2022 has seen a proliferation of high-profile e-crime attacks. As we embark on 2023, it is only apt that there is a renewed focus on e-crime.

As global economies reopen and revenge spending surges in sectors such as tourism and luxury, retailers and organisations will be especially vulnerable during this period. e-crime groups are prolific and opportunistic and will strike where there is an opportunity to exploit vulnerabilities for financial gain.

Southeast Asia (SEA) and Singapore are not immune to such cyber-attacks. As data from OverWatch has shown, e-crime accounted for 33 per cent of interactive intrusion activity in APJ, while targeted intrusions increased to 35 per cent.

Policymakers and tech innovators in the public and private sectors must collaborate to drive dialogue and act on the latest trends. Securing your organisation has never been of greater importance during this period of festivities.

The rise of e-crimes in 2023 and the criminal marketplace

There is a popular misconception that cybercriminals operate solo or in small cells. The threat landscape operates as a microcosm of “the real world.” Adversaries also sell services to other criminals, much like how legitimate businesses offer services to other businesses.

Also Read: Safeguarding digital assets through cybersecurity innovations

According to the CrowdStrike 2022 Falcon OverWatch Threat Hunting report, when looking at e-crime activity, retail was identified as one of the top five verticals by intrusion frequency globally between July 2021 and June 2022.

In the Asia Pacific and Japan region during the same period, the retail industry stood out as one of the top five industry verticals overall when looking at the cumulative total of both e-crime activity and targeted intrusions.

Just as retailers are searching for and employing new cyber defences, cybercriminals are evolving in their methodology and craft. Criminal organisations are adapting their tactics, techniques and procedures to stay ahead of security teams through legitimate employee credential harvesting and exploitation of new vulnerabilities from remote access applications, to name a few.

The Global Dark Web Intelligence Market size is expected to reach US$1.3 billion by 2028, rising at a market growth of 22.3 per cent CAGR, driven in part by another trend in the e-crime landscape, namely, the proliferation of the ransomware-as-a-service (RaaS) model – a business model between ransomware operators and affiliates in which affiliates pay to launch ransomware attacks developed by operators.

According to the 2021 CrowdStrike Global Security Attitude Survey, Asia-Pacific also clocked the highest average ransomware payment of US$2.35 million per attack, compared to US$1.55 million in the US and $1.34 million in EMEA. The vast global majority (94 per cent) of those who ended up paying their attackers were also forced into paying additional extortion fees, equating to US$734,677 on average.

Also Read: How to tackle cybersecurity threats during the holidays

To maximise their financial gains, e-crime adversaries have added the threat of data extortion to their arsenal, extracting and then threatening to leak sensitive customer or proprietary information to fuel specific and repeated victim targeting.

As we move towards the holiday season, it represents an opportunity for e-crime adversaries to strike, and SEA businesses would learn from recent, high-profile attacks on large-cap companies like Solarwind, Microsoft and Kaseya.

Focusing on cybersecurity is key

Organisations need to better protect and secure themselves to enjoy peace of mind during this festive period. Some tools and information can include:

• Combination of robust security hygiene and proactive detection: The seemingly overwhelming amount of new vulnerabilities and tactics employed by criminals may seem overwhelming. However, organisations can formulate a deliberate plan of action by employing a combination of robust security hygiene and proactive detection. By understanding that there is a human behind every attack, organisations can proactively look out for adversaries targeting them.
• Reviewing systems and ring-fencing: Organisations must proactively monitor for tell-tale signs of a pre-attack by identifying unusual access, maintaining up-to-date network diagrams and finally ring, fencing any attackers should they manage to break in.
• Secure organisational identity: Maintain proper visibility of administrative changes, especially with user accounts, as this is an early identifier of attacks.
• Arming employees: Employees need to be trained in taking personal responsibility for the organisation’s cybersecurity defence in the event a cyberattack occurs, especially during the festive period when key personnel may not respond promptly.

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Small potters in his grandfather’s village in Bangladesh faced direct competition from larger companies. These small unorganised businesses struggled due to their lack of access to customers and inability to distribute products as cheaply as bigger firms.

Afeef Zaman wanted to do something to help these small potters reach customers nationwide and improve their earnings.

“ShopUp was founded to assist them in reaching customers nationwide,” Zaman told e27. “We developed products for them and gained valuable experience from our efforts.”

These learnings came in handy during the COVID-19 pandemic, he said. “As the pandemic struck and households struggled to access essential items, we shifted our focus to food and household categories to serve people across Bangladesh. And that was a turning point.”

What is ShopUp?

ShopUp was founded in Dhaka in 2017 by Zaman (CEO), Sujayath Ali (COO & CBO), Ataur Rahim Chowdhury (CPO), and Navaneetha Krishnan (CTO).

Zaman and Chowdhury earlier worked together in the former’s first startup. Ali is a serial entrepreneur who previously worked at Amazon and Visa. Ali and Krishnan were also co-founders of Voonik. Krishnan worked at Freshworks, Aryaka, and Zoho before co-founding ShopUp.

Also Read: These five startups are the dark horses of the frontier markets

In a nutshell, ShopUp is a B2B e-commerce platform connecting small and medium-sized enterprises (SMEs) with mills and manufacturers. Its mission is to supercharge SMEs with easy access to B2B sourcing, best prices, financing, and logistics.

“Our platform provides SMEs with a one-stop-shop solution for sourcing products, reducing the time and effort required to find suppliers, negotiate terms and orchestrate the operations. Additionally, it acts as a nationwide platform for small manufacturers, mills, and brands to sell their products,” Zaman explained the business model.

The startup offers various value-added services, including financing and logistics support. According to Zaman, this makes it easier for small firms to grow their businesses and compete against prominent players.

In addition, ShopUp has built a vast last-mile logistics network in Bangladesh and provides one-click credit access with minimal documents.

The ShopUp CEO boasted that the e-commerce startup’s “robust” technology infrastructure, including advanced algorithms and data analytics, provides SMEs with personalised recommendations and real-time insights. Its user-friendly interface with handwriting and voice recognition technology manages the end-to-end purchasing process — from product discovery to order placement and shipment tracking.

“This combination of a diverse product offering across sourcing, logistics, financing and customer success services powered by cutting-edge technology sets ShopUp apart from other B2B commerce platforms,” he claimed.

The startup has partnered with all major mills and FMCG companies to distribute essential food items like rice, sugar, oil, flour, dairy products, beverages, and hygiene products to 20 million people in Bangladesh through its network of 500,000 shops. The goal is to provide all the food and household products these shops sell to the people in their community. “We’re still early in that journey, but we’re making progress,” he said.

ShopUp’s logistics and fulfilment network, RedX, is now one of the largest in the country. In addition, the e-commerce firm provides an embedded micro-factoring product for small shops and suppliers to purchase products without making upfront payments. It charges separately for each of its offerings.

A trillion-dollar opportunity

Bangladesh’s consumer e-commerce market is rapidly expanding and is projected to become a trillion-dollar economy by 2040, according to a report by BCG in 2022.

Despite this growth, retail consumption remains highly fragmented, with 98 per cent of purchases coming from 4.5 million small shops. These shops purchase an estimated 130 billion worth of goods annually, as per a 2020 Redseer report. This means ShopUp has only started scratching the surface.

“The B2B e-commerce industry is in its early stages in Bangladesh, and only a few players are operating in this field at scale. We are excited to see some early-stage companies in this sector; hopefully, more players will enter this market,” he continued.

While Bangladesh consumers have higher incomes than India, they purchase less than half of the branded FMCG products. This means Bangladesh is still in the early stages of its consumer market journey; there is a potential for multiple new players to enter the market.

The market leaders of most FMCG categories in Bangladesh are yet to launch. These new brands and products will require future-ready distribution platforms to enter the market successfully.

“B2B e-commerce players are well-suited to this purpose. According to a report by Redseer in 2020, the market opportunity in Bangladesh stands at US$130 billion. However, B2B e-commerce players are not set to replace the existing local distribution system but rather to expand the overall consumer market. As such, the pie will get bigger for all involved,” Zaman elaborated.

Doubling down on partnerships

Currently, ShopUp wants to double down on its partnerships with suppliers. Its goal is to help the suppliers reach 50 per cent of the population through small shops by the year-end.

However, there are several hurdles to clear before achieving this goal. “We are working hard to create a distribution platform that is not only accessible to 80 million people but is also the most cost-efficient in the country. This is a difficult task, especially when it comes to food and household items. However, we have been successful in making most of these products available on a large scale profitably,” he said.

ShopUp is a heavily-funded company having secured over US$200 million in investments from global investors since its launch. Its backers include Peter Thiel’s Valar Ventures, Prosus (the investment arm of Naspers), Pierre Omidyar’s family office, Sequoia Capital India, VEON Ventures, and Flourish Ventures.

The five-year-old company recently raised US$30 million in debt financing from UK-based fintech lender Lendable (US$20 million) and The City Bank (US$10 million), a major commercial bank in Bangladesh. This new capital will be used to expand its embedded financial services business. A portion of it will go towards making long-term investments in the supply chain capacity of the profitable categories of the business.

Also Read: Accelerating Asia, South Asia Tech invest in Bangladesh startup Shuttle

But why debt funding when it already has a huge war chest?

“Let me clarify that debt investment is not a substitute for equity capital,” Zaman said. Startups raise equity funding to create platforms. When they are close to profitability, and the revenue is reliable, it is better to use debt to finance any additional working capital requirements.”We are well-capitalised and therefore do not need to raise equity capital at this time. Nevertheless, raised debt to finance profitable parts of the business.”

Anticipating slower growth

Zaman also mentioned that while Bangladesh is not expected to go into recession due to global macroeconomic headwinds, it will experience slower growth than anticipated.

Investors have become more cautious when deploying their capital due to increasing interest rates. As a result, well-capitalised late-stage investible startups have suspended their fund-raising plans, leaving investors in a wait-and-see mode.

This means VCs are sitting on billions of dollars and will have to deploy these funds in the mid-term. “In the near term, capital will likely remain scarce, particularly for Series A or Series B startups in Bangladesh. The bar for future investments is also likely to be higher than in 2021 and 2022,” Zaman observed.

However, this presents a great opportunity for local startups to collaborate and explore new possibilities, and ShopUp is very excited about these opportunities.

“In the long run, Bangladesh remains an attractive emerging market due to its strong base demand and political stability, making it ideal for well-capitalised companies to build enduring businesses,” Zaman signed off.

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Fundraising or preparing your startup for fundraising? Build your investor network, search from 400+ SEA investors on e27, and get connected or get insights regarding fundraising. Try e27 Pro for free today.

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SoftBank posts US$5.9B loss as Vision Fund takes hits
Vision Fund 1 generated US$2.5B in losses, while Vision Fund 2 slipped by US$2.2B as SoftBank’s portfolio firms slog through the current economic downturn.

Cross-border payments solutions firm Tazapay bags US$16.9M Series A
The investors include Sequoia, EscapeVelocity, PayPal Alumni Fund, Foundamental, January Capital, and Saison Capital; The B2B cross-border payments firm will use the money for Middle East and Europe expansion.

Paul Allen’s VC firm joins SwipeRx’s US$10M Series B2 round
The investors include Sanofi’s Global Health Unit, Cercano Management, SIG, and Patamar Capital; SwipeRx’s digital network has over 250K professionals and 50K pharmacies, with 12,000 retail pharmacies from Indonesia alone.

VFlowTech nets US$10M to expand into Japan, US, Turkey
The investors include SEEDS Capital, Wavemaker Partners, and Sing Fuels; VFlowTech is a vanadium-based redox flow battery company; It plans to set up a 200MWh production line capacity.

Thai mental health startup Ooca closes series A fundraise
The investor is Bangkok Dusit Medical Services; Ooca lets users arrange video consultations with psychologists and psychiatrists; It also offers corporate packages for business clients.

Indonesia’s FDA asks Halodoc to take down listings of prohibited drugs
A Tech in Asia report found that Temasek-backed Halodoc was enabling the sale of at least 11 restricted drugs, including antipsychotics, pharmaceutical precursors, and medication for erectile dysfunction.

Vietnam’s VinFast reduces headcount in the US
The company didn’t disclose the number of staff affected in the US, where it had hired about 160 people; VinFast managers were told to prep for a potential 30% headcount reduction at its headquarters in Vietnam.

Instill AI raises US$3.6M seed funding to make AI more accessible
The investors include RTP Global, Lunar Ventures, and Hive Ventures; Instill AI will use this seed fund fuel to boost the development of the unstructured data ML infrastructure.

Singapore 3D design startup PixCap scores US$2.8M
The investors include Sequoia Surge, Cocoon Capital, and EF; PixCap allows users with no 3D experience to find, edit and export 3D content, including images for graphic designs and animations for landing pages and social media.

SG kidtech firm myFirst bags US$2.2M seed round
The investors are tech founders and executives from PatSnap, Google, Rainforest, and TNB Aura; myFirst aims to help kids aged between three and 12 stay connected socially without the usual ills of social media.

Building energy management startup Ampotech raises US$1.3M
The investors are Earth VC, KSL Maritime Ventures, Silicon Solution Ventures and SEEDS Capital; Ampotech uses the IoT and edge computing to help energy, operations, and facilities managers improve the performance of their buildings.

GoTo announces management reshuffle
Co-founder Kevin Aluwi has stepped down from its board of commissioners; Anthony Wijaya will also step down from the board of directors to focus more on his role as Tokopedia COO.

Shariah-compliant Malaysian digital insurer OUCH! secures funding
Following the investment, Ouch! will look to acquire the final approval from Malaysia’s central bank BNM operate in its regulatory sandbox; Its mission is to become Malaysia’s first digital Takaful operator.

Binance to temporarily halt US dollar bank transfers
It said the suspension will only affect users of Binance.com, which is a separate entity from Binance US; CNBC reported that millions of stablecoins went to rival exchanges after the announcement.

‘ID is recession-resilient due to its demographic bonus, rich natural resources’
Indonesians have an entrepreneurial mindset, and its digital-savvy young population fuels the country’s digital economy growth, says Nobutake Suzuki, President and CEO at MUFG Innovation Partners.

Always be adventurous and inquisitive: Carl Jones of SAP Concur
The Managing Director for SEA at SAP Concur talks about risks he took with his career in his 20s and 30s and how they have played out.

Boardrooms to warehouses: How SEA leaders can build cyber resiliency from top-down
Southeast Asian business community needs to better understand cyber security’s benefits on long-term business

Unlocking the potential of SEA with accessible credit
With 70 per cent of the adult population in SEA still underbanked or unbanked, it still has a long way to go before it goes truly cashless.

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The TOP100 programme, created by e27 to provide early-stage startups with access to a platform that facilitates connections for partnerships, funding opportunities, and more in the Asia Pacific, returns this year.

Since its inception, the TOP100 pitching competition has brought the best-in-class early-stage startups to showcase and pitch onstage across various cities in Southeast Asia.

Past winners and participants include 99.co, Softinn, and Carousell.

After a three-year hiatus, the 2023 programme will evolve and leverage on e27’s Pro Connect platform, which has powered close to 20,000 online connections between startups and investors since 2020.

The 2023 TOP100 programme and meetups will adopt a hybrid format of conducting the application and scoring online while retaining an element of evening networking offline in major Southeast Asia cities.

Two key updates would include a special category for disaster tech (D-Tech) solutions as partnered and supported by Prudence Foundation’s SAFE STEPS D-Tech Awards, and the second being the inclusion of Web3.0 startups, particularly projects targeting Web2.0 tech companies as their users or customers.

Also Read: Sarawak shows off startup scene in final TOP100 stop

Thaddeus Koh, Co-Founder of e27, said: “Expanding our reach beyond key cities, TOP100’s decision to conduct the initial pitching and showcase elements online opens up a world of opportunities for startups across Asia. This shift allows us to showcase a wider range of innovation and technology and provide resources and fundraising opportunities to startups that may have been previously out of reach. We’re excited to bring the spotlight to startups from all corners of the region and highlight their solutions to the world.”

Throughout the selection period, all TOP100 participants will have e27 Pro Connect access, which allows them to connect with and pitch to 500+ verified investors on the e27 platform.

From the participants, 100 best-in-class startups will be selected to showcase at Echelon Asia Summit 2023 to exhibit in the TOP100 section and pitch in the crowd-favourite TOP100 Stage. Many will proceed to raise additional rounds of funding in the next 18 months to achieve their growth-stage status.

“TOP100 has always been a programme that facilitates startups’ connections with stakeholders who can best help their business. By giving the participants access to e27 Pro Connect and showcasing the semi-finalists during Echelon, we aim to help kickstart and boost their fundraising journey,” said Koh.

Interested startups can first apply through the TOP100 website.

Echelon Asia Summit is bringing together APAC’s leading startups, corporates, policymakers, industry leaders, and investors to Singapore. The conference is scheduled from 14-15 June in Singapore. In 2023, the two-day conference is expected to draw in crowds of over 5,000 to discuss the latest in innovation, entrepreneurship, funding and more.

Echelon Asia Summit is e27’s flagship tech conference, bringing APAC’s startup ecosystem together to gain insights, build connections and meet talent from all over Asia. Explore how startups, investors, corporates and government bodies work together across borders to tackle similar challenges and pressing issues and empower the larger ecosystem to build the Future of Asia. Gather meaningful insights from industry leaders and stakeholders through stage discussions; build connections within the industry with over 300 exhibition booths. As Asia’s leading platform for tech startups and investments for 13 years now, Echelon Asia Summit will take on cross-border engagements, talent growth, and showcasing APAC’s emerging and leading companies from the heart of Singapore.

Founded in 2007, e27 has a strong mandate to give all entrepreneurs a winning chance to succeed, providing them with relevant tools and resources to build and scale their companies in Asia’s tech ecosystem. e27 provides a go-to platform for connections, insights, funding, and more — everything you need to build a billion-dollar company.

For media queries, please contact The Echelon Team.

Email: echelon@e27.co

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SEA is one of the fastest-growing regions in the world, with a population of over 650 million people and a GDP of US$3.3 trillion in 2021, which corresponds to 3.4 per cent of the global GDP. It is projected that by 2025, digital financial services will generate around US$38 billion. This accounts for 11 per cent of the entire financial services industry.

Waking an economic sleeping giant

But upon closer look, a massive potential in Southeast Asia (SEA) still remains untapped. The forecast shows that SEA, in 2025, has a full revenue potential of US$60 billion, around 58 per cent more than the expected revenue potential of US$38 billion.

The latest figures show that SEA still has ways before it reaches a truly cashless, all-digital, and accessible financial environment. 70 per cent of the adult population in the region remains either “underbanked” or “unbanked”.

To reach this potential, national governments must facilitate in release and implementation of strong and supportive regulatory policies and frameworks for digital financial services players.

Also Read: How technology has revolutionised operational efficiency in consumer finance

This untapped and massive digitalisation and financial inclusion potential can be further accelerated by bridging the gap between public and accessible retail credit. This is especially applicable to emerging SEA markets such as the Philippines.

Bridging the credit gap

Despite 90 per cent of Filipinos owning a smartphone with mobile internet, the Philippines has generally been a cash-centric society. Based on a study by McKinsey, only two per cent of Filipinos used credit cards.  An archipelago with over 7,000 islands, the country had suffered from limited accessibility from conventional, paper-based payment infrastructures.

This all changed during the pandemic, which jumpstarted the digitalisation journey and changed Filipinos’ behaviours forever: they created and transacted using e-wallets, purchased goods and services on e-commerce websites, and started saving their hard-earned money in digital banks.

Based on the 2021 Financial Inclusion Survey conducted by the Philippines’ central bank, formal account owners nearly doubled from 2019 to 2021 with 29 per cent and 56 per cent, respectively.

The pandemic may have paved the way towards digitalisation, yet four out of 10 Filipinos remain sceptical about the safety of online banking. From the same survey, what is interesting to note is that from 19 per cent in 2019, there was only a minor increase to 25 per cent for formal credit. In the country, informal credit has culturally been more popular than formal credit, wherein borrowers would seek credit from family and friends and informal loan providers.

Regarding formal credit, traditional or digital banks only ranked among institutions at a meagre four per cent in 2021. An insight in the same survey showed that informal credit sources were preferred due to their relative convenience, as little to no documents were required. Despite the need for quick credit, borrowers found the process in banks tedious, preferring informal credit sources that can disburse funds attached with higher interest rates.

This thought process is prevalent not just in the Philippines but across SEA. 2021 figures collated from World Bank, Euromonitor, Global Data, Bain, and Temasek reveal that consumer credit in the region, as a percentage of GDP, is at 13 per cent vis-à-vis to the US benchmark of 24 per cent of the US.

Building the road to credit inclusion

With online transactions ramping up exponentially because of the massive popularity of e-commerce and e-wallets, more users will become aware and interested in the plethora of financial services available. It is only a matter of time before accessible and digital credit becomes the preferred way for customers moving forward.

Governments across the region are becoming more supportive, with innovations such as a national and standardised QR code for mobile payment, digital bank licenses now being offered and granted, and national ID systems. Regulators, after seeing the success of digital financial services players in their shared vision of the digitalisation of the banking industry.

Also Read: ‘Neobanks can create a better digital CX by leveraging AI, blockchain’: banco CEO

Digital financial service providers must gain the public’s trust and confidence by ensuring all steps in the customer’s journey must be quick without sacrificing security and confidentiality. A company I co-founded, Singapore-based FLOW, was instrumental in redefining credit management by using professional, ethical, and highly efficient practices.

At present, we at Tonik are leading the way in driving financial freedom in the region. We provide Filipino customers a market-competitive, highly secure, and bespoke all-digital credit product range. In doing this, we empower Filipinos to use their available credit for various purposes, whether for their dream purchases and experiences, home improvements, or tuition fees, among others.

The sky is the limit when opportunities that are accessible, quick, and secure are presented.

By harnessing top-line and innovative technology with world-class fintech vendors, digital financial service providers can disrupt and change how people view money. What was once a far-fetched dream is now rapidly turning into reality. No longer are people confined to working for money; now, money works for us in pursuing our plans, goals, and dreams.  That is what true financial freedom is all about.

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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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Singapore-based SwipeRx, which owns and operates an online pharmacy platform in Southeast Asia, has secured US$10 million in a Series B extension round.

Global pharma company Sanofi’s Global Health Unit and Cercano Management (formerly Vulcan Capital, launched by Microsoft co-founder Paul Allen) invested in this round.

Existing investors SIG, Johnson & Johnson, and Patamar Capital also participated.

With the fresh funds, SwipeRx will expand its B2B commerce platform for the pharmaceutical industry in key markets. It will also invest in specialised healthcare logistics and financing, grow its pharmacy network in these markets and strengthen its advanced data teams.

Also Read: Where is Southeast Asia’s digital healthcare headed?

SwipeRx is a digital community for pharmacy professionals with an all-in-one B2B commerce capability. It provides the digital tools and information they need to serve patients better and manage their pharmacies.

Its digital network has over 250,000 professionals and 50,000 pharmacies. It works with leading pharmaceutical companies, governments and NGOs to connect the entire pharmaceutical ecosystem.

Indonesia is its largest market, with over 12,000 retail pharmacies (a quarter of all pharmacies in the country) SwipeRx. About 8,000 of them are also on its B2B commerce platform.

In addition, SwipeRx recently launched a new point of sale and inventory management system that has onboarded over 1,000 pharmacies in Indonesia.

In May 2022, SwipeRx raised a US$27 million Series B round led by Indonesia’s MDI Ventures with participation from Bill & Melinda Gates Foundation, Johnson & Johnson Impact Ventures, and SIG.

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Late last month, Japanese conglomerate Mitsubishi UFJ Financial Group’s subsidiaries, MUFG Innovation Partners and MUFG Bank, established a US$100-million fund in partnership with Indonesia’s commercial bank Danamon.

Called MUFG Innovation Partners Garuda No. 1 Limited Investment Partnership, the fund aims to make strategic investments in local startups that have synergies with Danamon.

“We see Indonesia as one of the best attractive markets for tech investments in Southeast Asia or globally,” says Nobutake Suzuki, President and CEO at MUFG Innovation Partners.

e27 caught up with him to learn more about the new fund, its thesis, plans, and how the Indonesian startup ecosystem survives the current crisis.

Edited excerpts:

What are the key objectives of the fund? How can the fund act as a bridge between Japanese and Indonesian startups?

The key objective of the fund is to invest in startups that can collaborate with MUFG, particularly Bank Danamon. Startups can leverage Bank Danamon’s and MUFG’s assets and networks to grow, through which they would like to grow together.

Also Read: MUFG partners with Danamon to launch US$100M startup fund in Indonesia

We are not particularly missioned to act as a bridge between Japanese and Indonesian startups.

Can you share the investment thesis, ticket-size details, and focus verticals? Have you identified any startups for investment?

We are mainly looking at Series A or above companies with a first cheque size of US$3-5 million. We look for startups in lending, payment, wealth management, marketplace, vertical solution for embedded finance, SaaS/enablers, and ESG.

We have already started conversations with local startups.

How many startups does Garuda No.1 plan to invest in from this fund? Will it consider only startups that have synergies with Danamon?

It is still subject to change due to unforeseeable market conditions, but in principle, we would like to invest in around 15 companies in the next three to four years.

And yes, the synergy with Danamon is considered the prerequisite to investing in startups. It’s not limited to immediate short-term but mid- to long-term synergy.

What opportunities do you see for this fund in Indonesia? How will Garuda No. 1 address the funding gap (due to the winter)?

We see Indonesia as one of the best attractive markets for tech investments in Southeast Asia or globally. It is a high-growth market from a macroeconomic perspective.

At the same time, we cannot forget about the entrepreneurial mindset of people and the digital-savvy young population that fuels the digital economy growth.

We are not particularly designed to be created to address the current funding gap in Indonesia. Still, hopefully, our US$100 million Indonesian-focused fund can act as a catalyst for investors to be confident again and invest more in the market. Also, we aim to bring strategic value to the market other than capital.

How does the overall startup market in Indonesia performing in the recession? Are growth-stage startups struggling to raise follow-on funding? How do they cope with the situation?

We have started seeing the funding gap, especially in the growth to later stages. At the same time, activities in the early stage are surprisingly still vibrant in Indonesia.

In terms of the macro-economy, Indonesia is recession-resilient thanks to its demographic bonus and rich natural resources. These factors will especially give an advantage in this cost-push inflation world.

We believe Indonesia’s overall startup market appreciates these natural macroeconomic advantages and is better positioned to grow further than the startups in the other SEA markets.

Also Read: Mitsubishi arm injects US$200M investment into digital finance platform Akulaku

The funding winter, of course, is a hard time for everyone. However, it would also bring new opportunities for the startups, such as less competition, better hiring, and more time to focus on core product development and refinement. The startups surviving this winter must be stronger than ever before, and hopefully, we can back them up to weather the storm and emerge stronger together.

Given the current situation, will more Japanese companies and funds look to enter Southeast Asia, especially Indonesia?

Southeast Asia as a whole, or Indonesia in particular, are the fastest-growing economic centre in the world which naturally attracts investments and investors from all around the world. We are not in a position to talk about overall Japanese investors’ trends, but for MUFG, we have been actively investing in Southeast Asia and Indonesia.

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Fundraising or preparing your startup for fundraising? Build your investor network, search from 400+ SEA investors on e27, and get connected or get insights regarding fundraising. Try e27 Pro for free today.

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In its recent report on the state of Southeast Asian (SEA) fintech companies, Robocash Group revealed that alternative lending and payments were two of the most dominating categories of fintech services in SEA and South Asia in 2022.

The report was based on the data gleaned from analysing the number of fintech companies operating in various countries in the region: India (541 companies or 43.1 per cent), followed by Indonesia (165 companies or 13.2 per cent), Singapore (162 companies or 12.9 per cent), the Philippines (125 companies or 10 per cent), Malaysia (84 companies or 6.7 per cent), Vietnam (78 companies or 6.2 per cent), Pakistan (51 companies or 4.1 per cent), Sri Lanka (27 companies or 2.2 per cent), with the smallest being Bangladesh (21 companies or 1.7 per cent).

Based on the data, the largest number of companies are focused on the Alternative Lending sector (544 companies or 43.4 per cent), followed by Payments & Transfers (496 companies or 39.6 per cent), E-Wallets (118 companies or 9.4 per cent), with the smallest being Digital banking (96 companies or 7.7 per cent).

It also highlighted the progression of fintech industry in the region based on the sheer number of companies operating: As of the end of 2022, there are 1,287 companies in the nine countries and four sectors studied, of which 1,254 (15.4 per cent of the total number of total active fintech companies, not just the four sectors under consideration) have the status of not Undefined (lacking data from the open sources).

“In the period from 2000 to 2022, the total number of companies increased by 3,588 per cent – from 34 to 1,254. The largest increase occurred in the period from 2015 to 2020, which marked the foundation of approx. 62 per cent of all existing companies from the four sectors under consideration,” the report stated.

Also Read: Understanding the role of fintech, blockchain in transitioning to net zero

On raising money and making revenue

In addition to looking at the number of companies operating in the region and the funding that they had raised in the past years, the report also looked at other factors, such as earnings, to determine the state of the fintech industry.

It evaluated the amount of funds raised for the entire period from the date of the company’s foundation to December 31, 2022 and the amount of revenue made in 2021.

“The volume of revenue will be perceived by us as the volume of transactions related to the primary activity of the company,” the report explained.

“Over the entire history, fintechs in the four studied sectors have raised a grand total of US$53.3 billion and earned US$17.8 billion. Roughly speaking, their total rate of return (Total Revenue / Total Funding) is approximately 33.4 per cent, which means that for every dollar attracted, fintechs earn an average of 33.4 cents per year on transactions related to their activities,” it continued.

As the country with the most amount of funding raised with US$25.6 billion (48 per cent), India tops the list of the countries with most earning with US$10 billion (57.2 per cent) in 2021, followed by Indonesia with US$2.4 billion (13.7 per cent), Singapore with US$1.9 billion (10.6 per cent).

Also Read: Grooming local fintech talent at Airwallex

“However, in terms of return on investment (Total Revenue / Total Funding), the most effective country is, oddly enough, Bangladesh (7840.9 per cent), then Pakistan (686.4 per cent),” the report stressed.

In SEA, Vietnam tops the list (117.6 per cent) followed by Indonesia (68.7 per cent) and Malaysia (48.5 per cent).

“Such extreme values in the first two countries (Bangladesh and Pakistan) are due to near-zero fundraising rates, while their revenue level is still below the SEA average,” the report closes.

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Singapore-based Tazapay, a fintech company specialising in cross-border payments, has received US$16.9 million in its Series A funding round led by Sequoia Capital.

EscapeVelocity, PayPal Alumni Fund, Gokul Rajaram, Foundamental, January Capital, RTP Global, and Saison Capital also participated.

Tazapay will utilise the money to scale its business across Asia and expand in other key regions, such as the Middle East and Europe. This includes the application of payment licenses in major markets that will broaden Tazapay’s payment network globally.

Also Read: Tazapay snags US$3.2M to expand cross-border SMB commerce platform in Southeast Asia

The startup will also improve its core capabilities and add more local payment methods.

Tazapay enables companies to do cross-border payments. It provides checkout, payment links, and escrow solutions to simplify international transactions and help reduce the risk for buyers and sellers online.

The firm has card coverage in over 170 markets and local payments collection coverage in 85 markets. This allows businesses to accept low-cost and secure payments from their customers without having to create local entities everywhere.

The company plans to expand its real-time local collection channels to above 100 by year-end. It serves enterprises across cross-border e-commerce, edutech, SaaS, and travel.

Its customers include IndiaMART, BrightCHAMPS, WTX, Rezlive, and Advantage Club. In addition, Tazapay has also partnered with Standard Chartered to offer innovative commerce-enabling payment solutions for enterprise marketplaces.

In March 2021, Tazapay secured US$1.75 million on top of its original round of funding of US$3.2 million announced in early 2021.

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Dr Carl Jones is Managing Director (Southeast Asia) at SAP Concur. He leads a multinational cross-functional team with sales, pre-sales, client success and cloud channel partnerships, ensuring alignment for strategic projects within SAP Concur.

An industry veteran, Jones has held various regional leadership roles in Asia Pacific countries, including Singapore and Thailand. He has 20 years of experience in Asia’s travel and payments industry.

Jones is a regular contributor of articles for e27 (you can read his thought leadership articles here).

In this candid interview, he talks about his personal and professional life.

How would you explain what you do to a five-year-old?

Imagine going to a park with your aunt, and she wants to have some ice cream with you, but she forgot her purse. So, you pay for the ice cream first with your pocket money and expect her to pay you back.

Similarly, I ensure employees get their money back when they go somewhere for work and pay for work-related things.

Note: SAP Concur helps companies manage travel, expense, and invoicing.

What has been the biggest highlight/challenge of your career so far?

My biggest challenge was managing the business through the pandemic and maintaining our business when travel almost completely stopped. It was tough seeing colleagues around the industry, particularly the travel industry, being heavily impacted. Thankfully, I stayed focused and kept my spirits up to motivate the people around us.

Also Read: Being a first-class listener will serve you best: Jon Howard of Bud Communications

How do you envision the next five years of your career?

I’m fortunate and excited to work at SAP, which gives employees various career options to explore and grow in different roles. For the next five years, I hope to continue to grow as an individual and maintain success for the team I represent and the company.

What are some of your favourite work tools?

I must admit that I didn’t initially appreciate Microsoft Teams when the pandemic struck, but I now love it despite its one or two shortcomings. What I’ve enjoyed most about Teams is its ability to allow us to strike a balance between virtual and hybrid work arrangements. Technology has enabled us to blur the lines between working from home and working from the office, which is very useful.

When I travel, I use Concur TripIt. It is my favourite work tool because it keeps me up-to-date in terms of itinerary changes. It’s especially handy when I am overseas.

What’s something about you or your job that would surprise us?

Most people are surprised to hear that I have been to nearly 100 countries. This includes North Korea. That was a personal trip back in 2005 when I travelled there to watch the World Cup qualifying match between North Korea and Iran.

However, the match was moved to Bangkok at the very last moment. I didn’t manage to catch the game live, but I did spend ten days in North Korea, across various locations and landmarks. It was fascinating.

Do you prefer WFH or WFO, or hybrid?

Hybrid. I love the flexibility hybrid gives me in my role — partly because I have many calls during unsocial hours, such as late at night and when I travel. I like the fact that hybrid has now extended to conferences and webinars, too, meaning in-person and virtual together. 

SAP Concur held many online conferences during the pandemic, and we are now running events in a hybrid fashion, where people can choose to attend physically or remotely. Technology has advanced so much in the last couple of years to allow this to be still effective.

What would you tell your younger self?

Always be adventurous and inquisitive. I am where I am because I took risks with my career in my 20s and 30s. For instance, moving overseas from the UK in my late 20s was a risk that I took. I ended up in Asia because I got a one-way ticket to Hong Kong with no firm plans, job, etc.

Also Read: Be hungrier and bolder to explore a variety of industries: Sharina Khan of Thoughtworks

From there, I ended up living in China and stayed there for a year, studying the Chinese language. I didn’t know how things would pan out because there wasn’t a plan, but I followed my passion. I did what I wanted to do, and I have been very fortunate with how they have played out.

Can you describe yourself in three words?

Energetic, resilient, and, I hope, fun!

What are you most likely to be doing if not working?

Ideally, hanging out with my wife and dog, Pinot. Pinot is a Singapore special. My wife and I got her from Singapore Action for Dogs four years ago. She was only three months old when she was found on the streets as a stray in Jurong.

We adopted her, and she’s beautiful! I also like to travel with my wife; we just returned from Croatia, having spent a week on a sailboat in the Croatian Islands, which was fantastic!

What are you currently reading/listening to/watching?

I’m currently reading a book titled On Roads that Echo by Charlie Walker, where the author penned his adventures in cycling across Asia and Africa. He spent four years cycling around the world because he wanted to see the world, and I find it inspiring.

I’m a cyclist, too, and a budding adventurer. I cycled 1,600km from Laos to Cambodia a few years ago for three weeks. I aspire to be like Charlie Walker and would like to bike around the world when I retire, particularly the Andes.

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