Like anything else that is digital in nature, virtual currencies such as Bitcoin and Ethereum are vulnerable to security and privacy breaches.

Such breaches can happen even if the cryptocurrency itself is highly secure. For example, Bitcoin’s blockchain ledger is designed with robust safeguards that it is practically impossible to counterfeit BTC or make fraudulent transactions.

Instead, the chink in crypto’s armour is more likely to be crypto exchanges and wallets, widely used by individuals to trade and transact with digital money. These third-party platforms are more vulnerable to hacking and fraud than the cryptocurrencies themselves.

What kinds of security risks might professional cryptocurrency investors face, and how can they be managed?

Fraudulent cryptocurrency exchanges

The internet is home to over a thousand crypto exchanges and virtual marketplaces for users to buy, sell, trade and transact with cryptocurrencies.

Although some countries do require exchanges to be registered and comply with local laws, they are, by and large, unregulated. This means investors get little protection from scams, fraud and Ponzi schemes when using crypto exchanges.

As you can imagine, the low barrier to setting up an exchange makes doing so quite lucrative to scammers. Unsuspecting investors may transfer fiat currency to purchase Bitcoin or other altcoins, only to receive nothing in return as the scammers make off with their money.

For professional investors who are used to doing their due diligence before investing, avoiding fake crypto exchanges might be less of an issue.

However, to be on the safe side, investors may want to consider regulated investment products such as a professionally-managed, institutional-grade Bitcoin fund as an alternative to trading on a crypto exchange.

Even the most legitimate of exchanges are still vulnerable to security breaches, as we’ll explain below.

Crypto exchanges being hacked

Although investors should thoroughly research their crypto exchange platforms and weed out anything that looks suspicious, this is not enough to mitigate the risks of investing in an exchange far from it.

Also Read: Cryptocurrency, money laundering and KYC: Why are regulations important?

Even well-established crypto exchanges with excellent track records are vulnerable to hacking. Hacking and data theft are a given on all virtual platforms, but it is especially rampant on crypto exchanges. After all, crypto tokens have become more popular and valuable in recent years, incentivising hackers’ efforts.

According to the website hedgewithcrypto.com, there have been at least 46 major crypto exchange hacks since 2012, with the total value of cryptocurrencies stolen adding up to an estimated US$109 trillion*.

It’s not just small players that get hacked; even the more established exchanges are vulnerable too. Some of the biggest crypto heists in recent history include:

Crypto Exchange	Hacked in	Estimated amount stolen in today’s terms*
Liquid	Aug 2021	US$146 million
KuCoin	Sep 2020	US$1.65 trillion
Upbit	Nov 2019	US$367 million
Binance	May 2019	US$400 million
Coinbene	Mar 2019	US$600 million
Bitgrail	Feb 2018	US$876 million
CoinCheck	Jan 2018	US$2.80 trillion
Bitfinex	Aug 2016	US$62.30 trillion
Mt. Gox	Feb 2014	US$42.46 trillion

*Assumes all stolen cryptocurrency was in the form of Bitcoin and at a Bitcoin price of US$60,000

Crypto exchanges are particularly attractive to thieves because users store their digital money on the platform, in e-wallets known as “hot wallets”, for convenient trading.

Hot wallets are usually locked with private keys auto-generated by the exchange and kept in its custody. Thus, once hackers gain access to a crypto exchange’s record of private keys, they can also use the stolen data to unlock and empty exchange users’ hot wallets.

Of course, any crypto exchange worth its salt would invest heavily in secure data storage to ensure its users’ funds are not stolen. Many established exchanges have beefed up their security, so hacking incidents are not as common in 2021 as they used to be. (That said, one of Japan’s biggest exchanges, Liquid, was compromised in August to the tune of US$97 million.)

In the event of a hack, the odds of victims getting their money back can be extremely slim. Unlike regulated entities like banks, crypto exchanges are not required to ensure users’ deposits.

Investors who use crypto exchanges should avoid storing more than necessary in their exchange wallets. Any excess should be transferred into a separate wallet (ideally one that’s offline) for greater security or to a professionally-managed, institutional-grade Bitcoin fund like Fintonia Group’s Bitcoin Physical Fund.

Crypto wallets being compromised

Given that crypto exchanges are often targeted by criminals, transferring any excess balances to a separate e-wallet seems like a wise thing to do. But even this may not be 100 per cent safe from hackers.

Of the many cryptocurrency wallets available, some are “hot” (online) while others are “cold” (offline). Hot wallets come in mobile or desktop apps and live on internet-connected devices like a smartphone or computers. They are meant to facilitate day-to-day use, such as paying for things with Bitcoin.

Also Read: The 27 Web3 startups in Singapore that show crypto is more than Terra Luna and stablecoins

But because they are connected to the internet, hot wallets remain vulnerable, especially if the user applies lax security practices. Hackers can target individuals’ hot wallets by phishing for passwords, using malicious cookies to obtain personal data, working with hacking devices on public WiFi, etc.

A cold wallet, which is not connected to the internet, is the safer alternative to avoid hacking. This is usually a USB stick-like device (known as “hardware wallets”) or sometimes a secondary, offline computer.

Being completely offline, cold wallets are far less likely to get hacked than hot wallets. However, there are trade-offs for this security level. These devices can be costly, extremely complicated to operate with lengthy passwords, difficult to transfer crypto-assets back, and the USB can be faulty, fake and/or lost.

How can investors safeguard their crypto holdings?

The above is a broad overview of the various security breaches associated with different types of cryptocurrency platforms.

As digital money becomes ever more ingrained in our lives and essential components of our portfolios, investors face a pressing need to overcome such vulnerabilities. Unfortunately, the work-in-progress nature of all things crypto means there is no perfect solution just yet.

Investors should adopt a wary stance even with seemingly legitimate tools and platforms and be prepared to invest significant time and effort into protecting their crypto assets.

Given that there is no one platform without security risks and/or trade-offs, the most feasible option at present may be to invest in a professionally-managed, institutional-grade Bitcoin fund managed by professional and regulated firms. 

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Novelship, a Singapore-based online marketplace for limited-edition sneakers, streetwear, and collectibles, today announced that it has raised close to US$10 million in Series A funding round co-led by GSR Ventures and East Ventures, with the participation of K3 Ventures and iGlobe Partners.

In a press statement, the company said that it plans to use the funding to support its further expansion in the Asia Pacific (APAC) market, particularly in countries where they already have a presence. It claimed to already have a “stronghold” in Singapore, Malaysia, Indonesia, Australia, New Zealand and Taiwan.

Novelship also aims to continue to explore metaverse integration and brand partnership in the retail space.

Its entry into the Web3 space began when the company introduced the use of cryptocurrencies as an alternate payment option on its marketplace.

“Since the start of this pilot, Novelship were able to serve more high-value customers thus increasing the average order value per customer. Over US$200,000 worth of sneakers has been bought in digital tokens in this period,” the company said.

Also Read: Kra-Verse Food Hall where cloud kitchen meets metaverse

Founded in 2018, Novelship puts Generation Z as its core target audience as a marketplace. The company said that since its inception, it has been able to serve customers across APAC with the sales volume growing at a staggering rate of 5.3X in 2021.

Its marketplace sells products from leading fashion brands such as Nike, Air Jordan, Yeezy, and Supreme.

“The sneaker and streetwear market has a huge potential globally and Novelship is uniquely positioned to win not just in the region but across the globe: we have cracked the code in Asia and are building on this success to reach a global footprint. Street culture is one of the rare opportunities in retail that has a global community of loyalists and we intend to capitalise on this to fast-track expansion,” explained Novelship CEO Richard Xia.

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Image Credit: Novelship

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Startups in Southeast Asia raised a record $25.7 billion in funding in 2021 alone; this was more than double the previous year. While this means that investors see great potential in businesses in the region, this also means that the competition here is fierce and it is not easy to stand out amidst the competitive landscape. 

As such, in a bustling, highly competitive startup ecosystem like Southeast Asia’s, there is one golden question that haunts all founders and entrepreneurs. What do VCs want? 

To help answer this question, we spoke with Eko Kurniadi, Investment Partner at Alpha JWC — one of the leading VCs in the region. With offices in Indonesia and Singapore, Alpha JWC has a team that brings together some of the region’s pioneer tech investors and experienced serial entrepreneurs.

With companies like Indonesian F&B unicorn Kopi Kenangan, Singapore’s largest AI-driven used car marketplace Carro, and fintech unicorn Ajaib in their portfolio, Alpha JWC is constantly on the lookout for companies and entrepreneurs that have the potential to rise and make a legacy impact.

What do VCs in Southeast Asia want?

First things first, before delving deep into Alpha JWC’s unique expectations and experiences, we first try to understand what VCs and investors look for in companies in Southeast Asia.

Eko shares that VCs, especially international investors, generally have a prerequisite for various forms of validation and proof points before they make the final decision to invest in a company.

Commonly, they look for the following:

• Hockey stick growth patterns (hockey stick refers to sudden and extremely rapid growth after a long period of linear growth. The term is often used to describe what happens when a startup business finds its market niche and market conditions are positive). This means startups are experiencing a positive but unprecedented market reception spurred by unique trends that are favourable to the kind of products or services being offered by those companies.
• Market leadership, which can be evidenced through a solid historical track record in comparison to other similar players in the space, and with a significant preference from users and customers who choose and stick with the product/service.
• The presence of reputable investors in the cap table (A cap table, or capitalisation table, is a chart typically used by startups to show ownership stakes in the business). Through this, investors will be able to pinpoint which startups are entrusted by other legitimate and reputable investors who are likely to share their values.

Eko explains that these are important checkboxes. However the above might not be apparent in the early days, especially in the early-stage rounds. That is where the next segment comes into play too in identifying early-stage startups to invest in.

Fundraising 101: Alpha JWC’s guide

Elaborating on what factors are crucial for Alpha JWC when selecting founders or businesses to invest in, Eko shared that the three most important factors that they consider when looking to invest are founders, market and product, and the “X-factor”.

He explains that the founder should have a vision and should be able to execute plans to achieve that goal while having the acumen to build the right team. “It is important for the founder to have clarity on what they want to build in the long term and have the fortitude to see it to fruition,” Alpha JWC prefers founders who are capable of executing their plans, and demonstrate great leadership qualities — reflected in their ability to build and hire world-class teams, and are inspiring and uplifting.

Also read: Get to know the startups in the 2022 APT 5G Challenge

Market & product is another important element, Eko explained.  The company should be targeting a sizable market, addressing the right pain points with the right product-market fit. Here, an important factor worth considering is looking at proven business models in a more mature market. Startups can always learn from the more mature and advanced markets like China or India, to try and understand what works and what doesn’t, while being cognizant of some differences in macroeconomic situation and customer dynamics.

And, last but definitely not least, the “X factor” is what matters a lot to Alpha JWC — it makes visionaries stand out. The “X factor” can be a significant advantage the team has, and this is not limited to things like a strategic backer — this ranges from the founder’s unique expertise to the team’s industry experience and from solid historical traction to various monetisation channels and proprietary networks to an innovative business approach. The X factor is what ultimately sets them apart.

Common missteps by founders: How not to turn off VCs

Indeed, “what do VCs want” is an important question to ponder on, but another question worth contemplating is “what don’t VCs want”. What are some common missteps that founders make at the time of pitching to VCs?

Eko shared that one of the most common challenges is actually a very fundamental one: not being able to articulate the big problem they want to solve, their clear solution, and how it is unique or different from other players in the field, as well as the vision or end-goal of the company.

In fact, according to a CB Insights report, the number one reason why startups fail was “no market need.” Hence, having clarity on what problem you want to solve should be key to startups seeking funds.

One great example of founders displaying clarity of thought and succeeding is Ajaib: an Indonesian fintech startup that allows its users to buy and sell stocks, ETFs, and mutual funds. The founders of this online brokerage startup were very focused on serving the underbanked and millennials in the country. And, with a clear objective at the core of the company, the founders were able to deliver a trading platform that is incredibly easy to use and onboard for retail investors. They continued to optimise and reiterate their product offerings for the increased benefit of users. As a result, today, they are one of the leading fintechs in the country and among the fastest to reach unicorn status in less than three years.

Also read: Sentient.io: Empowering businesses in the region by making AI adoption easy and affordable

Another misstep as shared by Eko is the gap between the founders’ expected valuation and the justified fundamentals of the company at that juncture. For example, many founders don’t understand that good early traction might not necessarily warrant a significantly high valuation. “Getting the highest possible valuation should not be the goal for early-stage founders. The priority should be finding the right partner who can help you achieve unicorn or even decacorn status,” says Eko.

Finally, lack of alignment and non-targeted discussions with too many investors is another major misstep. “Founders need to know the investor’s landscape, appetite, and value-adds that are relevant to their business. Talking to too many people will only create a distraction and potentially unnecessary noise in the market, Eko explained.

The ultimate rundown of tips for pitching and fundraising in Southeast Asia

Eko suggests that as long as startup founders focus on planning their cash flow and runway, layout key milestones, and hit each of those to show their execution capabilities, they will have a higher chance of securing funding.

He shared that founders should ask for a reasonable investment amount that can be justified. There is enough evidence to back this — one case in point is the infamous Quibi failure.

And, finally, it is crucial to LISTEN to investors’ feedback and criticisms, address those accordingly and come out stronger in the next meetings with them and/or other investors. This is simply because an investor brings in more strategic thinking where founders might sometimes be bogged down with everyday operations. An investor’s unique perspective with a more commercial inclination and the added advantage of experience from his many other investments is always something that founders can leverage for better decision-making.

Also read: PikoHANA: Helping Singapore startups scale through fractional finance

For acing the pitching game, Eko recommends that founders should kick off with a concise explanation of their mission and solution. “These need to be delivered with clarity and conviction,” he shared. Founders should have a powerful elevator pitch that will make an impression on a busy audience that hears numerous pitches on a daily basis. “To aid in their storytelling, founders should prepare materials to visualise key industry statistics, commercials, and future use of proceeds”, he added.

In a nutshell, fundraising and pitching don’t necessarily have to be painful and tedious. With the right approach and clear goals in mind, startup founders can thrive in a bustling ecosystem like Southeast Asia and eventually grow beyond international boundaries. 

To learn more about fundraising and pitching in Southeast Asia, watch out for the next ‘Alpha JWC Startup Series article.

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This article is produced by the e27 team, sponsored by Alpha JWC

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

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The past four years have been stellar for consumer growth in India, but the next five to 10 years will be even more interesting. This phase will see a slew of insurgents (now being called “challenger brands”) forcing larger incumbents to adapt.

The rise and growth

The rise in the consumer growth story will be supported by millions of first-time rural consumers and guided by the fourth industrial revolution. With increased data penetration, a rise in the per capita e-commerce spending, millennials’ willingness to consume more and the rise of inclusive insurgent brands, the consumer landscape in India will evolve.

A decade ago, insurgent brands were not part of your weekly or monthly shopping list. But, today, these same brands have been able to disrupt industries traditionally dominated by their larger counterparts.

They have done this by capturing a disproportionately high share of growth, delivering value by redefining the costing benchmarks for their category and, in some cases, disrupting the profit pool.

Incumbent (a term derived from politics) brands are established players in their category. They include both large multinationals and Indian corporations that have dominated the domestic consumer landscape for the past 30 years or more (e.g., Dabur, ITC, HUL, P&G, Coca Cola, Pepsi, etc.).

The aggressive pace of growth among the insurgent brands makes us think that these are no less than Davids to the incumbent Goliaths. Furthermore, it is the strategy of nichefication (identifying unserved gaps) of categories and delighting customers that aid these insurgents.

The Indian insurgent brands have two things in common. One, not only are they embedded with millennial culture in their DNA but are also driven by their consumption needs. They understand the needs, wants and problems of India’s rising middle class.

Also Read: How to set up your business processes for scaling your growth

Two, they can inspire consumer advocacy by delivering a competitive consumer proposition using eye-catching consumer-centric marketing campaigns that enhance the recall value of their brands. Their goal is to nudge the consumers to refer to their brand while addressing a product category.

The growth of insurgent brands has been possible due to a host of factors:

• The reliance on contract manufacturing and effective deployment of digital technology for micro-targeting consumers.
• The increased accessibility of venture capital.

These factors have contributed to reducing the barriers to entry and providing young brands with opportunities.

The further rise of insurgents will rest on five key growth drivers:

• India’s rising young middle class gives these brands a large consumer base keen to experiment and explore.
• The growth of the digital natives with increased data consumption and the e-commerce revolution allows brands to expand without relying on large, expensive above-the-line marketing campaigns.
• The behavioural impact of living a life using a smartphone.
• The third digital revolution will primarily be focused on rural India.
• The evolution of consumer attitudes as purchasing power parity and aspirations meet an equilibrium.

Redefining the way Indians consume

Though the rise of insurgent brands will redefine the way Indians consume, they might also be a catalyst for tackling India’s unemployment puzzle. Insurgent brands, with venture funding, tend to attract an experienced talent pool to tackle the incumbents.

Insurgent brands are also paving the way for growth by creating blue-collar jobs and setting the foundation for the development of the gig economy as Indian brands redefine the way they do business and achieve scale.

Also Read: How can design-thinking promote consumer trust in the digital world

Sales, warehouse operations, packaging, customer relationship management and support functions will employ a large section of the labour force that did not have access to these jobs in the past.

This being said, the incumbent brands are here to stay and will create value for their shareholders. But they need to understand and accept changes in the consumer. Being open to digital media, getting focused on e-commerce, stepping away from traditional marketing and achieving localised taste is critical.

Additionally, as insurgent brands emerge and engage consumers over the incumbent ones, the latter could employ mergers and acquisitions (M & M&A) activities to get a stronghold in a segment in which an insurgent might have secured a niche.

The synergy between incumbents and insurgents could be huge as leveraging a larger player’s distribution and marketing know-how could serve the insurgent very well.

However, the key question remains: Will David be able to give Goliath a tough fight in the coming decade? And will the incumbent brands be able to adapt to consumer tastes to retain the market share that the insurgent brands had disrupted?

Coca-Cola’s entry into jal jeera, Danone’s third India stint with the investment in Epigamia and the relaunch of HUL’s ayurvedic brand, Ayush, to counter Patanjali’s growth, along with its acquisition of the Indulekha hair care brand, show us how insurgents and incumbents are innovatively working towards increasing their market share.

The next few years will be a most exciting time in the consumer goods space in India. Entrepreneurs, investors, consumers, insurgents and incumbents will need to adapt and evolve quickly to capture the huge opportunity in rural and urban India.

This article first appeared in Hindustan Times.

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Indonesia-based digital investment app Bibit today announced that it has raised “more than” US$80 million in a funding round led by GIC, with the participation of Prosus Ventures and other existing investors.

This funding round followed a US$65 million funding round that the company announced in May 2021.

In a press statement, Bibit said that it will use the funding to support the launch of new products and services, develop its tech, acquire top talent from the
Indonesian market, and strengthen its financial education programmes –created to foster greater financial literacy in the country.

As one of the earlier robo-advisory investment apps in Indonesia, Bibit said that it has enabled millions of investors in 500 cities across the archipelago to build
investment portfolios based on their risk profiles and investment goals in a safe, simple and seamless way.

Also Read: Indonesian stock trading platform Stockbit to acquire local brokerage firm

The platform specifically targets mostly millennials and first-time investors.

Prior to launching Bibit in 2019, the company has been known for launching Stockbit, a platform for investors to share stock-investing ideas, news, and
information in real-time.

While the Bibit app focuses more on mutual funds and state securities, the Stockbit app focuses more on stocks.

The company has achieved several milestones in the past year, including the launch of Stockbit Sekuritas, an e-IPO feature that allows users to participate in a 100 per cent online IPO process. It has also launched Stockbit Academy which provides stock market education from experienced financial mentors for free and is appointed by the Ministry of Finance Republic of Indonesia as a Distribution Partner to sell the Government Securities (SBN) in early 2022.

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