Investing is a way to grow wealth over time, beat inflation, and achieve financial goals such as saving for retirement, generating passive income or funding their children’s education. However, it can be a daunting task, especially for those who are new to the market or for those who are investing in a new asset class like cryptocurrency, even more so when investing comes with risks.

In early March 2023, the finance industry was shaken when three major banks, Silvergate, Signature Bank and Silicon Valley Bank (SVB) announced that they will be shutting down due to the liquidity crisis. Billions of deposits were withdrawn causing bank runs across the three key players, and chaos in the broader market.

Later in the same month, Credit Suisse, the second-largest bank in Switzerland faced a collapse and was acquired by its rival UBS for three billion Swiss francs. This event occurred after Credit Suisse had been involved in several scandals, including a spying scandal, the failure of two investment funds, and a revolving door of executives.

Failure of these recent financial institutions, which are integral to the industry, had a ripple effect on the global financial system. This also greatly highlighted the importance of understanding how such risk dynamics can impact investors and their portfolio exposure, serving as a reminder of the significance of diversification in investment strategy.

History of bank runs

A bank run occurs when a large number of customers withdraw their deposits from a bank, typically due to concerns about the bank’s solvency or stability. The fear of the bank’s failure can quickly spread among customers, leading to a rush of withdrawals that can ultimately cause the bank to run out of cash and be insolvent.

More than a decade prior to the unfortunate collapse of Silvergate, Signature Bank and SVB, Bear Stearns, a bank that relied heavily on short-maturity bonds to finance long-term investments, faced a bank run in 2008. Its industry rivals launched a public campaign against Bear Stearns, claiming it was unable to meet its obligations. This resulted in the bank’s capital base plummeting from US$17 billion to US$2 billion, leading to its bankruptcy filing. This event triggered the failure of 25 other banks including Washington Mutual and IndyMac.

Also Read: Bear market survival for crypto projects: Strategies for keeping your project alive

Another high-profile bank run happened in the 1930s, also known as the Great Depression when the banking system faced bank runs due to its high level of leverage and riskier loans. The crash of the stock market in 1929 led to banks being unable to meet their customer’s demands, causing widespread bank failures and a massive exodus of deposits from the banking system.

The recent collapse of SVB was a swift and unprecedented event, compared to the months-long Washington Mutual failure of 2008. Social media and online banking accessibility are considered contributing factors to the current crisis, as anxious depositors quickly spread their fears through various platforms.

Experts point out that the rapid dissemination of info in the age of social media amplifies the psychological behaviour behind the Twitter-fuelled bank run, potentially leading to a viral panic that regulators may struggle to contain.

Michael Imerman, a professor at Paul Merage School of Business at the University of California-Irvine, has dubbed the SVB situation a “bank sprint” rather than a “bank run”, with social media playing a central role in its acceleration.

Is TradFi in trouble?

Recently, additional tier one (AT1) bonds have been in the spotlight due to the situation at Credit Suisse. The bank announced that, following orders from the Swiss Financial Market Supervisory Authority, the value of 16 billion Swiss francs (USD$17 billion) in AT1s would be reduced to zero. This decision is controversial, as normally shareholders should be the first ones to bear losses, followed by holders of AT1 bonds.

However, in this case, Credit Suisse shareholders will receive compensation in the form of UBS stock, while AT1 bondholders will receive nothing. This situation has created uncertainty for investors holding other banks’ AT1s, and some have raised concerns about the decision.

AT1 was introduced to increase banks’ safety buffers and reduce the risk of government bailouts following the 2008 financial crisis. These bonds are designed to convert into equity in case the lender encounters financial difficulties. The development of Bitcoin by Satoshi Nakamoto was likely influenced by the crisis, which acted as a motivation for the project. It is possible that Nakamoto had been working on Bitcoin before the crisis, but the events certainly played a significant role in his decision to create it.

In one of his 2009 posts, Nakamoto noted that traditional currency requires a great deal of trust, which is often breached in the history of fiat currencies. He highlighted the need for a decentralised currency that could eliminate the need for trust in a central authority, such as the central bank.

Given what we have seen in just the past few months where countries have stepped up on the global stage and declared their intentions to lower their dependence on the dollar. This de-dollarisation would thus be a matter of when, not if, as more and more countries realise the importance of diversifying their trust into other countries instead of placing it mainly with the US.

Does diversification matter?

Speaking of diversification, one does also have to apply the same logic to their investment portfolio. The goal of diversification is to minimise risk and maximise returns by reducing exposure to any single investment or asset class.

By diversifying a portfolio, an investor can mitigate potential losses resulting from fluctuations in the market or economic conditions that may negatively impact a particular asset or industry. One obvious trade in which everyone is hopping on the bandwagon is investments in treasuries. We see large inflows of investments into money market funds in an effort to lock in high yields that have not been seen in the past two decades.

There is no wrong with this strategy, however, one must be aware in the dependence on this trade is contingent on the US government not defaulting on its ever-increasing debt and being able to keep the dollar stable. This would obviously be a black swan event, however, how do we hedge against such immense risk? We would need something hard, something of definitely limited supply and typically gold and Bitcoin comes into mind.

According to a Yale study, Yale economist Aleh Tsyvinski says Bitcoin should occupy about six per cent of every portfolio in order to achieve optimal construction. Even those who are strong Bitcoin sceptics should maintain at least four per cent Bitcoin allocation. According to the study, Tsyvinski demonstrated that cryptocurrencies enjoy higher potential returns than other asset types despite their higher volatility.

Also Read: The regulatory war on cryptocurrency

When measuring volatility, high readings indicate greater price fluctuations with both larger gains and losses, whereas lower readings indicate more stable returns. Usually, stable returns entail less potential significant profits as investors tend to compromise high returns for stability. Cryptocurrencies have demonstrated weekly returns that are higher than stocks since 2013 and as seen in the graph below.

The suitability of diversifying in an aggressive or passive allocation is dependent on one’s risk tolerance.

Diversification is a key investment strategy that involves spreading investments across various asset classes, industries, and geographical regions.

By diversifying, professional investors can reduce their exposure to any single investment or asset class, minimising risk and maximising returns. Fintonia Group, as a licensed fund manager, has a team of experienced professionals who can provide guidance and support to investors looking to diversify their portfolios. Whether you’re new to investing or an experienced investor, we’re here to help you build a customised solution that aligns with your risk tolerance, financial goals, and investment timeline.

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For many years, it was the nature of any digital project that developers were managed by the client, like a sort of commodity. The client’s role was to instruct the developer to do whatever they saw as necessary. The competition and pricing in this approach were high, while the criteria for selection were simply “Do you have a developer with these skills, and what is the price?”

However, in recent years, there has been a move towards not only building the code but also collaborating to design the solution from a UX perspective. This shift involved developers working with their clients to identify the requirements, conduct user testing, and essentially guide the client on how to build products via the solution architecture and then implementation.

It has been quite a journey

What we saw was a transition from engineering resources to digital consultants and digital transformation drivers. It has been quite a journey. Now, efficient two-way communication is the key to a successful working relationship. According to Ark Group, 95 per cent of CEOs believe effective communication is a critical factor in any area but just 22 per cent felt it was being delivered.

Whether it was the old way or the new way, communication throughout this area can be a minefield, especially when dealing with cultural differences. In Southeast Asia, where Seven Peaks is based, an open, honest, and direct way of communicating is common, but this can be tricky from time to time.

Also Read: Cloud communication platforms: How to choose one for your business

For example, if a client or a manager is older, it’s considered rude to correct or dispute them. This can have unfavourable consequences, but at the same time, if you don’t correct someone it may reflect badly on them and ruin the relationship.

There is a delicate balance between saying what needs to be said and relaying it in such a manner that no one feels disrespected. For me, this is one of the most important things to remember, whether it is regarding internal or external communication.

What companies must remember is the specific problem they are trying to solve on behalf of their client, and that there is a combination of tech and other solutions that can accomplish this. Introducing new buzzwords because they are fashionable, or specific technology simply because it’s new, should be avoided, even if it’s something the client feels that they want.

I believe another key asset in communication is guiding clients toward what they need rather than what they want. This can be challenging, as it can lead to disagreement and debates; however, by providing the most efficient advice and always bringing them in the right direction, challenging their assumptions, and demonstrating the benefits of the course of action you’re recommending, they will eventually take your lead.

To ensure that a project goes smoothly, one of a team’s first tasks should always be to run a product discovery. This can help them to fully understand the client’s business objectives and the pain points that are to be addressed. Based on that, the team should break each element of the solution down into much smaller projects that can be completed incrementally.

This approach helps teams to solve those individual problems much faster, while the overall finished product reveals itself bit by bit. Again, this approach is about building what a client needs rather than what the client wants, as there should be zero extraneous elements on those smaller projects.

Clients and developers must work together daily throughout the project, the most effective way of communication is face-to-face, working software is the primary measure of progress, simplicity is essential, and at regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behaviour accordingly.

Leveraging on Agile methodology

Good communication and Agile methodology go hand-in-hand. For example, it states there should only be time made for the briefest of meetings to speak of prominent points, while any problems must be prioritized for completion. The Agile approach is flexible and accurate, and its team members must be the same. Using this form of effective communication, sprints can be reviewed quickly, followed by a brief, retrospective assessment to judge which innovations might have contributed the most to the project.

Also Read: What companies can do to stay agile in the future of work

Agile helps deliver value within a business as it is an efficient process compared to methodologies that came before it. Changes in planning can be accommodated easily without causing disruption. Projects can be delivered within weeks or months and quick delivery is key to client satisfaction.

Frequent interaction with clients to review progress and note suggestions is vital when delivering value. Working directly with clients to understand their needs and to be aware of any changes in the market is essential, while shorter delivery times also allow for criticisms or suggestions from users to be sought and applied quickly. This also goes a long way to helping reduce the chance of failure within the project.

Finally, I believe strong organization and solid communication can be hugely beneficial to employee morale. A recent report by McKinsey revealed companies that employ efficient internal communications policies that nurture relationships as well as growth, see a boost in productivity of up to 25 per cent.

This approach allows for creativity, innovation, and motivation within the team. A happy and energetic team is likely to be more efficient and productive. This is especially important in the age of working from home as people are in their silos, communicating often can help keep them focused.

To say “good communication drives successful projects” may sound like a no-brainer, but understanding why this is true and in what areas specific effort can reap success, can be the difference between a good outcome and a great one.

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Singapore-based programmable synthetic data company Betterdata has raised an over-subscribed seed round of US$1.65 million led by Asia-Pacific-based early-stage VC firm Investible.

Franklin Templeton, Xcel Next, Singapore University of Technology and Design, Bon Auxilium, Tenity, Plug and Play, and Entrepreneur First also joined the round.

Betterdata will use the new funding to publicly launch Betterdata’s product and enhance its technology stack, including support for single-table, multi-table, and time-series datasets. A portion of the money will go into hiring, especially sales and marketing positions for business development as the company scales.

The startup, which currently operates in Singapore, also plans to expand across Asia Pacific over the next one to two years.

Betterdata was founded in 2021 by CEO Dr Uzair Javaid and CTO Kevin Yee.

Also Read: Generative AI and inclusive branding: Are we there yet?

Increasing data protection regulations in the world make data sharing extremely slow for engineering and data science teams. Betterdata makes data sharing instant with Generative AI and Privacy Engineering by converting real data into limitless synthetic data that looks, feels, and behaves just like your real datasets.

As synthetic data is artificially generated, it does not belong to real users and can be shared globally with 100 per cent compliance with local, regional, and international privacy laws.

“Betterdata solves one of the biggest issues the AI industry is facing today: lack of high-quality data that also meet privacy requirements. Through its powerful platform, Betterdata generates synthetic data that mimics real-world data without compromising quality and privacy, helping businesses meet global compliance and privacy laws at scale,” said Khairu Rejal, Principal of Investible.

“Data protection including user privacy, consent, copyrights, and compliance are on top of minds of CISOs today. Betterdata’s GenAI models can generate synthetic data at scale in a non-bias, highly accurate, and privacy-preserving way. We believe this is, and will be essential in many business verticals as the new wave of GenAI systems become mainstream,” said K. Yu, Founding Partner, Xcel Next.

Betterdata has recently entered into two R&D partnerships with leading academic institutes in Singapore and the US. Its product is used by customers Fortune 200 firms, Public Agencies, and AI startups.

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Echelon Asia Summit 2023 brings together APAC’s leading startups, corporates, policymakers, industry leaders, and investors to Singapore this June 14-15. Learn more and get tickets here. Echelon also features the TOP100 stage, where startups can pitch to 5000+ delegates, among other benefits like connecting with investors, visibility through the platform, and other prizes. Join TOP100 here.

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Dear Pro member,

Just days after Tracxn released a report about Southeast Asia’s startup funding in 2022, Bain & Company launched its Southeast Asia Private Equity Report in 2023.

The new report also paints a bad picture: The PE market saw a slowdown in deal activity in 2022. The deal value in the region saw a 52% fall last year compared to 2021, with the deal count also declining 15% y-o-y. The activity was solid through H1 2022 before falling in H2.

The internet and tech sector saw fewer large ticket investments and lower overall activity levels in 2022 vs 2021 but still accounted for the bulk of deals done in the region, accounting for 55% of total deal volume in the region in 2022.

However, the Bain report finds that despite the near-term uncertainty, the long-term outlook for PE investment in SEA remains positive. Its analysis shows that macroeconomic conditions in the region have been more resilient than the rest of Asia Pacific.

With the market continuing to be volatile, a full recovery will likely take many more months.

In another development, global Web3 and gaming VC firm BITKRAFT announced its Asia expansion and appointed former Riot Games President and former CEO of Garena, Jin Oh, as its Asia Partner. We spoke with him soon after the launch.

Today’s Ecosystem Roundup also carries many other exciting news stories and features.

Regards.

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The gist: PE deal value plunges 52% in 2022 in SEA: Bain report
More details: Deal count also plunged 15% y-o-y; Still, SEA remains an attractive place to deploy capital in the long term as it’s more resilient compared to the rest of APAC.

The gist: Monkʼs Hill Ventures (MHV) hits final close of Fund III at US$200M
The target: The firm was originally seeking to raise US$150M for this fund, according to SEC filings.
The investments: MHV Fund III has already invested Rainforest, Upmesh, Ordinary Folk, Tigerhall, and Crowde.

The gist: DishBrain owner Cortical Labs closes US$10M financing round
The investors: Horizons Ventures, LifeX Ventures, Blackbird Ventures, In-Q-Tel, and Radar Ventures.
The company: Cortical uses clusters of lab-cultivated neurons from human stem cells to form a DishBrain that can grow, adapt, and learn faster than purely silicon-based AI.

The gist: Failed crypto firm Babel to officially start in-court restructuring
The details: Babel Finance‘s co-founder and ex-CEO Flex Yang said the company’s moratorium has been heard in Singapore court; The court has extended the creditor protection for the company to last until July 21.

The gist: Digital doc verification startup Accredify closes US$7M Series A
The investors: iGlobe Partners, SIG Venture Capital, Pavilion Capital, and Qualgro.
The plans: The startup has a presence in nine markets and eight industries and will focus on Singapore, Australia, and Japan in the coming year.

The gist: Earth VC joins US$5M Series A round of Israeli startup ITC
The company: ITC develops cutting-edge computer vision and AI/ML algorithms to predict traffic patterns and prevent traffic congestion before it accumulates.
The plans: The startup will use the capital to expand into SEA.

The gist: Bitkraft onboards ex-Garena CEO and former Temasek director
Details: Jin Oh and Jonathan Huang will lead the Asia operations
The company: Bitkraft operates four venture funds with over US$600M in AuM and has a portfolio of over 100 companies as of August 2022.

The gist: India’s startup-focused business school Mesa nets US$4.1M
The investors: Elevation Capital and angels.
The plans: To develop a “hands-on, application-based” curriculum designed in collaboration with industry leaders and the future employers of the school’s initial 60 students.

The gist: SG’s Ryde bags US$2M from Octava family office
The company: Ryde is a social carpooling service, whose services also include an e-payment platform, insurance purchases, and taxi bookings.

The gist: Seedly co-founder’s new startup Mito Health secures US$1.3M
The investors: Forge Ventures, and the founders and executives of ShopBack, Carousell, and PatSnap.
The company: Mito augments medical expertise with AI to create personalised health plans for customers based on their diagnostic results and wearable data.

The gist: SG cybersecurity firm Group-IB exits Russian market
The details: Co-founder and CEO Dmitry Volkov sold his stake in the business to its local management team; This marks the completion of Group-IB’s plan to diversify its regional business, which was announced in 2022.

The gist: Jungle Ventures names former B Capital exec Menka Sajnani as partner
The details: Before B Capital, Sajnani was with Jungle Ventures between December 2015 and August 2019 as the platform’s global head of fundraising and investor relations.

Features, guest posts, and Echelon updates

‘There is strong reaction against the P2E gaming genre’: BITKRAFT Asia Partner Jin Oh
BITKRAFT believes the already blurred lines between the physical and digital gaming worlds will disintegrate and give way to a ‘synthetic reality’, said Oh after the announcement of the company’s Asia expansion.

How AnyMind Group achieves profitability through its approach to human resource and leadership
This year, after the IPO, AnyMind Group aims to focus on increasing its profit by growing its D2C and e-commerce business more aggressively.

How Transparently.AI uses AI to detect accounting manipulation, fraud
Following its participation in Plug and Play accelerator programme, Transparently.AI is looking forward to extending its deal pipeline.

The co-working industry needs to rethink its role: The Great Room CEO
Beyond providing just seats in front of computers, they need to provide activity-based working and meeting spaces, as well as spaces for training, collaboration and learning, says Jaelle Ang.

Is ChatGPT a great invention or is it being ‘hyped’?
When using ChatGPT, we must acknowledge that we are conversing with a training machine built from a variety of heterogeneous data.

From crunching numbers to transforming data: How I made a career switch from accounting to tech
Data analyst Clarence Tan says switching from accounting to tech was the best decision he has made; It provided him with more opportunities and helped him significantly grow his skills.

Championing disaster tech, meet Prudence Foundation at Echelon!
Get to know Prudence Foundation as they gather the most exciting startups working on disaster tech at the Echelon Asia Summit 2023!

Ditch your other plans and Meetup with us in Singapore
The Singapore stop of e27’s regional meetups is happening today, 21 April 2023. Here’s why you should be there.

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Singapore-based Oyika, a battery swapping service for electric vehicles, has secured Series B funding, says a TechInAsia report citing Venturecap Insights.

BPIN Investment led the round. BPIN is the investment arm of Thailand’s Banpu Infernegy.

Co-Founded by CEO Jinsi Lee and the team, Oyika works with existing e-motorbike/scooter manufacturers and transforms their internal combustion engine (ICE) models into smart bikes by bundling them with its portable swap batteries, network of swap stations and mobile app.

Also Read: How Oyika helps tackle global warming through its power subscription plan bundled with e-motorbike

The brains behind Oyika are the ones who built Postkid, an online education startup of the early 2000s, which was sold to Mainboard-listed Horizon Education and Technologies. Lee previously worked for the Sunseap Group and championed a 10-megawatt solar farm in Cambodia and a 140-megawatt solar farm in India.

Oyika’s subscription plan is akin to a telecom plan in Singapore; you get a data plan that comes with a mobile phone — you can’t have a mobile phone without a data plan, or a data plan without a mobile phone. A rider with a pay-per-use,  prepaid weekly, or postpaid monthly plan can swap his/her depleted battery for a fully-charged one at an Oyika swap station within a minute.

The battery is brand-agnostic and works with most e-motorbike brands and models in Southeast Asia. The battery is Internet of Things-enabled, so it can be monitored remotely for optimal performance and safety. A stolen e-motorbike can be tracked and remotely switched off, effectively making it theft-proof.

In 2021, Oyika raised investment from Yinson Holdings’s green technologies division (YGT).

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Echelon Asia Summit 2023 brings together APAC’s leading startups, corporates, policymakers, industry leaders, and investors to Singapore this June 14-15. Learn more and get tickets here. Echelon also features the TOP100 stage, where startups can pitch to 5000+ delegates, among other benefits like connecting with investors, visibility through the platform, and other prizes. Join TOP100 here.

The post Battery swapping service for EVs Oyika scores Series B financing appeared first on e27.