Dear reader,

BlackRock, a major asset manager, has further devalued its stake in Indian edtech startup Byju’s, reducing its implied valuation from US$22 billion in early 2022 to US$1 billion. This drastic adjustment follows BlackRock’s previous markdowns and reflects a broader trend of investors reevaluating Byju’s, once considered India’s most valuable startup at US$22 billion. Other investors, like Prosus, have also revised Byju’s valuation downward, with Prosus estimating it at “sub US$3 billion.”

The revaluation marks a significant reversal for Byju’s, previously hailed as the poster child of India’s startup ecosystem. The startup, known for its innovative teaching methods, had ambitious plans, including a potential IPO in early 2022 valued at up to US$40 billion. However, geopolitical events, such as Russia’s invasion of Ukraine, disrupted market conditions, prompting Byju’s to delay its IPO.

Currently, Byju’s faces a challenging landscape, struggling with capital raising, payroll, and a billion-plus debt burden. It fell short of its revenue target for the fiscal year ending March 2022, and key departures, including the CFO and board members, have added to the company’s woes. The situation underscores the volatility and uncertainties faced by once-prominent startups amid evolving market dynamics and geopolitical events.

Sainul,
Editor.
—-

BlackRock cuts Byju’s valuation by 95% to US$1B
BlackRock, which owns less than 1% of Byju’s, slashed the implied valuation of the Indian edutech startup to US$1B from US$22B in early 2022; Byju’s, which spent over US$2.5B in 2021 and 2022 acquiring over half a dozen firms globally, was once valued US$50B.

Fintech funding in Southeast Asia hits a five-year low in 2023
Fintech companies in the region raised just US$2B in 2023, a plunge of 65% from US$5.9B in 2022; The space saw the highest funding (US$8.6B) in 2021; The number of deals fell 50% in 2023 to just 142, according to a report by Tracxn.

Ex-Twitter CEO Parag Agrawal building AI startup to compete with ChatGPT
As per the Information, Agrawal has raised US$30M from one of the early investors of OpenAI; Agrawal’s new venture targets the development of specialized software for Large Language Model creators.

Lazada lays off 20% of its headcount in latest overhaul
Lazada is still in a loss-making status, order growth has slowed over the past year, and the company also faces tightened competition from regional rival Shopee; The latest overhaul is set to shift focus towards centralised decision-making at the headquarters.

Grab’s Vietnam rival Be Group secures US$30.3M to boost expansion
The investor is VPBank Securities; Be Group claims to hold a 35% share of the country’s ride-hailing market; The company has said it plans to achieve profitability with positive EBITDA in FY2024.

SCI Ecommerce doubles revenue to US$479M, turns profitable in 2022
The company also recorded US$3.5M in net profits after incurring US$2.5M in losses the previous year; Services and subscriptions drove a larger share of revenue (US$273.5M).

Report: BNPL remains popular amongst Indonesian fintech services users
25% of users use BNPL service in addition to e-wallet (75%) and mobile banking (45%); The rising popularity of BNPL is attributed to users’ ability to afford daily necessities and lifestyle needs, according to research firm Jakpat.

FlyORO secures US$1.6M in pre-Series A round to reduce flight emissions
Investors are Audacy Ventures, Investible and private investors; FlyORO, which provides last-mile sustainable aviation fuels blending technologies, plans to expand into Australia and the US.

Thai biotech firm UniFAHS raises US$1.4M for SEA expansion
Investors are A2D Ventures, ADB Ventures, and InnoSpace; UniFAHS utilises phage technology for sustainable and safe food production, specialising in meat alternatives; It contributes to combating antimicrobial resistance.

OKX Ventures backs Web3 interoperability infra firm Polyhedra
Polyhedra Network’s zkBridge protocol facilitates trustless cross-chain infrastructure for Layer 1 and Layer 2 interoperability; By utilising ZK proof technology, zkBridge enables the receiving chain to verify specific state transitions on the sending chain.

Infobank, Farquhar to help Korean startups seeking global expansion
iAccel, the investment department of Infobank, and Farquhar will collaborate on exchanging innovation and insights, mutually supporting each other’s portfolio companies and jointly participating in bids for global acceleration initiatives.

Discord lays off 170 people, blames growing too quickly
Discord saw massive growth during pandemic lockdowns, but still isn’t profitable, the Verge reports. Last August, Discord laid off 4% of its staff — nearly 40 employees — as part of a company-wide restructuring.

Asia Partners bullish on SEA’s tech potential despite global IPO challenges
Asia Partners, optimistic about Southeast Asia’s tech boom, discusses its investment strategy, emphasising untapped sectors.

Semaai looks to elevate agritech solutions, financial inclusion in Indonesia
CEO Muhammad Yoga Anindito shares insights into Semaai’s post-US$4.7M investment plans, focusing on enhancing user experiences and expanding services across Indonesian villages.

Long-term impacts of the Silicon Valley Bank collapse loom: experts
SEA’s investors and startups share insights on the SVB fallout and its potential effects on funding, valuations, and banking relationships.

Kampd intends to reshape professional networking with a unique approach
Kampd’s mission is to provide purposeful content, solve the challenge of fragmented business content, and differentiate from platforms like LinkedIn.

Navigating the gender divide in the Southeast Asia’s fintech landscape
Women hold just 13 per cent of management, board, and investor roles across early stage to public companies within the fintech ecosystem.

That time Sam Altman went to take a smoke break around the office building
Sam Altman’s reputation as a charismatic leader seemed to play a great role in how the situation progressed at Open AI last week.

The power of financial models for startups: A guide for founders and VCs
Financial models are powerful instruments that convey a startup’s vision, strategy, and deep understanding of its business.

Evolution of advertising industry with the rise of OpenAI’s ChatGPT
OpenAI can now leverage the current information available on the internet, including complete and direct links to the source.

2024 Hong Kong innovation scene: Where are we headed?
While the fundamentals of HK have shaken and shifted, 2023 was a year where much of the foundational work of building an innovation scene was done.

Navigating the digital transformation in BFSI amid cybersecurity challenges
Opting for a comprehensive WAAP solution ensures strong defence against key challenges faced by BFSI institutions.

Pay transparency, training, AI: Understanding HR’s emerging legal risks
HR professionals have tons of power to guide companies in the right direction; not just checkbox compliance, but real justice and engagement.

==

The post Ecosystem Roundup: Byju’s valuation cut down by 95% to US$1B; SEA’s fintech funding hits a five-year low; Parag Agrawal building AI startup appeared first on e27.

The startup landscape in Southeast Asia is thriving as diverse companies secure significant funding in 2024, signalling sustained investor confidence in the region’s innovation.

Notable ventures include FlyORO in Singapore, pioneering sustainable aviation fuels, and Be Group in Vietnam, dominating the multi-service consumer platform sector. Thailand’s UniFAHS stands out with its focus on sustainable food production using patented phage technology, addressing issues like antimicrobial resistance. Polyhedra in Seychelles, securing a Series A investment, leads the charge in Web3 infrastructure development through the zkBridge protocol.

Indonesian startups Komunal and Semaai raise substantial amounts for their neo-rural banking and agritech solutions, respectively. Additionally, Japan’s Micoworks excels in optimizing communication for businesses.

The varied sectors and strong investor interest underscore the dynamic and promising nature of Southeast Asia’s entrepreneurial landscape.

Below are the details of the investments the companies in the region raised in January so far:

FlyORO (Singapore)

Amount raised: US$1.6M
Stage: pre-Series A
Investors: Audacy Ventures (lead), Investible, unnamed private investors
Company profile: FlyORO is a provider of last-mile sustainable aviation fuels (SAF) blending technologies. Founded by Jonathan Yeo, Joe Ng, and Genevieve Toh, FlyORO provides a modular, on-demand blending service of SAF and jet fuel to enable aviation on its emissions reduction journey. It enables flyers the flexibility to align their ESG targets per flight.

Be Group (Vietnam)

Amount raised: US$30.3M
Stage: Strategic
Investor: VPBank Securities Joint Stock Company 
Company profile: Be Group is the startup behind the multi-service consumer platform ‘Be’. Started around five years ago, Be Group has worked with over 300,000 drivers. In 2023 alone, the company facilitated over 120 million rides, maintaining a dominant 35 per cent market share in the ride-hailing sector across 40 cities and provinces in Vietnam. The platform currently offers more than 15 services, including multimodal transportation, express delivery, food delivery, insurance, and telecommunications.

UniFAHS (Thailand)

Amount raised: US$1.4M
Stage: seed
Investors: A2D Ventures (lead), ADB Ventures, InnoSpace
Company profile: Founded in 2020, UniFAHS utilises its patented phage technology for sustainable and safe food production, specialising in meat alternatives. The company actively contributes to combating antimicrobial resistance (AMR) and advocates for climate-friendly agriculture. UniFAHS adopts a ‘One Health’ approach, recognising the interconnectedness of human, animal, and environmental health to address challenges holistically.

Polyhedra (Seychelles)

Amount raised: Undisclosed
Stage: Series A
Investor: OKX Ventures
Company profile: Polyhedra Network builds the next generation of infrastructure for Web3, focusing on interoperability, scalability and privacy, using advanced zero-knowledge (ZK) proof technology. Polyhedra Network is the company behind zkBridge protocol, which facilitates trustless cross-chain infrastructure for Layer 1 and Layer 2 interoperability. By utilizing ZK proof technology, zkBridge enables the receiving chain to verify specific state transitions on the sending chain. This approach ensures better security without relying on external assumptions and reduces the costs associated with on-chain verification.

Komunal (Indonesia)

Amount raised: US$5.5M 
Stage:  Series A+
Investors: Sumitomo Corporation Equity Asia (lead), Jafco Asia, Skystar Capital, Sovereign Capital, Gobi Partners.
Company profile: Komunal is a fintech company offering neo-rural bank services in Indonesia. Launched in 2019, Komunal digitises rural banks by combining funding access and hyperlocal lending to support economic growth in Indonesia. It provides financial services to the underbanked population through its unique partnership with the rural banks in Indonesia. The firm’s vision is to elevate rural banks and SMEs in the archipelago to serve their local community better.

Micoworks (Japan)

Amount raised: US$24.5M
Stage: Series B
Investors: Vertex Growth (lead), JAFCO Group, Mitsubishi UFJ Capital, SMBC Venture Capital, Mizuho Capital, ALL STAR SAAS FUND, Eight Roads Ventures.
Company profile: Micoworks is a marketing company that optimises communication between companies and their customers. Headquartered in Kita-ku and led by CEO Osamu Yamada, Micoworks develops and provides marketing platforms MicoCloud and Micomii. MicoCloud is a marketing platform that optimises communication between companies and their customers. In addition to offering highly extended functions for the official LINE account, it collects data across multiple channels. This data collection enables optimal communication tailored to customer needs. Furthermore, MicoCloud creates tangible business results for clients by providing a one-stop service that includes consulting and operational support.

Funding Societies (Singapore, Indonesia)

Amount raised: Not disclosed
Stage: Strategic
Investors: Khazanah, CGC Digital
Company profile: Established in 2015, Funding Societies provides financing to micro, small and medium enterprises (MSMEs), especially micro and small businesses currently unserved by existing financial institutions. Since its inception, it claims to have disbursed over US$3.5 billion in business financing through five million transactions, positively impacting over 100,000 businesses across Malaysia, Singapore, Indonesia, Thailand, and Vietnam.

Semaai (Indonesia)

Amount raised: US$4.7M
Stage: Debt and equity
Investors: CyberAgent Capital (Japan), Sumitomo Corporation Equity Asia, Ruvento, MyAsiaVC, Heracles Ventures, Surge, Accion Venture Lab, Beenext
Company profile: Semaai is a ‘farmer-first’ company building full-stack agritech solutions to help farmers and rural MSMEs such as toko tanis in Indonesia maximise their earning potential and access better financing, services and new markets.

The post SEA startups across diverse sectors attract global investors in January so far appeared first on e27.

Venture capital investments into the fintech space in Southeast Asia hit the lowest in 2023 compared to the last five years, according to a Tracxn report.

Fintech companies in the region raised just US$2 billion in 2023, a plunge of 65 per cent from US$5.9 billion in 2022. The space saw the highest funding (US$8.6 billion) in 2021.

The number of deals fell 50 per cent in 2023 — just 142 in 2023 compared to 288 in 2022, revealed the Tracxn Geo Annual Report: SEA FinTech 2023.

Also Read: With just US$108M raised, December was the least funded month in 2023: Tracxn

In 2023, seed-stage investments declined 68 per cent to US$166 million from US$522 million in 2022. Early-stage funding plunged to US$836 million from US$2.6 billion in 2022. Late-stage funding also saw a 64 per cent drop to US$1 billion.

With US$689 million raised, Q4 was the highest funded quarter of the year, while Q3 was the lowest (US$282 million).

A downward trend was observed in the US$100 million+ rounds in 2023 to just six in 2023 from 16 in 2022. Kredivo, Investree, and Gojek were some of the companies that reported US$100 million+ rounds. No new unicorns emerged during the year, similar to 2022.

The number of acquisitions also fell to 19, a sharp contrast from 27 in 2022 and slightly higher than 17 in 2021. Further, only two regional fintech companies went public in the past three years, with one IPO each in 2023 and 2022.

The highest funding was observed in the alternative lending, payments and insurtech segments. The alternative lending space attracted US$700 million in 2023 — an 11 per cent growth over 2022. Insurtech investments stood at US$256 million in 2023, a sharp spike of 105 per cent compared with US$125 million raised in 2022.

In contrast, the payments saw an 87 per cent plummet over the previous year, securing just US$270 million in 2023.

Singapore dominated the fintech funding space by securing US$1.1 billion in the past year.

East Ventures, YCombinator, and 500 Global were the most active investors to date in the SEA fintech sector.

Antler, Saison Capital, and Tenity were the top seed-stage investors, while Gobi Partners, Peak XV Partners, and Openspace Ventures were the most active early-stage investors in 2023. EDBI, Prosperity7 Ventures and 01Fintech were the top late-stage investors in 2023.

How Indonesian fintechs fared in 2023

Indonesia, the second-largest economy and the second-highest-funded startup ecosystem in the region, witnessed a 51 per cent decline in fintech funding in 2023 to US$765 million.

Seed-stage funding saw a significant plunge (84 per cent) to US$9.5 million in 2023. Early-stage investments fell 79 per cent to $99.4 million, while late-stage financing saw a 40 drop to US$656 million.

Also Read: Startup funding in SEA falls 65% to US$4.3B in 2023: Tracxn

Alternative lending, payments, and banking tech were the top-performing segments.

The sector witnessed four acquisitions in 2023, similar to 2022.

500 Global, Hustle Fund, and Mandiri Capital Indonesia were the top investors in the seed stage in 2023, while Gobi Partners, Alpha Trio, and Openspace Ventures were the most active early-stage investors.

The post Fintech funding in Southeast Asia hits a five-year low in 2023 appeared first on e27.

The adoption of digital transformation in Banking, Financial Services and Insurance (BFSI) has increased over time and has been further accelerated after the pandemic. This led to increased utilisation of digital wallets, fintech application adoption and point-of-sale terminals — allowing new financial lifestyles.

For example, annual fintech app installs in Asia have already grown by 32 per cent from 2022 to 2023. This is twice higher than the global annual install average growth of 14 per cent. In APAC, Thailand, in particular, has been at the forefront of digitalisation with a 95 per cent growth in BFSI applications year on year.

The region’s growing demand for mobile banking solutions further fuels this digital revolution, opening new avenues for global expansion and the enhancement of services. Overall, the digital transformation has reshaped the BFSI sector by modernising operations, enhancing productivity, and providing solutions that enable banking in the new normal.

However, the rise of digital banking is creating new online security challenges, with cyberattacks on financial institutions around the world growing exponentially. According to the IBM Security X-Force Threat Intelligence Index of 2022, Asia was the most attacked region in 2021, accounting for 26 per cent of all attacks. To delve deeper, 70 per cent of these attacks targeted banks. The number of critical vulnerabilities (CVEs) is also increasing by 13 per cent per month this year, as per a report by Coalition.

Furthermore, with the increase in the adoption of Data Protection regulations in the region, companies must ensure they comply with such laws, adding one more layer of complexity to their operational landscape.

In Singapore, for example, organisations that are handling payment data must ensure compliance with both the PDPA and PCI DSS to adequately protect personal and financial information. Without PCI DSS compliance, they are unable to ensure a secure environment for enterprises that accept, process, store, or transmit credit card information.

Also Read: The business edge: Why prioritising employee cybersecurity is a smart investment

Protecting sensitive financial data and ensuring cyber resilience must be at the forefront of every strategy. In order to do so, organisations must understand the BFSI threat landscape and make sure they have a holistic cybersecurity approach.

Understanding BFSI’s threat landscape

The BFSI sector faces a multifaceted threat landscape, with API attacks being one of the prominent concerns. These attacks have the potential to disrupt online services, leading to significant financial losses and irreparable damage to an institution’s reputation.

Unsecured APIs within the BFSI sector pose a grave risk as they can expose sensitive customer data to theft and manipulation, potentially resulting in severe regulatory penalties and a loss of customer trust. In fact, Gartner has predicted that by 2025, 50 per cent of data theft will be attributed to unsecured APIs.

Additionally, the rise of malicious bots has further complicated the threat landscape for BFSI companies. These bots account for over 50 per cent of all internet traffic and are constantly scanning BFSI applications and APIs for security misconfigurations and vulnerabilities.

Within the realm of API attacks, the BFSI sector faces several specific types of threats, including:

• Unauthorised access: Attackers leverage stolen login credentials to gain unauthorised access to user accounts through APIs.
• Security misconfiguration: Attackers exploit API misconfigurations and other vulnerabilities to gain access to sensitive data, potentially leading to data breaches.
• Application DDoS: Attackers flood APIs with an overwhelming number of requests, causing system crashes or slow response times and disrupting online services.
• Man-in-the-middle (MITM) attack: Attackers intercept data transmitted between API endpoints, enabling them to steal sensitive information, posing a significant risk to data integrity and confidentiality.

Handling cybersecurity threats: A holistic approach

To mitigate the risk of cyberattacks on BFSI applications and infrastructure, enterprises need to implement the following best practices encompassing people, processes, and technology.

• Advanced threat detection: Advanced threat detection mechanisms can identify abnormal patterns of behaviour within web applications. Machine learning and AI-driven solutions can help BFSI entities stay one step ahead of cybercriminals.
• Security assessments: Regular security assessments and penetration testing are essential to identify vulnerabilities within web applications. A proactive approach to testing and patching vulnerabilities to prevent exploitation is required.

Also Read: The state of cybersecurity in 2023: How APAC organisations can stay ahead of the curve

• Secure coding practices: Ensuring that web applications are developed with secure coding practices in mind is crucial. This approach involves input validation, output encoding, and parameterised queries to prevent common vulnerabilities like SQL injection and cross-site scripting (XSS).
• Encryption: The significance of encryption in securing data both in transit and at rest cannot be more important. The use of secure protocols like HTTPS and SSL/TLS can prevent data breaches.
• API security: APIs are the lifeblood of modern BFSI applications, so discovering and securing API endpoints against malicious requests is a critical threat plane that should not be overlooked.
• DDoS protection: The high availability and performance requirements of BFSI applications require scalable protection against DDoS attacks, which are increasing in complexity and size each year.
• Bot management: Bot Management solutions help separate benign bots (e.g., search engine bots) from malicious bots (e.g., those attempting Account Takeover attacks), better protecting BFSI customers and greatly reducing unwanted traffic on critical applications and APIs.

With a global shortage of security professionals, most organisations can benefit from dedicated experts who not only set up the latest security solutions but maintain them and offer support teams during attacks. Managed security operations, including 24×7 SOC, deploying cutting-edge technologies, the latest threat intelligence and custom runbooks to enhance overall security posture.

In conclusion, opting for a holistic Web Application and API Protection (WAAP) solution offers a robust defence against the prevalent and high-priority challenges currently encountered by BFSI institutions.

Furthermore, the adoption of a unified WAAP not only bolsters multiple compliance requirements, such as PCI DSS 6.6 and similar standards, but also streamlines security point solutions – leading to cost reduction, enhanced security, and fortified enterprise security posture. These measures collectively constitute a holistic approach to cybersecurity, addressing the multifaceted challenges that BFSI institutions face in the digital age.

—

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 credit: Canva

The post Securing the future: Navigating the digital transformation in BFSI amid cybersecurity challenges appeared first on e27.

FlyORO, a provider of last-mile sustainable aviation fuels (SAF) blending technologies, has closed a pre-Series A round, securing US$1.6 million.

Hong Kong-based Audacy Ventures led the round, with participation from Asia Pacific-based VC firm Investible and unnamed private investors.

Singapore-based FlyORO will use the money to accelerate its ongoing projects and international expansion. The initial focus will be on strategic initiatives in Australia and the US.

Also Read: FlyORO wants to decarbonise aviation with its last-mile sustainable fuel blending tech

The Australian market is gaining momentum in the development of SAF, leveraging its abundant feedstock resources and skilled workforce. The country’s optimistic outlook includes establishing a local SAF production facility to supply carriers within the region.

With favourable legislation, the US fosters innovative developments across various SAF technological pathways. With the highest number of airport distributions and private aircraft ownership globally, FlyORO aims to initiate early developments in the US in 2024.

Founded by Jonathan Yeo, Joe Ng, and Genevieve Toh, FlyORO provides a modular, on-demand blending service of SAF and jet fuel to enable aviation on its emissions reduction journey. It enables flyers the flexibility to align their ESG targets per flight. With a small form factor of 40ft, it is space-efficient and portable and can be installed anywhere at or off the airport base. This solution allows airport fuel operators to serve flyers more effectively with a simplified supply chain.

Following the launch of FlyORO’s modular SAF blending technology AlphaLite, in collaboration with Jet Aviation in April 2023, FlyORO aims to reduce aviation emissions globally. AlphaLite offers flexibility and control to flyers. AlphaLite empowers aircraft operators to make better-informed decisions regarding SAF adoption, considering factors from cost parity to feedstock quality.

Also Read: The Capture app enables you to track, reduce and offset carbon emissions from everyday life

SAF is estimated to contribute 65 per cent of aviation’s emissions reduction goal, equivalent to approximately 450 billion litres of SAF adoption annually by 2050.

“2023 has been a pivotal year for us. We launched with Jet Aviation as our SAF partner for our Singapore market in April. In just seven months, we are going beyond our borders, much earlier than we expected,” said FlyORO CEO Jonathan Yeo.

FlyORO plans to commence the next financing round in the second half of 2024.

The post FlyORO secures US$1.6M in pre-Series A round to reduce flight emissions appeared first on e27.

2023 was a tough year for early-stage founders and VC funds around the globe, and HK is no exception. HK has been in an even trickier position than other cities, given its highly outward-facing economy and connectivity with China, when the sentiment of global investment in China turned so sharply after the huge bull runs in the country for the past 20+ years.

While the fundamentals of HK have shaken and shifted, 2023 was a year where much of the foundational work of building an innovation scene was done. Here are my two cents on what to expect in Hong Kong for 2024 in the early-stage startup scene, organised by opportunities and challenges:

Opportunities

RAISe+ Scheme: First batch of university startups carrying unique IPs to be unveiled

An HK government-led program with an allocation of HK$10 (US$1.28) billion, the RAISe+ scheme will, on a matching basis, fund 100 high-potential research teams in 8 universities. Each team can get up to HK$100 (US$12.84) million in non-dilutive funding.

From the $ sign — this is the biggest funding scheme available for university-originated startups in HK. The scheme was a core focus for many knowledge transfer offices in HK universities in 2023, where professors and their fellow researchers/project leads were busy writing proposals while university staff jiggled with all the letters of intent from investors/industry partners and requirements set forth by ITC. The first batch is expected to be announced within Q1 2024 after screening.

We met some of these projects with interesting underlying IPs. How the universities, professors, project leads, and investors handle the rest of the difficult parts of starting a venture – hiring, fundraising, productisation, fundraising, and more — would be the next set of questions to be answered.

HK remains the go-to hub for GBA startups going global

We spent quite some time in 2023 meeting China-based early-stage startups related to advanced manufacturing (semiconductor, new material, ESG material), industry 4.0 (robotics, automation, innovations in traditional industries), and cross-border e-commerce.

Also Read: How AI will shape the future: A look ahead to 2024 and beyond

Chinese founders shared their firsthand experience facing the lowered spending power of local corporations and consumers. As a result, many of them have taken their products abroad, selling at a higher price point than what they could ask for in China. Over time, China has built up top-of-class manufacturing and operating know-how and trained skilled labour that is unreplaceable by other geographies (read: Will China Continue to Grow? by Weijian Shan).

China startups that possess unique R&D and manufacturing know-how and operate in non-sensitive industries will still utilise Hong Kong as the hub for initial funding and landing their first batch of overseas customers.

Lots of dry powder waiting to deploy in HK

In 2023, local and global GPs secured fresh funding to be deployed specifically to companies with a HK nexus, thanks to the setup of the Hong Kong Growth Portfolio. Last year, many of them were setting up their team and understanding the ecosystem in HK. On the other side, CVCs and universities are increasingly active in either direct investment or fund investment in HK as well. There is pressure to deploy for these investors, which should help to drive more deal activity in 2024 in HK.

Having said all this, the HK startup ecosystem is faced with some fundamental challenges:

Challenges

Opex: Cost of operating and funding gap between Seed → B

While GPs are loaded with cash, there is a lack of startups with a valuation range of US$200 million – $500 million that can digest a round of US$20 million – US$100 million in HK. On the other side, there has been a funding gap that remains unfilled for startups looking for Series A/+ lead investors.

Rent and labour costs continue to be the two biggest headaches for HK-based startups – needs no further elaboration.

Also Read: The quiet giants of 2024: Celebrating the success of ‘boring’ businesses

Talent: Lack of startup operators and operator-turn-founders

While there has been strong growth in the number of startups in HK over the past decade, the ecosystem of operators who are willing to take the risk and be the first employees of a fresh HK startup is still nascent. We are still building the flywheel where early employees of successful startups become founders or operators for another early-stage venture. Not to mention the challenge of the tech brain drain in the city since 2020.

Exit pathway: Billion-dollar question for both VCs and startups

With many corporates cutting their spending, the incentive for larger players to acquire startups has decreased, especially when M&A activity has already been low in the region. Coupled with a stagnant IPO market, HK startups are faced with an even tougher market compared to other comparable startups in other regions.

What are your thoughts about the startup scene in 2024?

—

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 credit: Canva

The post 2024 Hong Kong innovation scene: Where are we headed? appeared first on e27.

Semaai, a ‘farmer-first’ company building full-stack agritech solutions, has just announced a US$4.7 million investment round led by CyberAgent Capital to propel the expansion of its embedded fintech solutions and agronomy advisory services in Indonesia. The company aims to enhance the user experience in its marketplace by integrating with additional financial institutions. It plans to cover 75 per cent of over 8,200 Indonesian villages by 2024.

In an interview with e27, Semaai Co-Founder and CEO Muhammad Yoga Anindito delves into Semaai’s integrated digital ecosystem, strategies for growth in Central Java, and the pivotal role of technology in supporting agri-retailers and smallholder farmers.

Edited excerpts:

Can you share more details about how this funding will specifically contribute to expanding Semaai’s embedded fintech solutions and agronomy advisory services?

The funds will be utilised to enhance the integrated fintech experience within our marketplace, aiming for a more seamless user experience. Additionally, we plan to broaden our offerings by integrating with additional financial institutions and fintech players.

Also Read: Semaai nets US$4.7M to expand its agritech, fintech solutions to Central Java

Semaai aims to cover 75 per cent of over 8,200 villages in Indonesia by the end of 2024. How do you plan to achieve this ambitious goal, and what impact do you anticipate on the local agricultural communities?

Our mission is to empower the local communities, and our success depends on addressing their needs. Our full-stack agritech solution has enhanced access to crop nutrition through the input marketplace and increased knowledge about the latest agri-input products through advisory services. But this is just the beginning, and we believe technology can add value to these communities in multiple ways.

Could you elaborate on how Semaai’s digital marketplace for agricultural inputs, agronomy advisory services, and financial solutions collectively form an integrated digital ecosystem? How does this address disruptions in the supply chain and support agri-retailers and smallholder farmers?

When combined, these services can help retailers and smallholder farmers make smarter, more well-informed decisions and implement more sustainable farming practices. Never before had farmers and retailers had better access to pricing and knowledge transparency, thanks to the efficiency and speed that we bring to the supply chain.

You plan to focus on strengthening Semaai’s presence in Central Java. What factors led to the decision to prioritise this region, and how do you see it contributing to the overall growth and impact of Semaai’s services?

Central Java has a sizable agricultural sector and farmer population. Strengthening our foundation in this province could serve as a blueprint to make our expansion outside the province easier.

Semaai claims a significant increase in net revenue, Toko Tani marketplace user base, and advisory feature adoption. What key strategies or initiatives do you attribute to this remarkable growth in the past 12 months?

Margin expansion came naturally as we grew in transaction volume, and our state-of-the-art logistics tech has proven to be a major leverage for us to go one step closer towards profitability.

This efficient logistics system contributed to margin expansion and enhanced the overall user experience, attracting more users to our marketplace.

As a ‘farmer-first’ company, how does Semaai ensure that its agri-tech solutions are tailored to the specific needs and challenges farmers and rural MSMEs in Indonesia face?

We have a specific bottom-up approach to business development. Every decision we make, every feature we plan to build, and every policy we enforce has to go through a rigorous proof-of-concept process from the field. Having a system to accommodate this process and living it as part of our culture is the key to maintaining our swift development as a customer-first company.

With the expansion of financial services in collaboration with institutions and fintech providers, how does Semaai plan to address the unique financial needs of agri-retailers and farmers? What role does technology play in enhancing financial inclusivity in the agriculture sector?

The unique integration of fintech institutions with our know-how of the input market, coupled with the data collected through a marketplace, uniquely positions us to develop tailored solutions for key stakeholders.

Also Read: Semaai nets funding to create integrated digital ecosystem for farmers, toko tanis in Indonesia

Can you provide insights into the partnerships with financial institutions and fintech providers? How do these collaborations enhance Semaai’s ability to provide comprehensive financial solutions to its users?

We have multiple integrations and conversations underway for digital financial services. We are exploring everything from supply chain financing to insurance to farmer lending. Watch this space for more.

The agronomy advisory service plays a crucial role in Semaai’s ecosystem. How is educational content organised, and how do you ensure that farmers can access relevant information to improve their farming practices?

Currently, the agronomy service is focused on pests and disease detection, and the educational content on the marketplace app is organised around that. With the raise, we are exploring digital tools to help farmers adopt better practices.

Looking ahead, what are the key milestones and plans for Semaai, both in terms of geographical expansion and the enhancement of your agri-tech solutions? How do you envision Semaai’s role in shaping the future of Indonesia’s agricultural landscape?

Our vision is to be the digital platform of choice for Indonesian agriculture, and we can only achieve this by addressing the different needs of our customers. Our priority is to advance our solution stack further to better cater to the needs of our customers, and we are confident we can easily expand this enhanced offering to the rest of Indonesia.

The post Semaai looks to elevate agritech solutions, financial inclusion in Indonesian farming appeared first on e27.

OKX Ventures, the investment arm of global crypto exchange and Web3 technology company OKX, has joined the Series A funding round of Polyhedra Network.

The amount has not been undisclosed.

Polyhedra Network builds the next generation of infrastructure for Web3, focusing on interoperability, scalability and privacy, using advanced zero-knowledge (ZK) proof technology.

Also Read: What metaverse trends should you keep an eye on in 2024?

Polyhedra Network is the company behind zkBridge protocol, which facilitates trustless cross-chain infrastructure for Layer 1 and Layer 2 interoperability. By utilizing ZK proof technology, zkBridge enables the receiving chain to verify specific state transitions on the sending chain. This approach ensures better security without relying on external assumptions and reduces the costs associated with on-chain verification.

In April 2023, Polyhedra Network launched ‘zkBridge Mainnet Alpha,’ providing interoperability for over 20 Layer 1 and Layer 2 blockchains, including Bitcoin, Ethereum, BNB Chain and Arbitrium. zkBridge, secured by Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (zk-SNARK) technology, is the first trustless, efficient, secure and universal cross-chain interoperability protocol.

Also Read: Whampoa Digital, Wemade partner to form US$100M Web3 fund

In 2023, Polyhedra Network launched deVirgo, a novel distributed proof system that speeds up proof generation and recursive proofs, reducing the on-chain proof verification costs of zkBridge. In addition, it recently introduced its Bitcoin messaging protocol with zkBridge, bringing trustless interoperability to the Bitcoin ecosystem through ZK proof technology.

The post OKX Ventures backs Web3 interoperability infra firm Polyhedra appeared first on e27.

In a recent survey of the behaviour and preference of Indonesian fintech services users in the second half of 2023, research firm Jakpat revealed buy-now-pay-later (BNPL) as one of the most popular fintech services in the country, with 25 per cent of users using them in addition to e-wallet (75 per cent) and mobile banking (45 per cent).

Involving more than 1,500 respondents of various ages, the survey revealed that in the second half of last year, 86 per cent of respondents had made a form of digital payment. They also performed other finance activities that included paying for credits (37 per cent), investing (37 per cent), and insurance (24 per cent).

In choosing a fintech platform, Indonesian users considered the following factors: Being registered on the Financial Services Authority (OJK) at 55 per cent, easy method of payment at 54 per cent, and an easy-to-use, user-friendly app at 50 per cent.

In a press statement, Jakpat Head of Research Aska Primardi explained the reason behind the rising popularity of BNPL, which is attributed to users’ ability to afford daily necessities and lifestyle needs.

“Considering how a single user might run out of salary to spend in less than a month, BNPL comes out as a solution for these users,” he said.

Also Read: Fintech funding in Southeast Asia hits a five-year low in 2023

Greater financial literacy in Indonesia

Another element that the survey looked into was user behaviour, particularly how Indonesian fintech service users view financial planning. It revealed that two-thirds of users have an understanding of the importance of financial planning and its role in achieving life goals.

Half of the respondents also saw savings and investments as relevant to their lives today. Of these respondents, 28 per cent believed that saving is the best option for the time being, while 10 per cent admitted to not having the budget to save.

“More than half of the respondents have a good understanding of the importance of financial planning. Half of them are also aware of the importance of having emergency funds, savings, insurance, and even investments,” Primardi said.

For investments, the most popular products owned by the respondents are mutual funds (42 per cent), deposits (36 per cent), and shares (32 per cent).

—

Image Credit: RunwayML

The post Report: BNPL remains popular amongst Indonesian fintech services users appeared first on e27.

On January 09, Singapore-based growth equity investment firm Asia Partners announced the final close of its second fund at US$474 million, which is 23 per cent larger than the inaugural US$384 million fund. With the final close of Fund II, Asia Partners has reached US$1 billion in assets under management.

In an interview with e27, Asia Partners – which has backed well-known names like ShopBack and Doctor Anywhere –sheds light on its optimism regarding Southeast Asia’s thriving tech ecosystem amid global IPO hurdles. With seven new publicly traded tech companies surpassing a US$1 billion market cap by 2022, well ahead of their 2019 prediction, Asia Partners explores the unique factors propelling the region’s entrepreneurial and innovative surge.

The interview with Nicholas A. Nash, Co-Founder and Managing Partner, delves into the firm’s investment strategy, targeting sectors with untapped public company potential. Additionally, it highlights the significance of employee and advisory board involvement and addresses the fund’s approach to Southeast Asia’s diverse markets.

Edited excerpts:

Given the challenging environment for IPOs and fundraising globally, what factors contribute to Asia Partners’s optimism about SEA being a “golden age of entrepreneurship and innovation”? How does the firm plan to navigate the current market conditions?

We have shared a perspective on this important question for several years in our roughly annual Southeast Asia Internet Reports.

Also Read: Asia Partners’s maiden fund hits final close at US$384M

There are multiple mutually reinforcing data points that help drive our constructive view of Southeast Asia’s potential.

For example:

But, probably the most interesting data point is this: In 2019, we formally predicted that by 2029, there would be at least ten more publicly traded technology companies from Southeast Asia with at least a US$1 billion market capitalisation. By the end of 2022, there were already seven new ones — well ahead of schedule for our prediction.

This is not to say that every year — between 2019 and 2029 — will be equally conducive for IPOs. The IPO markets tend to follow a roughly three- to four-year cycle between over-valuation and under-valuation. The periods of over-valuation tend to lead to periods in which IPOs are harder, which then gradually melt away to periods where IPOs resume.

Technology companies from Asia with at least US$25 million in gross profits tend to be qualified to become public companies. Southeast Asia is home to a meaningful population of such companies – some of which we are grateful to have in our portfolio.

Asia Partners targets investments of US$20-100 million per deal. Could you elaborate on the specific sectors or industries within the region the fund is particularly interested in and why?

We find that Southeast Asia is closely following the pattern of China, which had its first technology IPO in the mid-1990s and then built an extraordinarily successful ecosystem over the next three decades:

A similar pattern is unfolding here in Southeast Asia, albeit roughly a decade shifted in time:

We are interested in investments across many of these rows. Still, we are particularly interested in rows where there is not yet a public company from Southeast Asia or not yet enough public companies from Southeast Asia. Our portfolio thus far closely mirrors that approach.

Interestingly, over 9 per cent of Asia Partners II’s capital is from employees and advisory board members. Could you share more about the significance of their involvement and how it aligns with your vision for the fund?

It is all about alignment. We want the vast majority of our savings to be in the same investments we make on behalf of our global limited partners.

Southeast Asia is known for its diversity in terms of languages, consumer preferences, and regulations. In what ways does Asia Partners plan to address or navigate these challenges as the fund continues to make investments in the region?

Southeast Asia’s diversity lends itself to two frequent ‘go-to-market strategies’ we find entrepreneurs pursuing. In strategy 1, the company focuses primarily on Indonesia, and in strategy 2, it focuses on the region, but often from a ‘home base’ in Singapore or occasionally Malaysia.

Also Read: Fintech funding in Southeast Asia hits a five-year low in 2023

We are very interested in seeing whether a third strategy will emerge over time, focused on single countries other than Indonesia, particularly as the GDP of each of the other five major economies grows.

With US$1 billion in assets under management, what are the fund’s outlook and plans for the coming years? Are there new initiatives, partnerships, or focus areas that Asia Partners is exploring for future growth and impact in Southeast Asia?

For several years, going back to our first Asia Partners Internet Report in 2019, we have been quantifying the Series C and D gap for technology growth equity in Southeast Asia.

Our strategy, again as articulated in our roughly annual Internet Reports, has remained quite consistent since our inception and is grounded in three core pillars:

•  The long-term growth potential of Southeast Asia, a region with almost 10 per cent of the world’s population, and Southeast Asia’s increasing economic connectivity to the rest of Asia and the world.
•  The rapid growth of innovative technology and technology-enabled businesses in the region, many of which are platforms with pan-regional or global aspirations.
•  The scarcity of growth equity capital for these companies, particularly in the US$20 million to US$100 million investment size range, often described as the ‘Series C/D gap’ between early-stage venture capital and the public capital markets.

Observing how these three pillars interact and intersect – and, most importantly, evolve – has fascinated us greatly. For example, three themes which we have discussed in our Internet Reports, which we might highlight as interesting developments over the years, include:

• The increasing inter-connectivity of Southeast Asian companies with the rest of Asia, and indeed the world. Companies like Singapore-headquartered Shopback now operate in a dozen countries across three continents. SCI has operations across Southeast Asia and China, and RedDoorz derives virtually all of its revenues from Southeast Asia but has important technology development capabilities in India.
• The rising importance of enterprise software as an investment theme in Southeast Asia. We see enormous potential here, amplified by Singapore’s role as the ‘commercial capital of Asia’, as measured by the number of people on LinkedIn who have Asia, APAC, or Asia-Pacific in their job titles.
• The increasingly important role Southeast Asia is playing, and will continue to play, in the global semiconductor value chain.

The post Asia Partners bullish on SEA’s tech potential despite global IPO challenges appeared first on e27.