e27 has been dedicated to nurturing a supportive ecosystem for entrepreneurs since its inception. Our Contributor Programme offers a platform for sharing unique insights.

As part of our newly introduced ‘Contributor Spotlight’, we shine a weekly spotlight on an outstanding contributor and dive into the vastness of their knowledge and expertise.

In this episode, we feature Darryl Dickens, Founder of Out-Position, a company specialising in positioning and Category Design for tech startups, innovators, and growth-oriented enterprises.

Dickens shares his personal and professional journey in this episode of Contributor Spotlight.

The driving force

A valued contributor, Dickens joined us in April with his debut article. Since then, his contributions have garnered over 4,000 views. His motivation as an e27 contributor is based on his desire to be a part of a thriving startup community.

“I like the e27 community feel and wanted to participate in it. It’s been a really good experience! It feels good to be part of this tribe,” he expressed.

Also Read: How Category Design drives productivity and efficiency

How it all began

Dickens, a former corporate executive, held leadership positions in marketing at both regional and global levels, including a tenure as CMO for a Nasdaq-listed company. His career also included participation in several major acquisitions before he ventured into entrepreneurship, establishing his own company five years ago.

Currently, he collaborates with two or three promising startups annually, working alongside those genuinely committed to establishing a legendary category and company.

The category is the strategy

Dickens’s primary areas of expertise and passion for facilitating this goal include crafting compelling points of view, implementing Category Design, and devising ecosystem strategy and optimisation.

“An increasing number of executives are recognising the pivotal role of their category in achieving overall success. They understand that they have the ability to shape the market and category in their favour,” he said.

Advice for budding thought leaders

Dickens advises, “Read a ton, write regularly, and trust your ability to create something novel and useful for others to read.”

Also Read: Mind the category curve: Are you driving it or will it drive right over you?

Juggling too many things?

Dickens wishes he had known what he knows today during his corporate career! During his off-duty hours, he seeks solace in remote settings where he enjoys activities such as surfing, kayaking, and diving.

“You have to unplug sometimes, exercise and meditate regularly, and spend time with friends and family,” Dickens emphasizes. “This not only enhances your productivity and perspective but also makes you more effective at work.”

Staying in the loop

To stay well-informed, Dickens primarily leverages his personal network and maintains regular interactions with startups and their leadership. He recommends reading the book Play Bigger and visiting out-position.com for a more comprehensive exploration of Category Design.

“Your business and company will always be in a category, so either you define it, or someone else will,” Dickens asserts. “To achieve this, it’s crucial to have a compelling point of view, emphasizing the problem you are addressing rather than leading with your product or company description.”

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In this article, we explore a key theme in Southeast Asia innovation today: embedded finance and its implications for startups in the region.

While the past decade of Southeast Asia’s digital economy was driven by this concept of the “marketplace”, the next decade will arguably be driven by digital finance.

Whereas before, it was all about a meeting of offline supply and demand orchestrated online, moving forward, it will be about ensuring the continued cash flow underlying this supply and demand movement.

How will suppliers be able to keep up with demand for their products, given the speed of digital transactions? How will demand continue to be retained (i.e., their wallets/accounts) on various platforms and continue to be engaged in these consumer experiences?

Fintech revenues, funding on the rise, and embedded finance at the heart of it

Already, we see that venture funding in the last six to eight quarters (post-pandemic), save one, saw finance taking on more funding than commerce or consumer verticals.

But when it comes to revenues, globally, fintechs represent less than two per cent of annual financial services.

This is rapidly changing, however, with revenues projected to grow more than sixfold from 2021 to 2030 to reach US$1.5 trillion. The growth will be concentrated in North America and APAC, with the latter projected to grow 8.5X in revenues. At the heart of it are B2B and B2B2X fintechs, projected to grow 11x and 7.5x to 440B and 285B revenues, respectively.

Also Read: Bridging the gender gap and boosting women entrepreneurship with embedded finance

In Southeast Asia alone, fintechs facilitate over US$320B in transaction value (digital payments, digital capital raising, neobanking) and generate over US$6B in revenue. This aligns with Indonesia seeing fintech growth going from 51 in 2011 to 334 in 2022. Even amidst the funding winter in 2022, VC investments in Singaporean fintech startups reached a peak of US$2.31 billion, up 13 per cent from a year ago.

Open finance and financing innovation: Democratising data and infrastructure

Over the past decade in Southeast Asia, fintechs were developed in response to specific needs, especially around payments (from the customer’s POV) and monetisation (from the fintech’s POV). This eventually expanded to what is called the “unbundling of the bank”.

While this grew the fintech industry in the region, fintechs have remained largely fragmented across markets, applications, and customer journeys. These products have also largely been standalone or plugged into other platforms as separate.

But in recent years, there have been two key developments shifting the way fintechs are being built and approach growth.

First is the emergence of open finance and API/infrastructure adoption across all types of businesses, from SMEs to banks and FIs.

There are companies like open finance pioneer Brankas that have been democratising aggregated API solutions and financial infrastructure access. This enables financial services to be embedded in customer journeys like transportation and healthcare. It also enables more secure and transparent data access and sharing for banks and FIs as they offer new products or partner with other companies to do so.

Regional fintech group Fazz has also been making financial services more accessible to businesses, enabling a wide range of capabilities from linkages to Singapore’s payment system and the issuance of Visa cards for customers to payments with digital assets.

What makes Fazz’s approach more interesting is the group also offers products around business operations management for Indonesian clients, which strengthens their financial service propositions around invoice and purchase order financing.

This marriage of business operations management with financial services leads to the second key development: new forms of data workflows powering financial services.

This is most applicable in business financing, where you have fintechs developing novel approaches to underwriting un-collateralised loans. AwanTunai in Indonesia uses supply chain data through their proprietary ERP system, powering their customer’s backend operations.

First Circle in the Philippines has used revolving invoice financing to make capital more accessible to businesses across different ARR segments (with corresponding lending limits).

Impact of embedded finance on startups in Southeast Asia

The confluence of key data and infrastructure access being developed by fintechs like the ones we’ve mentioned above has meant that the barriers to consolidating fintech use cases and plugging them into digital experiences have gone significantly lower.

For example, Verihubs has tallied around 70 per cent cost reduction on average when it comes to their AI-powered verification solutions, which have largely served financial institutions and fintechs in their KYC processes.

This will impact the way startups (not just fintechs) are built in three ways:

Lower cost to build owned financial services integrated into customer journeys from day one

We’ve seen this with the likes of Carro, with Genie Finance being one of the earliest auxiliary businesses set up. The used car platform’s financing and insurance businesses tie into their AI/ML capabilities as well, for example, through distance-based and behavioural-based insurance premiums.

Also Read: Mergers and acquisitions: Key to building an embedded finance ecosystem

Proptech Pinhome has done this to great effect as well, as CEO Dayu Dara Permata describes on our latest podcast with them:

“Mortgage entry points that are attached to the brokerage home-search journey are right there in the listing…Agent invoice financing is attached to the home transaction that the agent is facilitating. And last but not least, primary project financing is also attached to the developer onboarding journey.”

For Pinhome, in particular, the nature of its ecosystem has allowed it to leverage financial services to retain partners on the supply and intermediary sides of the business.

Clearer pathways to rebuilding the banking stack for personal finance

In a podcast last year, Ajaib CEO Anderson Sumarli talked about how the lines between saving and investing have been blurring. Embedded finance is not only enabling fintech services to be embedded into commerce transactions but also into other fintech services as well. Ajaib’s platform, for example, enables investing in several different asset classes.

Flip’s money transfer platform in Indonesia, especially for small businesses, enables payments for a single business to all its stakeholders: suppliers, employees, and customers. As Flip COO Gita Prihanto shares on our podcast: “Micropreneurs are people who either have home businesses or small businesses as their core income or have another business on the side. And they like to use Flip to make payments to their suppliers and to their employees. Sometimes, they ask their customers to send money through Flip.”

Tonik, on the other hand, has recently launched an insurance product tied to its loans in partnership with Sun Life Grepa Financial.

The Philippine digital bank has also developed ways to “embed” repayments for loans in different channels, as CEO Greg Krasnov describes on our podcast:

“We’re currently working on an additional way for the customers to top up their account and repay the loans specifically, which is Tonik as a biller…We also have a product, our Flex Loan, which makes it super easy for the customer. If they have a salary account, all they have to do is just activate their debit card with us, and we’ll just charge the debit card monthly for them. And then they don’t even have to think; it’s just automatic.”

More fintechs for industry enablers to partner with for financing

This is especially applicable to agriculture, fisheries, and aquaculture.

Indonesian upstream agritech Elevarm provides on-farm facilities for their farmers to access affordable insurance and financing through a pay-later system.

For fisheries startup FishLog, financing has been instrumental in enabling local fish manufacturers to export their goods globally, for example, to the US (the biggest importer from Indonesia) by accessing invoice financing through fintech partnerships. As CEO Bayu Anggara shares on our podcast:

“We help the fishermen to get financing from third-party financing partners that we have. Last year, we disbursed almost US$3 million in financing to the fishermen, connecting them directly with third-party financing partners, including those through our platform…”

What’s the catch of embedded finance?

From products embedded throughout customer journeys to the fintech products embedded within fintech ecosystems and greater access to financial services through embedded partnerships, fintech is indeed increasingly becoming everywhere.

But it is not without risk. A key question moving forward is, what are the risks with embedded finance’s rapid development and roll-up of financial services into all kinds of applications?

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You’re hustling in your startup, the clock is ticking, and you’re feeling the pressure. Ever heard of leverage? It’s the secret sauce to skyrocketing your productivity. Think of it as getting more bang for your buck, or in this case, more output for your input.

Archimedes said it best: “Give me a place to stand and a lever long enough, and I will move the world.” Whether it’s time, effort, or resources, leverage is about maximising what you get from what you put in.

Takeaway: Leverage is your productivity multiplier.

Explanation: It’s not just about working hard; it’s about working smart. Leverage is the tool that lets you do more with less, breaking the constraints of time and effort.

Leverage in action

Let’s get real. If you’re a dentist, hiring an assistant lets you fix more teeth per hour. If you’re a writer, mastering voice-to-text can triple your writing speed. As a startup founder, understanding your team’s strengths and automating processes can exponentially increase your output. The point is time is fixed, but leverage isn’t. It’s limitless.

Takeaway: Leverage is everywhere; you just have to find it.

Explanation: Whether it’s in hiring, tech, or personal skills, leverage can be found in many forms. The key is identifying where to apply it to maximise your output.

The 390-year hour: The Bezos effect

Let’s talk about Jeff Bezos. Controversies aside, the man has mastered leverage. With a workforce of 750,000, a single hour of his time influences 390 years’ worth of work at Amazon. That’s leverage on steroids. But hey, you don’t have to be Bezos to play the leverage game.

Also Read: How to combat burnout and boost your productivity

Takeaway: Leverage scales; it’s not just for the big players.

Explanation: Leverage isn’t about size; it’s about impact. Even small startups can find ways to amplify their output through smart leverage strategies.

The time affluence factor

Here’s where it gets juicy. Leverage isn’t just about productivity; it’s also the key to time affluence. That’s the feeling of having enough time for what truly matters, whether family, health, or passion projects. Studies show that time affluence is a better indicator of well-being than material wealth. So, if you’re chasing happiness, start by chasing time affluence.

Takeaway: Leverage is your ticket to a richer life beyond just money.

Explanation: By focusing on leverage, you’re not just boosting your startup’s productivity; you’re also creating a life where time is abundant, stress is low, and happiness is high.

The paradox of time

Here’s the kicker: even the wealthy complain about not having enough time. The issue isn’t the actual time you have; it’s how you perceive it. And guess what can shift that perception? Yep, leverage.

Takeaway: Time affluence is a mindset powered by leverage.

Explanation: It’s not about how much free time you have; it’s about how you use it. Leverage gives you the control to use your time effectively, making you feel more time-affluent.

Mastering leverage is not a one-off task; it’s a continuous process. The more you apply it, the more you benefit, both in your startup and life.

So, if you’re looking to break through the ceiling and take your startup to the next level, start thinking in terms of leverage. It’s not just a strategy; it’s a lifestyle. And it’s your key to unlocking a world of unbounded productivity and time affluence.

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Barça Innovation Hub (BIHUB), an innovative division of the iconic football club FC Barcelona, has set its sights on Asia Pacific, aiming to create a lasting impact on the sports industry across the region.

BIHUB looks to collaborate with regional startups whose values align with the club’s mission.

The club, whose Asia Pacific office is headquartered in Hong Kong, also plans to open a physical office in Singapore.

Also Read: Navigating sports tech using the travel industry’s playbook

“At the heart of our endeavour are knowledge-based activities that nurture player development and promote a distinctive style of football play deeply rooted in Barcelona’s rich football heritage. These activities encompass a range of sectors within the sports industry, including health & wellness, media & entertainment, infrastructure management, and prosumer markets in sports fitness,” BIHUB Director Albert Mundet said in an interview with e27. “We want to bring all the activities into Asia, where sports is growing fast from a commercial and tech startup standpoint.”

The multifaceted approach of BIHUB in Asia encompasses a range of activities, including investment in sports-related startups operating in health & wellness, media & entertainment, infrastructure management, and prosumer markets in sports fitness.

The investments will be made in companies in the seed to Series A stages with validated business models and growth potential where BIHUB’s resources, particularly talent and brand value, can create a significant impact. BIHUB, now a wholly owned company of Barcelona FC, will focus on long-term partnerships and value creation rather than short-term profit. “We are in search of the right venture capital partner that understands our business model and those who are already investing in related sectors such as health & wellness and media & entertainment,” he said.

Also Read: Former EVOS Esports CEO Ivan Yeo’s vision for Avium: A Web3-powered entertainment brand

“Our strategy is not to impose a singular approach,” he said to a question on how BIHUB will adapt to the diverse culture of Asia. “Instead, we aim to adapt and resonate with the local cultures and realities of each region. It involves forming partnerships with local entities, as seen with its efforts in Singapore and other parts of Asia Pacific.”

Mundet highlighted Barcelona’s active involvement in harnessing technology, particularly AI and data, to enhance sports operations. BIHUB has been working on optimising practices, tactical analytics, and creating new metrics with machine learning. The club believes technology can create more efficient experiences and better relationships with fans, helping to improve various aspects of the sports industry. The Barcelona arm is also exploring blockchain technology and how it can unlock value in particular aspects.

The BIHUB Director also disclosed that it intends to bring the Sports Tomorrow Congress to Singapore in the near future, aiming to create a tangible network in the region. The event will serve as a platform to share insights, discuss industry trends, and foster professional collaborations.

Also Read: How e-sports is evolving with blockchain gaming

“We are trying to find the right partner and have initial conversations with some potential partners. As soon as we find one, we can find a date to launch the event in the city-state,” he concluded.

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In nearly every industry, a small number of companies are capturing the majority of the profits.

A McKinsey Global Institute study revealed that the top 10 per cent of companies in the world capture 80 per cent of economic profits. This leaves very little for the companies at the bottom.

The middle 60 per cent of businesses earned close to zero economic profit from 2014 to 2016, according to McKinsey, while each of those in the bottom 10 per cent recorded economic losses of $1.5 billion on average.

These companies are also among the world’s most sought-after employers and most valuable brands. Apple, which is highly coveted for its iPhones and MacBooks, is the most valuable company in the world, with a market cap of US$2.54 trillion. It is followed by Microsoft at US$2.09 trillion.

What makes these companies so successful while the majority struggle? Research studies have shown that successful organisations do these key things really well.

Company culture to enhance productivity

Productivity matters — not just by itself. 66 per cent of C-suite executives believe culture is more important to performance than the organisation’s strategy or operating model, based on the findings of PwC’s Global Culture Survey 2021.

If we dig deep into a company’s culture, it will reveal both the written and unwritten rules that people in an organisation follow. The visible parts of a company culture include the vision, strategy, shared values and goals.  The invisible parts, which are very crucial and often overlooked, include beliefs, feelings, norms and traditions. 

Employee morale declines when the workers do not feel a connection to the organisation, which leads to a greater challenge in achieving the company’s goals. 

Engaged employees experience significantly less stress, anger and health issues. Unfortunately, most employees remain disengaged at work. In fact, low engagement alone costs the global economy US$7.8 trillion, according to workplace consultancy Gallup’s State of the Global Workplace: 2022 Report. 

It’s a reality check for companies. How do management teams create a platform where employees feel safe to voice out their opinions and concerns? It’s important that the organisation keeps employees engaged through active dialogue.

Workplace design is a powerful yet underutilised tool for creating engaging, innovative, flexible and creative work environments through a deep understanding of the needs of employees and the companies’ workflows, communication and collaboration patterns.

66 per cent of people feel that a positive work environment is imperative for them to do their best work, and 41 per cent of people agreed that mental well-being at work greatly influences their performance. Studies also show that flexibility is the top priority for employees to return to work. These are high-level indicators of how workplace design impacts people — by building flourishing communities at work, people thrive, and organisations succeed. 

Also Read: Skate to where the puck will be: How category design gives you a breakaway

Global reinsurer Scor realised the need for their business to have a more collaborative, connected and engaged workforce post-pandemic, a problem they chose to solve through their workplace design by creating an engaging workspace. The idea was to create a flexible workspace design around social interaction, collaboration, and relationship building. 

Their workspace, a 20,000 sq ft office in the heart of the commercial district in Singapore, was transformed to encapsulate and amplify the ‘One Scor’ spirit. The design halved the provision of traditional ‘me’ workspace, whereas community spaces saw a four times increase to support collaboration and facilitate conversations. Think more shared desk areas and small meeting spaces for team huddles or just employee get-togethers.

The new workplace design also boasts of a six times increase in alternate work points, lending employees the flexibility to work the way they want. Scor’s new workplace is a true testament to how workplace design encapsulates an organisational culture and drives behaviour change.

Research and development to drive innovation

Secondly, they allocate research and development budgets to drive innovation. 

Never underestimate the power of Research & Development (R&D). Investments in intangible assets such as software and training have become critical to a company’s strategy and growth trajectory, research has shown. 

Any top company would actively invest in R&D to generate new knowledge to create new technology, products, services and systems that it will either use or sell. Top companies spend two to three times more on R&D than their peers, accounting for 70 per cent of total R&D expenditure. 

Companies need to revisit their roadmap and think about the percentage of time and money to be allocated to R&D. Companies that do not innovate often lag behind peers. To remain relevant, companies need always to ensure that they are at the forefront of innovation and thinking a few steps ahead. 

For example, tech giant Microsoft has R&D centres globally. Microsoft is famous for spending vast amounts of money on R&D to hail breakthroughs in artificial intelligence, computer systems, speech recognition and more.

A positive company culture and a commitment to innovation are essential ingredients for establishing a thriving organisation. When combined, they form a potent success formula that increases employee engagement, improves customer satisfaction, and drives long-term profitability. 

Recipe for success

Research studies have shown that strong organisations do four other things really well.

Also Read: Embracing workplace flexibility: The new era begins

They have leadership teams with clear vision and priorities. Business leaders can create a workplace where employees feel valued, motivated, and inspired to bring their best selves to work every day by prioritising these factors. They can also foster an innovative culture in which employees are encouraged to think creatively and take calculated risks, resulting in new ideas and breakthroughs that drive growth and success.

They have clear roles and accountabilities for decisions. Good decision-makers recognise which decisions matter to performance. They think through who should recommend a path, who needs to agree, who should have input, who has ultimate responsibility for making the decision, and who is accountable for follow-through, according to Harvard Business Review.

They have superior execution of programmatic work processes, as well as effective and efficient support processes and systems. Productivity is driving output with the same or less input while nullifying the negative impact from the variables related to a demotivated workforce or cognitive overload — a point of paralysis of information where employees are not able to process and then act on what is heard.

Lastly, there are performance metrics and incentives to attract and retain talent. Performance measures motivate workers to work towards improving productivity. When employees are appreciated for their contribution through incentives, they are motivated to work towards organisational goals.

There is no absolute recipe for success. It is an amalgamation of experimentation and innovation. In order to stay relevant in today’s dynamic business landscape, companies must constantly strive to be on the cutting edge of innovation and possess the foresight to anticipate future trends by being open to experimentation. Ultimately, workplaces and organisation cultures that allow for creative disagreements and friendly “co-opetition” are the ones that ultimately thrive.

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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

Image courtesy of the author

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Digital finance platform for SMEs in Southeast Asia, Funding Societies (Modalku in Indonesia), has secured US$7.5 million in debt funding from Norwegian government-owned development financial institution (DFI) Norfund.

The fintech lender will channel the funds via its tailored financing solutions to the SME segments across all five markets.

This is Norfund’s first debt transaction with a fintech SME lender in Southeast Asia.

Also Read: Funding Societies hopes to move from alternative to mainstream financing one day

This debt funding comes over a month after the fintech firm announced a US$27 million in debt fundraising led by AlteriQ Global, with participation from Aument Capital Partners and Orange Bloom.

Funding Societies Co-Founder and Group CEO Kelvin Teo said, “This milestone is not only a testament to our credit track record through COVID-19 and macro uncertainties, but also a timely opportunity to satisfy the growth capital needs of more underserved SMEs in Southeast Asia.”

Norfund’s Regional Director (Asia) Fay Chetnakarnkul commented, “Funding Societies has been serving Southeast Asia’s underserved businesses with its broad range of financing solutions and solving cash management challenges these SMEs face. We are pleased to be able to support Funding Societies as the company expands its reach and increases financial inclusion further, enabling more businesses to grow and create much-needed jobs in the region.”

Funding Societies is licensed in Singapore, Indonesia, and Thailand, registered in Malaysia, and operates in Vietnam. It provides US$1 billion annually of business financing to SMEs. Its recent milestones include acquiring the regional digital payments platform CardUp and co-investment into Bank Index in Indonesia.

The firm claims to have achieved over US$3.2 billion in business financing, serving about 100,000 regional SMEs.

Its other investors are SoftBank Vision Fund 2, SoftBank Ventures Asia, Sequoia Capital India, Alpha JWC Ventures, SMBC Bank, BRI Ventures, VNG Corporation, Rapyd Ventures, Endeavor, EBDI, SGInnovative, Qualgro, and Golden Gate Ventures.

Also Read: SME lender Funding Societies nets US$27M debt funding

Norfund is the Norwegian investment fund for developing countries with a mission to create jobs and improve lives by investing in businesses that drive sustainable development. Its committed portfolio totals US$3.1 billion in Sub-Saharan Africa, Southeast Asia, and Central America. Norfund has four investment areas: renewable energy, financial inclusion, scalable enterprises and green infrastructure.

Impact investments made by DFIs in Southeast Asia have seen a steady investment of about US$2 billion annually between 2017 and 2022 (amounting to over US$12 billion). Over half of these investments were channelled into the financial services sector, with most of the capital deployed through debt instruments.

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Image Credit: Funding Societies.

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In recent years, Asia has emerged as a flourishing fintech hub with the potential to rival the UK and the US. The region’s rapid economic growth, large population, and increasing digital adoption have laid a strong foundation for its fintech ecosystem. Countries like Singapore, Hong Kong, and China have been at the forefront of this transformation, attracting significant investments and fostering innovation.

As a vivid example of this, earlier in 2023, Singapore was named the top fintech hub in the region and the fourth one globally, after New York, San Francisco, and London.

Let’s take a closer look at the reasons why Asia holds such great promise in the fintech industry, as well as why it may be a good idea to consider establishing a startup in this region.

What makes Asia so attractive for fintech entrepreneurs and investors?

The way I see it, the potential of any region to attract new businesses is determined by the regulatory landscape, the market size, and the pain points it is facing.

From a regulatory point of view, Hong Kong, Singapore, Taiwan, and South Korea have established themselves as leaders in the Asia-Pacific region, both in terms of how developed their financial regulation is and in how streamlined the processes of obtaining relevant licenses and reporting are.

Governments in these countries have been proactive in creating favourable regulatory frameworks that support fintech development while providing a high level of consumer protection and promoting market stability. This provides a sense of certainty and security for investors and encourages foreign direct investment. According to EIU’s business environment ranking for Q2 2023, Asia stands among the top three regions worldwide for doing business.

Secondly, the market size. Based on the data from the Asian Development Bank, there are around 70 million small and medium-sized enterprises (SMEs) in Southeast Asia, which account for 97 per cent of all businesses in the region. This is an astounding figure, and it demonstrates how vital a role SMEs play in job creation, innovation, and overall economic development of this market. 

Also Read: Despite decline, global fintech funding remains fairly stable: McKinsey report

With this in mind, I believe that it is crucial for such businesses to improve access to financial instruments and payment options. It can help them expand operations, invest in new technologies, seize growth opportunities, and reach a wider customer base on a global scale. Doing so, however, necessitates the establishment of new infrastructure for cross-border payments.

The fragmentation effect of the global financial system left in the wake of the COVID-19 pandemic and various ongoing geopolitical tensions have resulted in a decrease in the efficiency of traditional banking systems. And while there are progressive payment systems present in Asia, they tend to be local in nature and focused on B2C clientele. They do not offer much in terms of interoperability or benefits when it comes to cross-border payments for businesses.

It is this very pain point that fintech companies are well-positioned to address by leveraging innovative technological solutions to streamline cross-border payments and deal with such issues as transaction costs, delays, and complexities arising from different currencies and banking systems.

Challenges to consider when entering the Asian market

When a company enters new territories, it must navigate the intricacies of different legal frameworks. This often entails obtaining multiple licenses to operate in various jurisdictions. Based on personal experience, I can say that this can be time-consuming and expensive. And in order for it not to turn into an endless parade of headaches, you need to follow a couple of rules.

Firstly, maintain focus and only seek out licensing for a product that you know is going to bring your business profits in the immediate future. Allocate your resources consistently and strategically to avoid unnecessary expenses, time-consuming processes, and potential regulatory hurdles.

Secondly, I recommend investing in compliance from day one, as it becomes an intrinsic part of developing your presence in a new region. Each jurisdiction has its own rules regarding taxation, consumer safety standards, data privacy regulations, and more.

So, the compliance officer must work closely with the development team and ensure timely and transparent communication with regulators to avoid complications that could harm your business’s reputation and operations.

Finally, make sure to account for the language barrier and the localization of your product. Language barriers can hinder clear instructions and result in misunderstandings and misinterpretations, leading to errors in financial reporting, contracts, and negotiations. This is something that can impact relationships with customers and regulatory bodies alike.

Also Read: Fintech funding in Q3: Indonesia witnesses 94 per cent plunge while Vietnam sees 190 per cent surge

By recognising and addressing this issue upfront through translation services or hiring bilingual staff, businesses can enhance their ability to navigate cultural nuances and avoid potential problems in the new region.

The potential is there, but so are the challenges

The potential for fintech companies to establish themselves in Asia is significant. They can provide local businesses with accessible and affordable financial services that improve their efficiency and competitiveness in the global marketplace. Moreover, by driving innovation in payment systems, fintech firms can contribute to economic growth and financial inclusion within the region. 

However, reaching out to new regions requires accounting for regulatory and localization adjustments. Businesses must plan for them ahead of time to improve their chances of building trust and establishing successful operations on new grounds.

As SMEs increasingly recognise the advantages of partnering with fintech companies, this sector is poised for substantial growth in Asia’s dynamic business environment.

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In the dynamic world of business, the concept of valuation is a multifaceted one, far from a one-size-fits-all measure.

In this article, we will break down the intricacies of business valuation, emphasizing that the worth of your startup can vary significantly depending on the perspective of the inquirer.

Multiple valuations simultaneously

First and foremost, it’s essential to recognise that your business can simultaneously hold multiple valuations, contingent on who is asking the question. Each interested party has their own unique criteria for assessing your company’s value.

Selling as is? Expect four to eight times EBITDA

If you’re contemplating a straightforward sale of your business as it stands, anticipate a valuation in the range of four to eight times your annual profit, often measured as EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation).

Going public? Aim high with 20-30 times profit or three to six times revenue

For those with aspirations of entering the stock market, the stakes are considerably higher. In this case, aim for a valuation that falls within the range of 20-30 times your annual profit or three to six times your annual revenue. Going public demands a greater valuation, often due to the high expectations and scrutiny associated with publicly traded companies.

Seeking venture capital funding? Expect three to 10 times revenue

Entrepreneurs on the hunt for venture capital funding should prepare for a different valuation scenario. Venture capitalists typically place bets on rapid growth and an upward trajectory. Here, a valuation ranging from three to 10 times your annual revenue is typical, reflecting the belief in your company’s potential to scale quickly.

Also Read: Rising above the noise: Why startups shouldn’t chase every news cycle

Private equity investment? Think two to three times revenue

Private equity firms, on the other hand, have a distinct outlook. Their aim is to purchase or list your business within a relatively short time frame, often two to three years, with the intention of achieving a substantial return on investment. Consequently, they might offer a valuation that’s around two to three times your annual revenue.

Acquisition: The future is in their hands

When your business attracts potential acquirers, they will take a different approach to valuation. Their assessment of your business’s worth will depend on the future they envision, where their execution and strategies play a crucial role. Consequently, they might present a valuation that is lower than what you anticipated.

The power of your growth, scale, and profit story

Ultimately, the valuation of your startup is intricately tied to the narrative you present. It’s about showcasing your company’s potential for growth, scale, and profitability. The more compelling and well-documented your story, the higher your valuation is likely to be.

Buyer determines value

It’s essential to remember that in the world of business, it’s not the seller who determines the value of a company. Rather, it’s the buyer who plays a pivotal role in determining the valuation. Understanding the specific expectations and goals of different types of investors is critical to securing the most favourable valuation for your business.

In conclusion, business valuation is not a one-dimensional concept; it’s a multifaceted process influenced by the goals and perspectives of various stakeholders. By comprehending these nuances and adapting your strategy accordingly, you can maximise the value of your startup in different scenarios.

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Radiant1, an Asia-focused AI-based SaaS solution that assists hotels in maximising revenue, has closed its pre-Series A round of funding led by Monkʼs Hill Ventures.

The size of the deal remains undisclosed.

The startup will use the funds to double down in the existing markets, expand into new Asian countries, hire additional tech resources, and expand the product suite. It has already begun experimenting with Generative AI to hyper-personalise customer engagement with hotels.

Also Read: How can you build a living, thriving community around your SaaS product?

Radiant1 was established by serial entrepreneur Apichai Sakulsureeyadej. The startup uses machine learning algorithms to analyse factors, including real-time demand, types of properties, and travel behaviour, to provide optimised room rate pricing on a real-time basis and maximise total revenue for the customer.

Its systems have assisted all types of properties to optimise their revenues while keeping an eye on their bottom line. Its customers include hotels with global chain brands, independent and boutique hotel chains, hotel management companies, and short-stay operators.

The startup has established its footprint across three markets – Thailand, Malaysia, and Indonesia.

Also Read: 7 lessons from building a 7-figure SaaS business with just 1 engineer

“As a pivotal sector in the Southeast Asian economy, the hotel industry has traditionally underutilised technology and data in its day-to-day operations, often leading to reduced yields and profitability challenges. Radiant1 understands the pain points of management and hotel owners, which is why we have successfully scaled up revenue for our clients through our platform. Our mission is clear – to deliver state-of-the-art technology solutions to this industry and, through our platform, empower industry professionals to gain a deeper understanding of data utilisation,” said Sakulsureeyadej.

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Image Credit: Radiant1

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Japan-based clean tech startup Thermalytica was announced as the grand prize winner of SLINGSHOT 2023 on Thursday at the Singapore Week of Innovation and Technology (SWITCH) flagship conference. The company won a grant prize of over US$150,000.

The competition also announced Bering Lab, which provides domain-specific translation engines and tools powered by Artificial Intelligence (AI) for the legal and patent industries, as its first runner-up.

It also named Kinexcs, an AI-based digital health and wearables company focused on enabling mobility for patients with musculoskeletal conditions, as second runner-up. These companies won grant prizes of US$110,000 and US$75,000, respectively.

In total, there were 10 winners across five domains: Transformative Digital Technologies, Health and Biomedical, Consumer Media, Goods & Services, Manufacturing, Trade & Connectivity, and Environment, Energy & Green Technologies.

Enterprise Singapore (EnterpriseSG) Chairman Peter Ong said in a press statement, “The strong participation in SLINGSHOT 2023 reflects the continued strength of Singapore’s startup ecosystem. As the key driver of the ecosystem, EnterpriseSG will continue to uncover and nurture innovative startups on their deep tech journeys. In particular, we want to connect startups to both private and public sector partners to help them secure funding, grow, and scale.”

At the finals, the top 50 winners pitched to a judging panel that consisted of Carmen Yuen (General Partner of Vertex Ventures), Eduardo Saverin (Co-founder and Co-CEO of B Capital Group), Magnus Grimeland (Founder and CEO of Antler), and Kuo-Yi Lim (Co-Founder and Managing Partner of Monk’s Hill Ventures).

Also Read: Amazon Web Services (AWS), Enterprise SG join forces for SWITCH & SLINGSHOT2022

In addition to the grant prizes, the top three winners also received other prizes, including up to 18 months of rent-free space at either of the LaunchPads at JTC’s one-north and Jurong Innovation District, and be awarded the Entrepass, a workpass that allows foreign founders to enter and establish innovative and venture-backed startups in Singapore.

They will also receive a complimentary 12-month international membership with Action Community for Entrepreneurship (ACE.SG), which offers them resources and information.

Organised by EnterpriseSG, SLINGSHOT is a global deep tech startup pitching competition that “uncovers startups with innovative and cutting edge technologies and enables them to scale from Singapore.”

According to the organisation, this seventh edition of SLINGSHOT saw a record 4,700 applications from 150 markets, including the US, the UK, Japan, South Korea, and Germany. This year also saw an over 50 per cent increase in applications from the Southeast Asian (SEA) region, namely from Malaysia, Vietnam, and Thailand.

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Image Credit: SLINGSHOT 2023

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