, Lifepal acts as a one-stop platform offering over 300 policies across health, life, automotive, property, and travel.

The firm incorporates both educational content and an online marketplace that enables customers to select the right solutions from the comfort of their homes. Plus, its contact centre model provides live agents to address consumers’ potential questions and aid in payments and claims processing.

“We believe this three-pronged approach, tailored specifically to the needs of the Indonesian market, is driving the impressive growth that Lifepal has demonstrated since its launch last year,” said Ramneek Gupta, founder and managing partner of ProBatus Capital.

Also read: Insurance industry is poised for its “PayPal” in Asia

On top of these building blocks, Lifepal employs data from its financial content and community platform to offer accurate recommendations to consumers by matching them with the right product and customer support representative. This supports Lifepal’s relationship with its customers across the long customer-lifetime-value typical of the insurance industry with claim support, renewals, and cross-selling.

The insurtech firm has formed partnerships with more than 50 insurance agents which include some of the region’s largest players. It also claims to achieve 12x y-o-y expansion and growing 20 per cent m-o-m.

“During the pandemic, we experienced a strong increase in demand due to heightened awareness of health risks combined with the availability of our online platform during a time when in-person visits were avoided by most people,” said CEO Ficari. “We have entered the market at an exciting time: consumer behaviours are shifting online and we have the rare opportunity to continue to scale our traffic & branding to become the dominant online destination for consumers for the years to come.”

The growing middle-class and the rapid adoption of digital services has further Indonesia as one of the fastest-growing insurance markets globally. The market value is expected to reach US$58 billion by 2025, according to Munich Re Economic Research.

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Image credit: Lifepal

 

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