The funding winter is all about the survival of the quickest. Startups that can reflect and pivot in time will thrive when the spring eventually returns to the startup ecosystem, according to Ivan Ong, Investment Principal at AFG Partners.

“Cash preservation should be top of mind for all founders, and extending the cash runway ahead of further market turns is key. All our portfolio companies have done scenario and contingency planning to prepare for macro events, i.e. supply shocks/further inflation,” Ong said in an interview with e27.

Instead of rapid growth, profitability and efficiency should be the focus for startups. Founders should focus on burn multiples, defined as the ratio between net burn and net new revenue. They should also constantly question whether the company is capital-efficient or can achieve sustainable revenue faster with a lower cash burn rate. That said, real leaders are forged in crisis, and adversity creates stronger businesses, as history has demonstrated, Ong added.

“We expect 2023 to be another choppy year in the markets, but we will continue to keep our discipline and focus. We continue to believe that B2B/enterprise fintech will be the future growth story for Asian Financial Services and expect more and more companies in the region and around the globe to look to expand their activities across Asia,” Ong went on.

Driving fintech growth in Asia

Founded in 2020, AFG Partners is an Asian-based specialised VC fund investing in the area of B2B and enterprise fintech. The fund invests in global pre-Series A to Series B companies with a proven track record in their home markets and are looking for value-added investors to help them expand across Asia.

Also Read: A tech worker’s 2023 recession game plan

The fund focuses on investing across the areas of embedded finance, capital markets, insurtech, the CFO stack, and enabling technologies. It looks for businesses that currently operate/plan to operate in multiple countries across Asia for potential investments. These businesses should be built by entrepreneurs with years of specific domain expertise and a strong network in their area of focus. They also need to be reliable partners to financial institutions and corporates, addressing their critical needs.

“It is our thesis that the next generation of Asian fintech will be led by enterprise and B2B fintechs that will partner with incumbent financial institutions and emerging tech players that want to secure their place in a world where tech and finance are merging,” he noted.

So far, AFG Partners has invested in six fintech companies: Aspire, Osome, Brankas, Finsemble, Ignatica and Traydstream.

“We saw the dislocation in the markets in 2021 and the proliferation of unsustainable valuations. Rather than succumb to FOMO and deploy at unattractive valuations, we invested in well-run businesses with a path to profitability and at reasonable and sustainable valuations,” mentioned Ong.

Survival of the fittest

Venture capital and research firms predict the funding winter will last between 12-24 months. Startups are rationalising their business verticals and burn rates by cutting down their workforce and closing verticals, among other things.

In the past few months, startup layoffs are estimated to have impacted 10,000 people. This drier fundraising landscape is a litmus test revealing the true sustainability of business models and sector demands.

With the successful closing of its fund in 2022, AFG Partners finds itself in an advantageous position with more than 85 per cent of the fund’s capital still to be deployed.

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Two things are common to all living things: ageing and death. It is not coincidental that the former always culminates in the latter. While death can be abrupt and sudden, ageing is more gradual in living things, sometimes almost imperceptible. 

For human societies, ageing signals a potential atrophy of culture, values, economy, and possibly the position of power and influence that some societies wield. 

While old age is synonymous with wisdom in some societies, the consequent loss of youthful vibrancy and energy in many of its members can undermine the ability of a society to innovate, cope with new challenges, and potentially cater to the needs of its populace adequately. 

“Ageing is actually the root cause of many illnesses that we encounter later in life,” says Jeffrey Duyvesteijn, the CEO of For Youth, a Singapore-based company which aims to help people live healthier for longer. “This goes from small issues like wrinkles to much more serious diseases such as Alzheimer’s or cancer. Slowing down ageing can, therefore, lead to a longer, healthier life.”

The inevitability of ageing demands that every society devise means to mitigate the impact on its existence and viability. “People do not only age in societies where they can move into a small flat or a care home, but also in poverty, in the cold without a home or enough to eat,” said Eleonor Kristoffersson and Thomas Strandberg in a book on interdisciplinary research on ageing. 

Ageing successfully

As per United Nations data from 2020, the percentage of the world’s population aged 60 and above outnumbers those aged five and below. This situation is, however, more pronounced in some countries than others. For instance, about 30 per cent of the Japanese population is over 60 years old.

Also Read: Healthtech data: The race for new oil in Southeast Asia

Moreover, in Asia and the Pacific, one in four persons is expected to be over 60 years old by 2050, with the population of older persons in the region expected to triple by 2050, rising to about 1.3 billion people, according to the Asian Development Bank. The Bank said the transition in some countries, such as China, Sri Lanka, Thailand, and Vietnam, will be rapid, but it will be slower in others, such as Indonesia.

Regardless of the frailty that accompanies ageing, research published in July 2021 explained that some elderly people play vital roles in society by remaining active longer, volunteering, and caring for family members such as grandchildren. This is what many researchers refer to as successful ageing. 

While its definition seems nebulous, most researchers agree that successful ageing implies good physical and cognitive capacities, the absence of disease or disability, and an active lifestyle. 

But not many old people experience successful ageing. A 2016 Swedish study on people aged 76 and above showed health status deterioration between 1992 and 2002. The researchers, however, observed a significant reduction in disabilities in the demographic. 

Singapore’s action plan for its silver tsunami

A 2018 study examined the irony of Singapore’s debacle: a young nation with a rapidly ageing population. The study showed that as of 2015, the country’s median age was 40, up from 34 years in 2000. The proportion of its population aged 65 years and above grew from seven per cent in 2000 to 13 per cent as of 2017.

A paper published by the Singapore Institute of Management in 2019 noted that the country’s population is among the fastest ageing in the world, explaining that a quarter of its population will be aged 65 and above by 2030.

By 2050, half of Singapore’s population maybe 65 years old and above. The challenge of Singapore’s ageing population, colloquially called the “Silver tsunami,” is compounded by a declining fertility rate and decreasing population growth. 

The government’s action plan highlighted how dire the country’s situation would be, noting that “there will be far fewer Singaporeans of working age to support our elderly” by 2030, when the country will have about “900,000 seniors”. 

Also Read: Solving multiple medtech problems with a single device powered by AI

“The number of older people in the Asia-Pacific region is rising at an unprecedented rate, and it is at the forefront of the global phenomenon of population ageing,” the United Nations Population Fund said.

The Singaporean government announced its Action Plan for Successful Ageing, detailing 70 initiatives in 12 areas, including health, housing, social inclusion, and learning. The Action Plans aim to help the country manage their ageing situation better. 

“Our city will be a city for all ages, designed sensitively and lovingly for seniors to age gracefully among family, friends and neighbours, leveraging on the potential of modern technology,” said Gan Kim Yong who was the Minister for Health and Minister-in-charge of Ageing Issues in 2016.

As Singaporean authorities ride on the back of its action plan, For Youth, a company founded by Duyvesteijn is using science-backed knowledge and products to help people slow down how their bodies age.

“For Youth provides easy-to-digest and science-backed knowledge on ageing and helps to track and counteract its effects with a biological age test and lab-tested, carefully sourced supplements to your diet,” said Duyvesteijn. 

Since some scientists now see ageing as a “disease” that could be cured, Duyvesteijn explained that healthy lifestyle choices and intake of certain supplements can either reverse or slow down ageing, thereby promoting longer, healthier lives. 

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Crypto funding down 42% in 2022 amid bearish market
Crypto companies raised a total of US$21.3 billion in funding in 2022; The industry is still reeling from a brutal 2022, having lost over US$2 trillion of its value throughout the year.

Binance to add 15%-30% staff despite market downturn
In 2022, Binance increased its headcount from 3,000 to almost 8,000, according to the CEO Changpeng Zhao; An additional 30% of staff would put the firm’s number of employees at over 10,000 globally.

Thai regulator questions crypto firm Zipmex amid buyout
The regulator claims that Zipmex Thailand could be functioning as a “digital-asset fund manager without permission.”; The statement specifically refers to its crypto returns-earning programmes, ZipUp and ZipUp+.

Voyager wins preliminary OK for US$1B asset sale to Binance US
The US Committee on Foreign Investment in the United States previously said that its review of the deal may play a part in the deal’s completion; If CFIUS blocks the sale, Voyager will repay customers with the crypto it currently has.

Coinbase to let go of 950 staff amid efforts to reduce costs
This is part of an effort to slim down operating expenses by roughly 25% Q-O-Q; The move comes amid a difficult time for the crypto industry, which is still reeling from the collapse of FTX, one of Coinbase’s exchange peers.

SG healthcare analytics startup Holmusk gets US$45M injection
The investors are Veradigm, Heritas Capital, Health Catalyst Capital, Novartis, and Northwell Holdings; Holmusk is a data analytics company aiming to solve complex problems in behavioural health.

Unicorns in India need to cut cash burn: S&P Global
The credit rating agency said that high-profile startups must choose between aggressively expanding to reach economies of scale or maintaining cash balances and improving cash flows.

SG-based Scorpio Electric bags US$6.75M funding led by EuroSports Global
The startup said it will commence mass production and global delivery of its motorbike – Scorpio Electric X1 – in H2 2023; The fresh funds will be used to manufacture the first batch of X1 production prototypes.

Parenting platform Supermom closes US$6M Series A
The investors are Qualgro and AC Ventures; Supermom provides data and consumer insights for over 200 consumer brands, including mother & child, education, FMCG, fashion, and beauty.

Logistics platform for e-commerce merchants Jumppoint raises US$6.5M
The investors include MindWorks Capital, Headline Asia, Chinachem Group; Jumppoint will use the money to strengthen local operations and expand its services in Thailand, Singapore, and Malaysia.

GoTo acquires Tokopedia subsidiary Swift Logistics for US$38M
The move will strengthen GoTo’s logistics arm, which already offers services such as same-day and instant delivery, intercity delivery, and large-volume delivery.

Fintech unicorn Xendit enters Malaysia by investing in Payex
Payex is a payment gateway provider; Xendit said that its entry into Malaysia could help more local businesses expand to other Southeast Asian markets; It has appointed Jason Siew as its general manager in the country.

It is costly to develop and sell insurance products in Indonesia: PasarPolis CEO
PasarPolis Founder says the insurance industry has a negative reputation as the claims process is bureaucratic and lengthy; It’s also hard for consumers to access insurance products, as they often have to communicate with agents to purchase them.

Startups that can reflect and pivot in time will thrive during funding winter: Ivan Ong of AFG Partners
Real leaders are forged in crisis, and adversity ends up creating stronger businesses, as history has demonstrated: Ivan Ong of AFG Partners.

How myFirst aims to provide a safer social media experience for children
Using myFirst, children can create posts and share photos with their circle of friends without the need for parents to approve every post.

Kakao Entertainment bags US$964M from sovereign wealth funds
Reports say the investors are Saudi Arabia’s Public Investment Fund and Singapore’s Pwarp Investment; Kakao will use the fresh funds to boost global expansion efforts and to make more investments and acquisitions.

VNG chief exec Le Hong Minh relinquishes post as chair
He relinquished the post to comply with the country’s Law on Securities, which does not allow the chair of a public company to concurrently hold the title of CEO.

Profitable e-commerce: Making real money in the new year
In the world of e-commerce, the most common tailwinds are the events and occasions when people are ready and willing to shop more.

Are you ready to put on a Founder’s hat?
Here are the five critical questions you must ask yourself before leaving your job and venturing into the world of startups.

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Singapore-based cryptocurrency platform, Crypto.com, has laid off about 20 per cent of its employees globally.

In a message on the company’s website, Co-Founder and CEO Kris Marszalek attributed the decision to the global economic situation. These reductions were not related to the performance of the employees.

It is not immediately clear how many jobs have been affected by the decision. As per its LinkedIn profile, 4,659 employees are working for Crypto.com.

“Today we made the difficult decision to reduce our global workforce by approximately 20%. All impacted personnel have already been notified. These reductions were in no way related to performance, and we extend our deepest gratitude for all their contributions to Crypto.com,” he said in the message.

He added that several factors played into the company’s decision to reduce headcount. “While we continue to perform well, growing to more than 70 million users worldwide and maintaining a strong balance sheet, we’ve had to navigate ongoing economic headwinds and unforeseeable industry events.”

Also Read: Compassionate layoff — Airbnb shows the way

According to him, Crypto.com grew ambitiously at the start of 2022, aligning with the trajectory of the broader industry. However, that trajectory changed rapidly with a confluence of negative economic developments.

“The reductions we made last July positioned us to weather the macroeconomic downturn, but it did not account for the recent collapse of FTX, which significantly damaged trust in the industry,” he went on. “It’s for this reason, as we continue to focus on prudent financial management, we made the difficult but necessary decision to make additional reductions in order to position the company for long-term success.”

Marszalek also noted he and the top management team are as confident as ever in Crypto.com’s mission and vision.

“We have a significant year ahead of us as we continue to help restore trust in our industry and further mainstream our services in markets around the world. I am confident in our ability to build and lead the market, and I am grateful to work with you all on the journey ahead,” he said.

Founded in 2016, Crypto.com provides regulatory compliance, security and privacy certification. The firm saims to accelerate cryptocurrency adoption through innovation and empower the next generation of builders, creators, and entrepreneurs to develop an equitable digital ecosystem.

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