Although Web3 is gaining momentum and drawing significant attention in many parts of the world as it promotes decentralisation, well-known entrepreneurs like Elon Musk and Jack Dorsey dismiss the concept.

“You don’t own “web3.” The VCs and their LPs do. It will never escape their incentives. It’s ultimately a centralised entity with a different label”, tweeted Dorsey in December.

Is Web3 a fad and too idealistic? Or is it the future?

We posed these questions to Chris Sirise (Partner at Singapore-based VC firm Saison Capital), who has been dabbling his hands in Web3 for the past few months.

Below are the edited excerpts from the interview:

Web3 is gaining popularity globally, including in Southeast Asia. How does Web3’s future look like in this region? What changes can it bring to the region’s startup ecosystem?

Southeast Asia is one of the best markets for Web3 to take off; consumers and businesses, used to higher traditional finance infrastructure challenges, can be more open to fintech innovation.

In our region, tokens have made it possible for companies to build strong and authentic communities around their products and brands. It won’t be surprising to increasingly see founders utilising these communities as a resource for growing their companies and brands.

Also Read: The transition is now: these Web3 apps are transforming global finance

The implications could mean significant changes in the dynamics built into the tech ecosystem as we know it. It will no longer just include founders, VCs and operators but also anyone involved in one of these communities through token ownership and is active in the community engagement. Founders will have more resources at their hands, and it will be increasingly easier to build a product to solve a problem.

What are the applications of Web3 and metaverse technologies in real life? Can you share some examples?

Adidas recently launched an NFT sale where holders of their NFTs will receive access to the limited edition Adidas merchandise. The holders of those NFTs have also become a community of Adidas’s most fervent fans.

FlamingoDAO is a decentralised autonomous organisation (DAO) that makes investments into NFTs and other assets through collective decision making among token holders.

Is Web3 a fad as it is still in its early stages of development and remains abstract and speculative? Why is the concept drawing widespread attention?

Web3 is definitely in its nascent stage, but the growing traction and real use cases have made it undeniable that Web3 as an industry will grow quickly and become enormous. Decentralisation and authenticity may seem like terms that have been overused in the context of blockchain’s history. However, with Web3, we see the theory of these terms turn into real shifts in culture.

While its proponents describe Web3 as the next framework for the next digital era, many like Jack Dorsey and Elon Musk have dismissed the concept as too idealistic, suggesting its promise of broad ownership is too good to be true. How do you view these comments?

Absolute decentralisation is unlikely to be the panacea for everything. In some cases, centralisation can be helpful to ensure there is a way for appropriate intervention when prejudices or nefarious activities occur.

Also Read: 7 Metaverse companies in Southeast Asia that caught our attention in 2021

However, Web3 should have more distributed ownership because tokens have introduced new ways to build communities around any company or product with aligned incentives.

A UK-based engineer and blogger, Stephen Diehl, says web3 is a vapid marketing campaign that attempts to reframe the public’s negative associations of crypto assets into a false narrative about the disruption of legacy tech company hegemony. Is there some truth to it?

The layman in the digital age is smarter than most people expect. Most recognise that the ideological benefits or disadvantages of both crypto assets and Web3 are very much the same. We see potential contrasts in the application, and in reality, that is what individual users will take away the most. Any piece of technology used in different hands will result in different outcomes.

Facebook recently expressed its intention to become a metaverse company and re-branded it as Meta. Don’t you think metaverse in the hands of one corporation will be detrimental to the entire Web 3.0 decentralisation movement?

Yes, it would be. However, it is too early to tell if that will happen. A safer assumption would be that Facebook will have many capable competitors with the same objective, and the end state will not be Web3 in the hands of one corporation.

Some say Facebook’s monopoly over metaverse will encourage competitors to come up with their own versions, leading to several ‘closed’ metaverses, which would be the Web 2.0 system all over again. Your comments…

Web2 ended up with closed ecosystems mainly because no other model was available. Now both businesses and consumers have options and choices. Blockchain as technology also has the fundamental advantage of being interoperable. Those two factors coupled will ensure the metaverse will unlikely be a monopoly.

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Japanese soccer star Keisuke Honda has launched a new global platform to connect startups, angel investors, VC firms and influencers from Japan, Asia and worldwide.

PROTOCOL, touted as “AngelList of Asia”, will leverage technology to ease burdens on founders and investors while boosting the ecosystem. 

In addition, the platform will be available for people seeking jobs in startups, planning to start a business or investing.

According to a press statement, since its alpha version was released six months ago, PROTOCOL has attracted more than 2,000 users from over 50 countries, including some well-known Japanese companies and venture capital firms such as SoftBank Vision Fund.

As executive chairman of PROTOCOL, Honda will utilise his global influence and connections as a soccer player to create a bridge between Japanese, Asian and the global startup ecosystems. Honda himself interviewed several founders he met on the platform and invested in 10 companies.

Also read: Understanding the traction metrics that investors are looking for in an early stage startup

Honda is touted as a top-scoring Asian soccer player in the history of the World Cup and the only player to register a goal and an assist in each of the last three tournaments. He was catapulted to stardom in Europe as the first Japanese player to be in the quarter-finals of the UEFA Champions League and scoring in the knock-out stages for CSKA Moscow.

Before PROTOCOL, Honda established KSK Angel Fund in 2016 to invest in new startups. By November 2021, KSK Angel Fund backed more than 90 Japanese and international firms.

“I’m now thinking of investing in about ten companies. Not limited to this prize amount, I plan to continue angel investing using KSK Angel as much as I can to create at least a slightly more peaceful and bright future for next generations,” Honda said in an interview.

Two years later, he joined hands with Hollywood actor Will Smith a VC firm Dreamers Fund. The fund was backed by Japanese institutions such as Nomura, Dentsu, and Shiseido, targeting Silicon Valley startups. Its principal goal and value are to act as a bridge to connect Japanese firms to knowledge, personal contacts, and commercial prospects in the global startup market.

So far, Honda has managed a portfolio of over 180 firms via the two funds.

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Image Credit: PROTOCOL

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SME growth financing platform Validus Vietnam, early-stage VC firm Do Ventures, and multi-industry conglomerate TTC Group announced today a joint venture to help local SMEs get credit access.

TTC Group has participated in the JV through its group company DHA Corporation, an investor in real estate, health, and sports.

The JV aims to drive financial inclusion and empower the growth of underserved SMEs in Vietnam. It will leverage TTC’s large ecosystem of SMEs across Vietnam’s energy, real estate, cane sugar, and hospitality industries. At the same time, Do Ventures’s expertise in fintech will support Validus’s growth ambitions, and the JV will benefit from potential synergies with portfolio companies under Do Ventures in future.

SMEs play a pivotal role in Vietnam’s economy. However, access to credit remains a pressing issue for SME development in the country. The SME financing gap stands at 12 per cent of its gross domestic product (GDP).

Also Read: Validus Capital enters Vietnam; eyes a slice of the US$21B SME financing market

According to a World Bank Survey, during the COVID-19 crisis, the lack of access to finance has been exacerbated as liquidity remains a challenge under a continuous demand reduction. About 50 per cent of firms have under three months of cash flow, and over 60 per cent of firms have reported some difficulties with access to finance.

Vy Le, General Partner of Do Ventures, said, “The pandemic has accelerated the digital transformation of SMEs in Vietnam, and there is a big opportunity for fintech firms to create meaningful and lasting impact through partnerships and technology. We look forward to harnessing synergies to strengthen SME resilience, drive growth for SMEs, and in turn, the economy.”

Since its launch in 2015, Validus has disbursed over US$1 billion in SME loans across Singapore, Vietnam, Indonesia and Thailand. The company is backed by highly reputed VCs, including FMO, Vertex Growth, Vertex Ventures Southeast Asia and India, AddVentures by SCG, K3 Ventures, Openspace Ventures and VinaCapital Ventures.

Also Read: Naver, Sea, Vertex invest in Vietnamese VC firm Do Ventures’s US$50M fund I

Do Ventures is a US$50-million early-stage VC fund. It seeks investment opportunities in technology startups that can develop meaningful products and services to improve consumers’ lives in Vietnam and Southeast Asia.

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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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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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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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Indonesia-based solar power-as-a-service startup Xurya has completed its Series A financing of US$21.5 million (Rp 308 billion), it announced today.

East Ventures (Growth Fund), formerly EV Growth, and local investment firm Saratoga, co-led the round. Existing investors Schneider Electric and New Energy Nexus Indonesia (a smart energy-dedicated incubation and accelerator programme), also participated.

Xurya plans to utilise the capital to continue the construction of its Rooftop Solar Power Plant (PLTS), which it said witnessed a 3x growth in 2021. A portion of the money will also be used to develop technology and human resources.

Also read: Why 2021 was a landmark year for the carbon market

Launch in 2018, Xurya offers a “no investment” method with a rental system to make it easier for industry players to transition to solar energy. Its “one-stop solution” covers PLTS feasibility studies, installation, operation, and maintenance (including component replacement).

To date, Xurya claims to have delivered more than 50 PLTS projects with a multi-megawatt power generation portfolio. It caters to various industries, including manufacturing (F&B, FMCG, building materials, steel, textiles, and garments), cold storage, logistics centres, hotels, and shopping centres in various cities in Indonesia. 

Xurya counts Tokopedia, Traveloka, logistics giant MGM Bosco, and Jakarta shopping mall Plaza Indonesia among its clients.

PLTS is also one of the initiatives supported by President Joko Widodo to reduce dependence on fossil fuel energy. The government is making a serious effort to bring the new and renewable energy mix to 23 per cent by 2025 and 31 per cent by 2050, as laid out in the country’s National Energy Plan.

Also read: How debt financing, crypto, SPACs keep the climate-tech funding momentum in SEA

Formed in 2018 as a joint venture between East Ventures, Sinar Mas-backed SMDV, and Yahoo! Japan Capital, EV Growth was rebranded as East Ventures (Growth Fund) in March last year. The firm is looking to complete the final close of its second fund by Q1 2022, DealStreetAsia reported.

 

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Vietnam-based social commerce startup, ON, has received US$1.1 million in a seed funding round led by local VC firm Touchstone Partners, with participation from VC firm-cum-accelerator ThinkZone Ventures.

With this, ON intends to expand its presence locally and develop tech solutions to serve sellers’ management, delivery, and capital needs.

ON was founded in 2021 by Giang Nguyen (a former tech lead at Vietnamese ICT giant FPT), Dzung Luu (who previously led the operation at Vietnamese ride-hailing startup BE) and Minh Nguyen (former CFO of Logivan).

The startup helps entrepreneurs earn extra income by starting an online business with assistance in orders, fulfilment, returns, shipping, and transactions. Sellers on the platform use social media networks to promote an item and receive a commission. Each seller may earn up to US$300 each month, the firm claims.

Also read: A look at the future of social commerce

“With e-commerce set to see robust growth in Vietnam, we believe social commerce has enormous potential,” said Khanh Tran, Managing Partner of Touchstone Partners. “This is a very local business, and ON’s founders have the local market experience and expertise to play a significant role in driving its growth.”

Since its inception, ON claims more than 10,000 people signed up to sell on the platform, of whom 90 per cent are women. The vast majority of dealers are located in small towns or rural areas. 

According to a Google and Bain & Company report, Vietnam is predicted to be the fastest-growing e-commerce market in Southeast Asia by 2026, with e-commerce gross merchandise value (GMV) reaching 56 billion USD by 2026, 4.5 times the estimated value of 2021. 

Social commerce is a concept that first took off in China and then slowly spread to different regions in the world. In the country, social commerce accounts for around 11.6 per cent of the total retail e-commerce sales, with over US$186 billion in 2019. Amid the COVID-19 crisis, the global social commerce market is estimated to increase at a soaring rate of 31.4 per cent.

Last year, global investors had poured into SEA social commerce startups, including Indonesia’s Desty, Kitabeli, Super, and Segari; Singapore’s abilion and Raena; and Vietnam’s Mio.

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