Paywatch, an earned wage access (EWA) service provider operating in South Korea, Malaysia and Hong Kong, has raised US$5.25 in a seed funding round.

US-based VC firm Third Prime and unnamed family offices in Singapore and Hong Kong led the round. SparkLabs, Won & Partners, and CTK Investments also participated.

The capital injection will enable Paywatch to scale in its existing markets and expand into new Southeast Asian countries, such as the Philippines and Indonesia.

“On-demand pay has seen meaningful traction in the US as a modern way for individuals to exercise greater control over their financial health,” said Michael Kim, Partner at Third Prime. “We see an enormous opportunity for Paywatch to use this model to democratise access to capital throughout Asia.”

Also read: Don’t break the bank: Enabling financial inclusion and equity through tech

Paywatch was founded in 2018 by Korean brothers Alex Kim and Richard Kim, the former Country Manager of MasterCard Prepaid and former Sr. VP of HSBC in South Korea.

The startup works with employers and banks to provide instant workers access to their earned wages before payday. This helps workers avoid high-interest payday lending practices to cope with unexpected financial strain. In addition, Paywatch also serves as a bridge that provides its underbanked users with direct financial access to banks.

The startup claims to have integrated with five financial institutions across Asia, including Hong Leong Bank in Malaysia and Hana Bank in South Korea.

Bain & Company estimates that around 55 per cent of Malaysia’s adult population is still underbanked and unbanked. 

This percentage is even higher in other markets. Vietnam, the Philippines, and Indonesia are among the top 10 most unbanked nations in the world, according to data compiled by British research platform Merchant Machine in 2021.

Also read: These 8 tech verticals are ripe for explosion in Southeast Asia in 2022

Paywatch joins other regional firms such as Indonesia’s wagely, GajiGesa and Vietnam’s GIMO to double down on improving financial stability for workers through EWA. 

 

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Image Credit: Paywatch

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F88, a secured lending provider and insurance distributor in Vietnam, has raised US$10 million in debt financing from Lendable, marking the London-based impact debt provider’s first investment in the Southeast Asian country.

This facility comes three months after the fintech startup sold VND100 billion (~US$4.3 million) worth of bonds to individual investors and a domestic securities investment fund to fuel its expansion of pawnshops.

F88 aims to serve unbanked and under-banked individuals and MSMEs in Vietnam better with the latest funding. It plans to disburse half a billion US dollars in 2022.

Also read: All you need to know about the fintech boom in Vietnam

Established in 2013, F88 renovates the traditional pawn shop model in Vietnam’s alternative lending sector to provide borrowers credit access with inexpensive, transparent, and quick financial services.

Its offerings include secured loans, insurance, utility bill payment, money transfer, and e-wallet deposit and withdrawal services.

F88 claims to have achieved profitability since 2019 with a network of 525 shops across 60 provinces nationwide (as of December 2021). 

It has also expanded beyond F88-branded stores to bring its services throughout a network of nearly 4,000 F88 shops and stores of retailers and tech partners. 

F88 stated that it recorded a 113 per cent revenue growth and a loan book growth of 70 per cent in 2021.

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Image Credit: F88

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Since the COVID-19 pandemic struck our nation in 2020, local businesses continue to be greatly impacted on many fronts. According to the SME Association of Malaysia, at least 100,000 SMEs have ceased operations since the first MCO.

Not only that, Datuk William Ng, Central Chairman of Small and Medium Enterprises Association (Samenta), said many businesses that survived were either in the right industry or kept afloat by digging into savings to pay salaries and suppliers.

For many of these businesses, especially those within the food and beverage (F&B) sector, the core focus has shifted from profitability to survivability, with the need to adopt new business strategies to remain operational.

In a few months from the first lockdown, the disruption has led to over 2,000 eateries shutting down permanently. The ongoing restrictions could further affect 60 per cent of F&B operations, eventually leading to more closures.

While the outlook of the F&B industry remains uncertain, many businesses have shown resilience and adapted to the new normal – such as exploring new opportunities to source quality ingredients at reasonable prices or additional revenue streams by expanding their customer base through digital means to ensure their business survival and potentially, growth.

Also Read: How COVID-19 accelerated digitalisation in the F&B industry in Malaysia

Food disruption and cost inflation: A key disruptor to the Sector

Challenges faced by the F&B industry had happened since the first nationwide lockdown when the food supply chain encountered disruptions due to travel restrictions, market opening hours and closing of local open markets.

The supply of produce from farms have been affected by bottlenecks to meet demand, coupled with movement restrictions and dependency of the season, which has led to a decrease in food supplies.

The cost of food supplies undoubtedly plays a significant role in strategising their expenditure. Datuk Jawahar Ali Taib Khan, President of Malaysian Muslim Restaurant Owners Association (Presma), said that the price of raw materials had more than doubled since the second lockdown.

Supply cost is a key determining factor to the price of end products for consumers and how long a business can sustain through this arrangement. According to the United Nations Development Programme (UNDP), suppliers must find a flexible and resilient supply chain by mapping their stakeholders in a system, mitigating potential business impact due to supply disruptions and price inflation.

Given the current circumstances, going digital has been instrumental for businesses to regain a sense of normalcy. Having digital access provides businesses with an alternative to reach out to customers and suppliers alike.

Transforming by digital means

However, the initiative to push businesses to digitalise is not new in Malaysia. There have been many government initiatives in the past to spur digital transformation. Still, adoption thus far has been slower than expected, especially among SMEs, with only a third of Malaysian enterprises going digital. In contrast, less than a quarter has a digital team, according to the World Bank June 2021 report.

Also Read: 25 notable startups in Malaysia that have taken off in 2021

The emergence of COVID-19 has accelerated businesses’ ability to adapt to new and innovative strategies to remain resilient in times of crisis.

Digitalisation is crucial today as many businesses have recognised the benefits reaped during the MCO, with 40 per cent increasing their focus on online sales and 70 per cent of companies expecting their revenue to grow in 2021, according to a survey by CPA Australia.

Driving digitalisation has also been central in the Twelfth Malaysia Plan, where accelerating technology adoption and innovation constitutes one of the catalytic policy enablers that will direct the nation towards resettling the economy and achieving a high technology-based economy.

This will accelerate Malaysia’s adoption and application of digital and advanced technology to unlock new opportunities.

How this translates for the local F&B sector is that embracing digital transformation in the form of digital tools and platforms will be critical towards improving business sustainability and operational efficiency.

Businesses can reduce costs and increase their profit margins when using advanced digital technologies such as data management solutions, increasing productivity by 60 per cent, according to research by Huawei Technologies.

Bringing two digital tools together to elevate F&B businesses

Recently, F&B solutions provider Saladplate and Food Market Hub collaborated to offer a comprehensive digital platform for the local F&B sector, designed to simplify the product sourcing journey and manage business expenditure intelligently.

Platforms such as this don’t just offer businesses a digital marketplace to gather and conduct business. The proprietary AI-Powered, Cloud-Based procurement solution within the platform enables business owners to be cost-efficient and assist them in making purchase smarter decisions, which is vital during this challenging period.

This echoed the Malaysian government when it announced the Budget 2022 plan to encourage technological transformation. The allocation of MYR30 million to implement an IR 4.0 innovation hub and MYR20 million for Cradle to oversee the startup ecosystem points to the goal of centralising technology and innovation as a means of local businesses, enabling them to remain competitive during this post-pandemic Malaysia.

Also Read: How cloud kitchen startup COOKHOUSE, started amidst COVID-19, managed to win 35 F&B clients in Malaysia within a year

According to Jimmy Lai, president of CPA Australia’s Malaysia Division, 42 per cent of Malaysian businesses saw positive returns from their digital investments in 2020, and the focus on digital will likely see businesses recover quickly from the pandemic.

Din Tai Fung, an upscale Taiwanese restaurant chain, is an example of a business in Malaysia that have successfully adopted the digital platform and saw a 31 per cent increase in their year-on-year growth results in 2020.

Available digital platforms such as the one by Saladplate and Food Market Hub, amongst others, will play a significant role in driving business growth or its sustainability journey.

It is a pre-requisite in this digital age that F&B business owners should factor digital transformation in their business plan, utilising digital tools to provide them with the needed competitive edge during this period of economic recovery or thereon.

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Singapore-based live-streaming solutions provider BeLive Technology announced SGD6 million (US$4.5 million) bridge funding, led by FTAG Ventures, an investor in fintech, media, education, and mobile startups.

The funds will assist BeLive in developing artificial intelligence (AI) and machine learning (ML) capabilities in live-streaming. In addition, it intends to bring its live-video and live-commerce solutions to the global market by partnering with e-commerce giants, apps, and brands.

The company will also use the capital to scale its current headcount of 80 to 100 and expand local operations across international markets, such as the US, Europe, and the Middle East.

BeLive allows any website or app to broadcast live video with interactive elements such as live shopping platforms and analytics, live virtual gifting, and live trivia game shows. It has powered live streams for Zalora, Valiram Group, Rakuten Group, and Bukalapak.

Also Read: Opportunities for the live-streaming industry in Asia

The firm claims its live streams have reached more than 100 million viewers worldwide, amounting to more than 50 million hours of content.

Co-Founder and CEO Kenneth Tan said: “We’re in the midst of a direct-to-consumer revolution, with live video omnipresent in every brand’s customer engagement strategy. Our company always believed that the adoption of live video was inevitable. However, we were still astounded by the success of our customers like Trendyol, who easily rocketed past the million viewer mark in their beta live streams.”

The firm’s other notable shareholders include Singapore’s Mediacorp and current Speaker of Parliament Tan Chuan-Jin.

BeLive operates from three locations across the region, including Singapore, Vietnam and Shenzhen.

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Malaysian fintech-as-a-service company Soft Space has announced a strategic partnership with Japan’s international payment brand JCB Co.

As part of this, JCB has injected US$5 million into Soft Space. The collaboration will capitalise on the Kula Lumpur-headquartered firm’s business model, technology and regulatory know-how, and JCB’s global recognition, vast alliances and brand reach.

This is part of Soft Space’s first tranche of funding, with other investments to follow in the future.

JCB owns and operates one of the largest payment schemes in Japan, supporting about 37 million merchants and 140 million cardmembers worldwide. It will expand the brand globally by leveraging its strength in Asia, especially in Southeast Asia.

To this end, JCB has targeted SEA as a strategic business enhancement region. It established its ASEAN Business Enhancement and Creation Department in Singapore last June to seek business opportunities within the region.

The partnership also aims to harness synergies between the two parties and includes the expansion of JCB’s merchant network, the establishment of card issuing solutions, and the provision of customer marketing solutions.

Other collaborative areas include enhanced merchant acceptance, mobility-as-a-service (MaaS) and transit; payment gateways; cards-as-a-service (CaaS); white label services, API platform services and technical support services.

Also Read: Square and Stripe investor Sumitomo Mitsui Card Co. invests in Malaysian fintech firm Soft Space

“Being JCB’s first investee in Malaysia assures us that we are on track to develop financial solutions that will fortify payment acceptance between Japan and SEA and benefit both regions when borders open up again. This bridge between our regions will also serve as a roadmap for us to enter other regions globally in the future,” said Joel Tay, CEO of Soft Space.

Founded in 2012, Soft Space aims to simplify the complexity of financial infrastructure and create value-added features for businesses to expand their business growth. With over 30 financial institutions across ten countries adopting its payment solutions, Soft Space is supported by MDEC’s Global Acceleration and Innovation Network (GAIN) programme and received financial support through MIDA’s Domestic Investment Strategic Fund in 2012.

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