M-DAQ Global, a Singapore-headquartered fintech group, has completed the acquisition of Easy Pay Transfers, a licensed B2B payments service provider based in Malaysia.

This acquisition will bolster the Singaporean firm’s local payment capabilities in Malaysia, creating synergy with its existing B2B solutions for foreign exchange and cross-border payments.

Also Read: A new breed of fintech payment is here to slay the game

With this acquisition, M-DAQ Global is now present in seven countries and territories and serves nearly 39,000 clients worldwide.

Licensed under the Money Services Business Act 2011 in Malaysia, Easy Pay Transfers provides businesses with online payment services. As companies expand their customer and supplier channels across the Asia Pacific region, the Singaporean fintech firm aims to facilitate seamless cross-border transactions across regional currency corridors.

Jared Ang, founder and CEO of Easy Pay Transfers, said: “This deal signifies our united aim to expand our market reach across Southeast Asia and foster greater ease of conducting business.”

M-DAQ Global empowers businesses and individuals in cross-border transactions by providing a holistic suite of cross-border FX and payment solutions.

Also Read: M-DAQ raises funding from Samsung

In 2022, M-DAQ acquired Wallex, a B2B cross-border payments provider in Singapore, Indonesia and Hong Kong.

The firm is backed by international institutions, such as Affinity Equity Partners, Ant Group, EDBI, NTT Communications, and Samsung.

The post M-DAQ acquires Malaysia’s Easy Pay Transfers for ASEAN expansion appeared first on e27.

Shares 101: Understanding shares ownership and investment

Shares are legal rights that represent a shareholder’s stake in a company. In addition to shares subscription, a company may also issue warrants (i.e. an investment instrument which grants an option to the holder to convert the warrants into shares), but we won’t cover it in this post. 

It is common for a company to issue different types of shares, as each type of shares provides different rights to its shareholders. The type of shares that can be issued by companies are usually governed by the company law depending on where your startup is domiciled.

Considering that traditional bank loans are out of the question, for most startups, the usual way for founders to raise funds in their company is to sell the equity stake in the company in exchange for cash. In exchange for the new capital, the company will issue new shares, either ordinary shares or preference shares, to the investor, who will be a new shareholder in the company. 

Consequently, deciding on the investment shares is crucial for making informed capital-raising decisions.   

Also Read: Laws, capitalism, creators and AI

This table summarises the key differences between ordinary and preference shares.

What are ordinary shares?

Ordinary shares (or ‘common stock’) represent the equity stake in a company. As a founder, founders’ shares are typically issued when a startup is formed before any equity is purchased by future investors or VCs. Ordinary shares confer voting rights, allowing the ordinary shareholder to influence the company’s direction. 

However, in terms of financial returns, company law ranks ordinary shareholders at the absolute bottom of the order of priority. Dividends, if any, are paid out only after all other obligations, including those to creditors and preference shareholders, are met before any distribution may be made to the ordinary shareholders.   

Prior to a capital raising exercise, a company’s shares capital may initially consist of ordinary shares held by the founders and angels.

What are preference shares?

A preference share (also called ‘preferred stock’) is a class of shares which offers its holders a more secure position. These preference shares usually come with preferential rights, such as priority in receiving dividends and asset distribution in the event of a liquidation. 

Also Read: The secret sauce of de-risking early-stage venture capital

In our experience acting as the law firm for VCs at Izwan & Partners, VCs usually insist on “watertight” agreements that seek to mitigate the risks they take with their investment (as VCs are expected to finance unproven companies). 

For instance, although company law states that preference shareholders by default may not have any voting rights, most or all holders of preference shares expect to have voting rights. Additionally, preference shareholders may yield influence through clauses like reserved matters, anti-dilution protection, and board representation. 

When negotiating a preference share issuance, founders should consider the following matters:

• Investor category: Generally, if the investor is a financial investor (i.e. a professional investor that deploys capital on a professional basis) like VCs and corporates, you may expect preference shares to be the default investment instrument. 
• Valuation: The company’s valuation will affect the conversion price of preference shares into ordinary shares. The conversion ratio formula is usually agreed upon at the time of the investment and is based on factors such as the preference share’s issue price, conversion price, or a predetermined formula. For instance, if the conversion ratio is set at 1:1, each preference share is converted into one ordinary share.
• Liquidation preference: As a VC, liquidation preferences allow for some form of capital protection for its capital investment. In the financial context, liquidation preferences are usually expressed as a multiple of the original investment. The “1x” means a VC will get a dollar back for every dollar invested, a full recouping of their money (in practice, the entire scenario only works on the basis that there’s enough cash to cover this, while ordinary shareholders will receive what’s left — if there is money left over of course).
• Exit strategy: A VC usually investment holding period in an investee is between two to five  years. Therefore, the founders’ exit plans (IPO, acquisition) would need to be aligned with the preference share structure. 
• Control: The level of control founders wish to retain will impact voting rights and other governance provisions, such as negotiating a set of reserved matters (i.e. actions that the company must not do without the approval of the investor) that will not stifle the daily operations of the business.

A startup lawyer can help you go through the term sheet to ensure that all the investment terms are industry standard terms, and help you negotiate (as you are usually at the highest negotiating point during the term sheet in contrast to subsequent rounds when the definitive documents are being prepared usually by the investor’s lawyer). 

Final thoughts  

Ordinary shares, while carrying voting rights, offer limited financial protection to the holders. As an investor, preference shares offer a range of benefits, including dividend preferences, liquidation preferences, in addition to the existing contractual rights such as anti-dilution protection and reserved matters. While preference shares offer greater flexibility when it comes to structuring the shares issuance, it can also be complex and confusing to structure due to the wide range of features available. 

As a founder, engaging a startup and venture lawyer as early as possible prior to your capital raising exercise can help you ensure that you’re aligned in terms of your investment expectations when dealing with investors while complying with the applicable securities laws. 

—

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 Pro

The post The essential guide to shares for startups: Ordinary vs preference appeared first on e27.

Aleta Planet, a Singapore-based company providing cross-border payment services for businesses in the Middle East, has secured undisclosed investment from National Pulse, a Dubai-based company focused on tech-driven businesses.

The investment will allow the fintech firm to expand its footprint in the UAE, Middle East, and Africa.

Also Read: Cross-border payments: Can incumbent banks compete with fintechs in Asia?

Dubai will henceforth serve as Aleta Planet’s global headquarters, while the Singapore office will support expansion in the Southeast Asian region.

Aleta Planet founder and Group Chairman Ryan Gwee said: “This investment by a savvy investor with deep experience and contacts in the Middle East, will super-charge our efforts to expand B2B payments in the region as well as the global markets of China, Africa and Europe.”

The startup plans to establish a joint venture with National Pulse to focus on B2B cross-border transactions, initially targeting the Middle East’s agri-trade and logistics sectors.

Founded in 2014 by former banker Gwee, Aleta Planet aims to simplify online, cross-border and multi-currency transactions. Its network lets individuals and businesses deposit local currencies in 39 countries or remit funds to 140 countries. In addition, it provides merchant acquisition, card issuance, remittance and B2B payments.

The company, licensed by the Monetary Authority of Singapore, also has offices in Hong Kong, Dubai, Spain, and Malaysia.

Mohammad Bin Markhan Al Ketbi, founder and Group Chairman of National Pulse, said: “Aleta Planet’s innovative and transformative technologies are reshaping how cross-border transactions are managed. Their expertise in handling multi-currency transactions will greatly enhance our upcoming digital solutions, set to revolutionise the international trade and digital economy landscape.”

National Pulse invests in and partners with companies that provide innovative technologies to support the digital transformation for a swathe of traditional businesses in financial services, education, healthcare, agriculture, commerce, etc. It also runs the NatOne Venture Accelerator
Programme to help young companies navigate new markets and seek high-potential opportunities.

Also Read: Huawei Pay joins hands with Aleta Planet to introduce NFC, QR code payments for S’pore users

The investment in Aleta Planet comes when the market for financial technology in the UAE is poised for growth and is projected to expand at double-digit rates in the coming years. The UAE is ranked as the leading fintech hub in the Middle East and Africa regions, with funding jumping 92 per cent to US$1.3 billion in 2023, in contrast to a global decline in funding for the sector, according to Kapronasia, a consulting firm on payments, banking and capital market industries in Asia.

—

The post UAE firm invests in Singapore’s cross-border payments startup Aleta Planet appeared first on e27.

As AI technologies continue to advance in Southeast Asia, it is crucial to address the social considerations surrounding their development and implementation.

As part of e27‘s flagship conference, the Echelon X panel discussion, titled ‘Responsible AI in Southeast Asia: How do we go about it?’, delved into a conversation on the ethical and societal implications of artificial intelligence (AI) adoption in the region.

Moderated by Scott Bales, Keynote Speaker and Thought Leader at ODE Management, the panel featured esteemed speakers:

• Niki Luhur, Group CEO, Vida Digital Identity
• Jayotika Mohan, APAC Head of Startups & SMB, Google Cloud, Google
• Yasunori Kinebuchi, Director, NTT
• Sau Sheong Chang, Deputy Chief Executive, Product and Engineering, GovTech Singapore

The panel discussion explored the nuances of responsible AI, highlighting the importance of ethical guidelines, transparency, and accountability in AI development and deployment. It underscored the need for a balanced approach that maximizes AI’s benefits while mitigating potential risks and ensuring that technology serves society’s greater good.

—

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

The post Echelon X: Responsible AI in Southeast Asia: How do we go about it? appeared first on e27.

In a recent conversation with e27, Anchanto CEO Vaibhav Dabhade discussed the recent trends in the Southeast Asian e-commerce sector and changes since the COVID-19 pandemic. He focuses on the end of the era of supply-led growth in e-commerce.

“What we have seen in the last two to three years is that the inflexion point has been reached,” he begins.

“So, today, the supply-led growth is very much finished. The actual growth of e-commerce is where we are currently, where it is largely driven by consumers’ choices. The demand-driven e-commerce growth phase that we are in today is much slower than when it was supply-driven. We are at the point where e-commerce is becoming more predictable, but we can assess and forecast much better.”

Dabhade also notes that after a period of cash-burning by brands and e-commerce platforms to generate demand through promotions, they have finally toned down to a level of normalcy. “Discounts are getting to a normal level; we also started to see that spending has become much more realistic. Many small businesses survived post-pandemic, but brands that were grown solely by discounts did not.”

“Marketing-led correction has not had a good time since the pandemic.”

Also Read: Ecosystem Roundup: Anchanto raises US$12M; MAS earmarks US$182M more to boost fintech innovation; How Tiki manages to keep employee churn rate healthy

Responding to these changes, Anchanto shifted its focus to adapt to changing market conditions. The e-commerce and logistics solution provider now focuses on the mid-market and enterprise segments of its customers.

To deliver high-quality service, Anchanto educates its customers about the importance of paying a worthy price. “When you start to go with platforms purely driven by discounts, you end up paying more in the long run. Many brands also realise that when they use a logistics company and cheap software, they will eventually struggle. They can’t scale … as they don’t get the needed expertise and depth.”

“This is why we are very cautious about price points. To whom do we sell? How do we sell? At what price point? We’ve been more selective about that lately.”

There is also a greater emphasis on product functionality, as Anchanto promotes its platform as a tool to provide insights, not just to help with logistics or warehousing.

“We give them a much deeper insight based upon the data we have with us, which is helping them to make better decisions.”

On being a growth stage startup in e-commerce and logistics

In a recent interview with e27, published exclusively for Pro members, Dabhade spoke about the key milestones that Anchanto had achieved recently.

Also Read: Thailand’s APX Logistics nets funding from SBI Ven Capital for Vietnam expansion

Apart from operating in 11 countries, the company hired senior roles and entered unique segments such as the B2B and Muslim commerce segments.

According to the CEO, significant milestones that Anchanto has made include hiring senior roles that it has been expecting to do for a long time, such as a Chief People Officer and a Chief Product Officer. It has also acquired customers from specific segments, such as the B2B and Muslim commerce segments.

“We see good tractions coming from the Muslim fashion industry in Southeast Asia,” Dabhade says.

Having raised a US$12 million Series C funding round in 2020 from MDI Ventures and Ascendia, Anchanto claimed to have achieved profitability even back then.

“We are super proud that, in 2023, we grew Anchanto by 42 per cent. We are very, very proud of delivering that level of growth in the current economic situation,” Dabhade says.

“We believe this shows that we are on the right track and can grow further. In a lackadaisical market situation, our business model is working.”

—

Image Credit: Anchanto

The post As spending becomes realistic, SEA e-commerce is now driven by consumers’ choices instead of supplies appeared first on e27.

Decentralised Physical Infrastructure (DePIN) is set to become a US$1+ trillion sector over the next decade. Retail users, both merchants and consumers, will benefit the most from this growth. 

Projects like BitTorrent and Tor showed the power of decentralised resource-sharing systems. Emerging DePIN networks are building on this foundation. But their scope is much bigger now, thanks to blockchain, cryptography, and AI. 

Today, a few giant corporations have disproportionate control over the world’s data, as well as hardware and computational resources. One, this is risky, as the recent Microsoft outage showed. 

Two, it’s unfair to the grassroots entities who are the producers of monetisable data and consumers of hardware. They are the real source of value in this sense. 

DePIN can fix this and catalyse a paradigm shift. Users can monetise excess computational or hardware resources or, say, their vehicles’ data. Merchants can accept crypto payments through blockchain-native PoS machines. 

Through all these, retail entities can be more direct, autonomous participants in the phygital economies of the future. DePIN, the Great Democratiser (or access/opportunity equaliser), has thus also been one of the leading crypto narratives in 2024. 

DePINs are here to thrive

Though still nascent, the DePIN ecosystem has both negative and positive forces working in its favour. On the one hand, the downsides of hardware and software monopoly are becoming increasingly visible even to average users. 

There was no need for thousands of people and businesses to remain stranded for hours, losing hundreds of thousands of dollars. This situation would not arise if the world ran on decentralised infrastructure with in-built redundancy and resilience. That’s DePIN’s significance by negation — it is what legacy infra is not. 

As for the positive side, it opens many unprecedented avenues to become valuable in its own right. While seeding torrent files to support peer-to-peer downloads has been possible for years, it does not bring any monetary gains for seeders. DePIN changes that enable incentives over and above goodwill or ideology. 

Also Read: Securing the future: Transforming industries through blockchain’s immutable ledgers

That also means DePINs make monetary incentives for resource contributions the norm and not a choice. Moreover, using DePIN networks makes individuals resistant to censorship and manipulation, especially in crisis times. 

For instance, it’s pretty impossible to execute an internet blackout by shutting down a decentralised WiFi network. Because here, the supporting physical infra — modems, routers, etc. — are distributed across a wide geographical region and are not situated in a single, identifiable, and stoppable location. 

At the same time, communities can become more self-sufficient and reduce living costs by sharing energy via decentralised grids. Smaller businesses can also hedge against depreciating local currencies by using stablecoins or crypto for day-to-day transactions. 

The possibilities are endless. That’s why over 17 million DePIN devices are already in action worldwide, and the sector’s market cap has crossed US$24 billion within a year or two. 

Further, AI’s rapid growth is a strong external catalyst for DePIN’s upcoming growth both on the demand and supply sides. From decentralised compute marketplaces to smart AI-powered sensors, these two are made for each other, so to speak.  

Overall, DePIN is not merely here to stay but to thrive. But like any booming, there is a need for caution. 

What is DePIN and what is not

Once, every crypto project had something to do with DeFi. Then, they fell for NFTs. AI was the next cool kid on the block. Many others came and went by in the past few years. 

Now it’s DePIN’s turn. It has great promise, and existing projects are already showing decent results. Investors and VCs are very interested in this, as well. So naturally, every other project calls itself DePIN. 

Also Read: The emerging crypto trend of 2024: The intersection of AI and blockchain

While the attention and hype are great from a short-term adoption perspective, it’s important to define and recognise what is DePIN and what is not. 

Simply put, a real DePIN project must build and provide some hardware devices: routers, PoS machines, storage systems, etc. ‘Physical infrastructure’ is in the sector’s name, after all. While this seems trivial and obvious, it’s not so in reality. 

Digital-only projects offering decentralised computation, payment services, etc., often stake claims on the DePIN fame. And while they may have great products to offer, they are not DePINs. 

Moreover, DePIN projects must implement distributed governance models based on hardware ownership. Network participants must receive substantial monetary incentives for their contributions. 

DePIN is a fairly new paradigm and recognising its core differentiators from the get-go is important from a long-term growth and stability perspective. 

Last but not least, it’s essential that retail users get a clear sense of why this matters to them and why they must care. 

Although not a ‘number go higher’ game in the literal sense, more retail participation is the key to stronger, more robust DePIN networks. And unlike in legacy setups, it’s best if participants know their stakes as well as duties. Because autonomy without knowledge is incomplete.

—

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 Pro

The post The great democratiser: DePINs’ biggest benefactors are retail data and physical resource owners appeared first on e27.

Since the end of the Civil War in 2009, Chalinda Abeykoon has been instrumental in shaping Sri Lanka’s startup landscape. He designed the first government-funded incubator, Spiralation, and launched the equity crowdfunding platform Crowd Island. He later joined the Lankan Angel Network, where he, as the CEO, helped attract significant investment, including international investors, to support local startups.

Today, as a Managing Partner at nVentures, a VC fund based in Singapore, he continues to empower entrepreneurs across South Asia.

In this interview, we explore Abyekoon’s experiences, insights, and unique aspects of Sri Lankan entrepreneurship. The conversation offers valuable perspectives on the past, present, and future of entrepreneurship in the island nation.

Edited excerpts:

How long have you been involved in Sri Lanka’s entrepreneurship scene? What initiatives did you take in your initial years? What inspired you to launch nVentures?

I have been involved in Sri Lanka’s entrepreneurship scene since the Civil War ended in 2009. I first joined the government as part of the ICT Agency of Sri Lanka, the apex body at the time, fully funded by the World Bank and under the Presidential purview.

ICT Agency provided small grants to encourage people to start companies because, at that time, we didn’t have an entrepreneurial culture due to the war. People either wanted to leave the country or join one of the existing large corporates and conglomerates.

As the project coordinator, I launched and ran Spiralation for about four and a half years, supporting over 30 companies. I travelled extensively, visiting every state and private university to promote entrepreneurship and organise meetups. We had to encourage people to gather and share their ideas, as there was no existing meetup culture. I was also part of the first Startup Weekend in India, participating in Mumbai, while my friends attended in Bangalore. We held similar events in Sri Lanka.

From 2010 to 2014, there was growing interest in entrepreneurship. By 2014, people were eager to start companies and explore new opportunities.

I then joined Disrupt Unlimited, a fully-owned subsidiary of Brandix, one of the largest apparel manufacturers in the country. It accounts for about 2-3 per cent of GDP and has over a billion dollars in revenue.

Also Read: Small market, big dreams: Meet the 30 Sri Lankan startups that are punching above their weight

At Disrupt Unlimited, I raised a million dollars to invest in technology companies building solutions for the clothing industry. We identified key areas like supply chain and product innovation, provided market insights and customer problems, and invited entrepreneurs to build solutions. We invested in about four or five companies and ran the programme for about two to three years.

As the startup scene grew, companies struggled with angel funding, which was still new. I exited Brandix and, with a few others, launched Crowd Island, an equity crowdfunding platform. We helped companies with pitching and campaign launches, raising about US$700,000, primarily from overseas Sri Lankans. We were profitable, supporting around 10 companies.

In 2019, we faced significant challenges, including the Easter Sunday attacks and a political coup in 2018, which affected our business. The primary source of capital, the Sri Lankan diaspora, became hesitant. By this time, I had accumulated considerable experience.

I was then invited to be the CEO of the Lankan Angel Network (LAN). I joined the LAN in December 2019, attracted about 100 investors, and created the Angel Fund, pooling standard flat amounts from investors.

All investors were Sri Lankans, 30 per of who lived overseas. We deployed the fund to about four or five companies.

In 2020, I took a break and went to Oxford University. Upon returning, I partnered with Imal Kalutotage and Ashok Verma to launch nVentures, a regulated VC fund with a license from the Monetary Authority of Singapore (MAS).

I joined as a managing partner in July, and over the past 24 months, we have made about ten investments in India, Bangladesh, Sri Lanka, Singapore, and the UK.

Why did you incorporate nVentures in Singapore, not in Sri Lanka?

My partners Imal Kalutotage and Ashok Verma have extensive experience in technology, having held regional roles at IBM, Cisco, and HP while based in Singapore. They launched a startup in 2014, which was acquired for around US$15 million, the largest acquisition at the time by a Singaporean soonicorn.

We learned that while product development could happen in Sri Lanka or other locations, having headquarters in Singapore would provide strategic advantages. Singapore offers excellent regulatory governance, a straightforward framework, and a robust operational model.

Ashok is originally from India but has lived in Singapore for the last 20 years. Imal returned to Sri Lanka in 2014. Our strategy leverages the best of both worlds: high-end talent and a great place to build products in Sri Lanka, combined with the regulatory and business benefits of Singapore.

Sri Lanka’s tech industry is really old. How were the early years of the startup scene in the country, and what challenges did it face?

Before 2010, Sri Lanka didn’t have an ecosystem. We had a few companies like Virtusa, WSO2, 99X, and MIT, which built the world’s fastest stock trading platform, later acquired by the London Stock Exchange. However, these were isolated successes driven by individual teams.

The real ecosystem started to emerge around 2010 after the Civil War ended. The major challenge then was encouraging people to start companies, as most aspired to be doctors, lawyers, or engineers. A significant mindset shift was required.

Additionally, there was no culture of sharing knowledge or collaborating outside one’s circle, which is essential for building companies. Software engineers needed to work with business professionals, and fostering community collaboration was a primary challenge.

Another challenge was that early startups were solving problems specific to Sri Lanka, a small market that limited scalability and investor interest. Many successful companies from that era bootstrapped without raising capital and are doing well now.

Currently, we’re in phase three, where Sri Lankan entrepreneurs are solving regional or global problems using local talent, often with an international focus. The pandemic and other factors have accelerated this trend over the last five years.

There are quite a few problems in Sri Lanka for entrepreneurs to solve. What kind of problems did you see initially, and how was the initial interest from entrepreneurs?

Sectors like agriculture, fintech, and education are prime areas right now. We are still early in these spaces. I specifically focus on fintech, but there’s also significant potential in agriculture.

For example, 50 per cent of Sri Lanka’s land is used for agriculture, but its contribution to GDP is only about 6 per cent, so there’s a lot of room for optimisation. We don’t need to reinvent the wheel; we can take lessons from India, Bangladesh, and other parts of the world to move up the value chain and create opportunities.

There’s also a ton of potential in education. In my personal view, the biggest opportunity lies in the B2B segment, regardless of the vertical.

In the past, e-commerce was nascent. The first significant exit was a company called Anything.lk, which was a mix of Groupon and e-commerce. It was acquired by Wow and then acquired by Dialog, the leading telecom company in the country. Now, we have Daraz, which has kind of taken over that space.

What makes Sri Lankan entrepreneurs unique?

Sri Lankan entrepreneurs are extremely resilient and resourceful, shaped by decades of civil war and political uncertainties. This has made them adept at finding innovative solutions despite challenging circumstances. While many consume information from the US and aspire to the flashy, rock-star image of entrepreneurship, we prefer those who are more grounded.

Though smaller than India, the Sri Lankan market offers substantial opportunities due to higher disposable incomes and per capita GDP. This makes it a good market to validate products and develop MVPs. Sri Lanka offers a quality of life and business environment similar to Singapore, making it attractive for startups.

How did local entrepreneurs initially survive without much capital?

There was always a small community of angel investors. However, many early entrepreneurs were encouraged to bootstrap. If you look at South Asia, including India, our economies post-independence grew based on labour arbitrage. The value proposition was to outsource work to us because we could do it cheaper and better.

India is now ahead by about 10-15 years, having moved beyond this model. Large industries like tea, apparel, and tourism in Sri Lanka and similar sectors in Bangladesh and Pakistan heavily relied on labour arbitrage. But now, people don’t want to be low-cost workers. You don’t need a formal education to gain skills; people can learn coding and other skills through resources like YouTube.

This shift creates opportunities for automation, digitisation, and IoT in large organisations. Many of our successful exits were based on products built for these traditional industries. Because of our deep domain expertise, we have a strong foundation for B2B opportunities.

For instance, Sri Lanka’s contribution to the apparel industry is significant. Brandix, a Sri Lankan company, has created the Brandix Apparel City in Vizag, India, which is an entire village converted into an apparel manufacturing hub.

Do you think the startup industry will significantly impact the GDP in the coming years? How is the government supporting this growth?

Absolutely. The government is supporting the startup industry, and initiatives like the recent conference are a testament to that. There’s always the notion that the government can do more, and people will always feel that way in any country.

Personally, I believe in taking the initiative rather than waiting for the government to act. I’ve been fortunate to receive support from Sri Lankans living overseas, and we don’t heavily depend on the government. However, when the government organises events like this conference, they are very much involved.

Top ten verticals in Sri Lanka

How supportive is the corporate sector?

The corporate sector engages in some acceleration programmes and other supportive activities. However, I haven’t worked closely with the corporate segment in the last four to five years.

Our strategy has been to identify promising companies, help them set up in Singapore, build their products, and take them regionally from day one. Most of our network is now based in Singapore and its surrounding areas.

But does setting up in Singapore make sense for Sri Lanka from an economic point of view?

Absolutely. Dealing in dollars makes a lot of sense for many of these companies. Working with international clients brings significant value to the economy, as it generates foreign currency and allows employees to earn dollars or other foreign currencies.

Also Read: Climate champions in the making: Meet Southeast Asia’s 30 rising stars in cleantech

This strategy facilitates regional expansion much faster. Building a company is hard everywhere, be it in India, the US, or anywhere else. Despite the support from ecosystems, government, or private sector, it’s always challenging. So, if you’re going to play the game, it makes sense to aim for a bigger market. It’s like playing cricket; you can play on the streets, but aiming for the World Cup is where the real value lies.

Which Sri Lankan cities have the highest concentration of startups?

There are 885 startups spread across Sri Lanka. For this conference, we had startups from 18 or 19 out of the 25 districts in the country. We selected the 50 best startups from about 1,000 companies, and they came from various regions.

Colombo is the primary hub, much like Bangalore or Mumbai in India. The second largest city with a growing startup presence is Jaffna, close to Kerala. However, great companies can emerge from anywhere, even in areas without a robust ecosystem.

For example, we’ve invested in companies from Kuliyapitiya and Bandarawela, both of which are far from Colombo and lack established ecosystems.

In an article, you mentioned there is a need for local founders to develop sales acumen. What initiatives are you undertaking to address this gap?

With our portfolio companies, we work closely with the Sri Lankan diaspora, particularly those who left in the 1970s and 1980s and are now our investors. We connect these investors (LPs) with our portfolio companies to share their knowledge and expertise. We also run curated workshops specifically for our portfolio companies.

For instance, we focus on the fintech market, helping companies understand how to sell products to banks and telcos, which are the major customers. This approach helps build in-house knowledge and sales acumen essential for engaging with these large clients.

—

Image Credit: nVentures.

The post 🇱🇰 From civil war to innovation: nVentures’s Chalinda on the rise of Sri Lanka’s entrepreneurship appeared first on e27.

While each startup has its own culture, there is also an overarching startup culture. Founders who launch their own ventures inevitably find themselves falling down this rabbit hole, despite their best intentions.  

Some caricature startup culture is hustle porn, but it’s much deeper and more multifaceted than simply glorifying the grind. I would like to single out some of the pillars of startup culture so that founders can focus more on business activities that actually move the needle.

Conflating pitching with business-building

Pitching is an essential part of any startup. Founders must pitch potential employees, users, customers, investors, and in more regulated spaces, government stakeholders. Because pitching is a fundamental part of founder work, they often conflate pitching competitions with actually conducting business. 

Make no mistake: Pitching competitions are not venture-building, even if the judges may be investors or there are monetary prizes at stake. Pitching competitions are artificial constructions — that’s why many of them have a theme (i.e. such as only startups from a certain industry or that use a particular technology) that act as constraints that do not occur in the real world. To wit, most investors do not limit what pitches they receive by vertical or technology – they only care about the best businesses, period.

Also Read: Amidst funding slowdown, these 5 Vietnamese tech startups inspire hope for the rest of the year

Pitch competitions may indeed be exhilarating, but they are distinct endeavours from building a scaleable and successful business. 

Selling cultures that only exist on paper 

Every founder has an idealised version of their product or service — what it would look like if they had infinite resources in time, money, and manpower. In much the same way, founders also have idealised versions of their own culture.

When recruiting early employees and even other co-founders, founders tend to sell this idealised version of their own culture, which may be far different from what is happening on the ground. For example, one founder might preach about a flat structure, when, in reality, the company is micromanaged through him. Another might harp on team-buildings and outings that rarely happen in between the grind of building their business.

Although some amount of salesmanship may always be necessary, founders should not recruit employees based on an organisational culture that is a far cry from reality. 

Expecting the same commitment from early employees 

Founders have much larger skin in the game. Even if they have already raised some angel funding or funds from friends and family, they still own a disproportionate amount of equity. As a result, they put extreme amounts of dedication into building the company, knowing that in the event of a liquidity event — such as a buyout from a larger firm — they would profit handsomely.

There is no inherent problem with this structure. Problems only start to occur when founders expect the same unwavering commitment, loyalty, and drive from early employees, even when their rewards are on a different scale. Many early employees may have stock options, but unless your company becomes Google, these will typically not amount to much of anything: Some may have an even better chance of making money by rolling dice at a crap table. 

Also Read: Unlocking the secrets to successful fundraising: 5 essential reads for startup founders

Because there is this mismatch, founders need to have more grace when evaluating early employees: These talents should not be held to the same standards that they hold themselves.

Drowning out the noise 

All of these problems are symptomatic of a larger trend: Founders — like many in this generation — are focused on fanfare and clout. They pitch in competitions to win prizes and get featured in tech publications. They promote a culture that doesn’t exist to make themselves feel good to both potential and current employees. They drive their employees to work endlessly hard because that’s what gets the pat on the back.

Founders, in short, are often much more focused on building their personal brand than their business. The root problem here is often fear. It’s easier to get likes on Facebook, talk about what separates our startups from others, and crack the whip on employees than it is to answer much tougher questions. 

Do we have a compelling minimum viable product? Have we found product-market fit? Do we have the expertise necessary to capture the market before competitors? These questions are considerably tougher because they require introspection, and dare I say, soul-searching, but they are essential if we want to restore course why we began our startup in the first place: To build something great.

—

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 Pro

The article was first published on June 24, 2024

The post Don’t drink the Kool-Aid: Remembering why we build appeared first on e27.

As technology continues to reshape traditional financial services, embedded finance has emerged as a key enabler, allowing businesses to seamlessly integrate financial products and services into their existing offerings.

As part of e27‘s flagship conference, the Echelon X keynote speech titled ‘Moving Together in the SEA Ecosystem through Opportunities in Embedded Finance’ revealed the transformative potential of embedded finance in Southeast Asia’s dynamic business landscape from speaker Siddharth Ravichandran, Group CTO at BigPay, a free money app with a global-use card.

The talk explored how embedded finance is revolutionising industries in Southeast Asia, presenting real-world examples of businesses integrating financial services into their platforms. It highlighted the benefits of this model, such as enhanced customer experiences, new revenue streams, and improved customer retention.

The talk also explored Ravichandran’s work at BigPay, highlighting new product offerings that enhance the embedded finance sector. He claimed BigPay offers the best exchange rates, tracks and categorises expenses, and facilitates local and international transfers, making budgeting and money management easy.

Ravichandran also addressed the challenges and potential solutions, emphasising the need for strategic partnerships and regulatory collaboration to fully realise the transformative power of embedded finance in the region.

—

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

The post Echelon X: BigPay CTO Siddharth on unlocking SEA’s embedded finance potential appeared first on e27.

Dear reader,

Sri Lanka’s startup scene has undergone a remarkable transformation since the end of the Civil War in 2009, evolving from a nascent ecosystem into a burgeoning hub of innovation and entrepreneurship. Chalinda Abeykoon has been instrumental in this growth, spearheading initiatives like Spiralation, the first government-funded incubator, and Crowd Island, an equity crowdfunding platform. These efforts have paved the way for a culture of entrepreneurship, encouraging Sri Lankans to venture beyond traditional career paths.

Abeykoon’s journey reflects the resilience and resourcefulness of Sri Lankan entrepreneurs, who have navigated decades of civil war and political uncertainties. His work with the Lankan Angel Network and nVentures, a venture capital fund based in Singapore, has attracted significant investment to the region, empowering local startups to thrive.

The strategic advantages of operating from Singapore, coupled with leveraging Sri Lanka’s local talent, have positioned nVentures to make impactful investments across South Asia. Key sectors like agriculture, fintech, and education hold immense potential, with startups addressing regional and global challenges.

Sri Lanka’s startup ecosystem is now characterised by a strong sense of community and collaboration, supported by the diaspora and international investors.

The future looks promising, with an increasing number of Sri Lankan entrepreneurs poised to make their mark on the global stage, driving economic growth and innovation.

Sainul
Editor.

—–

NEWS & VIEWS

Indian startups gut valuations ahead of IPO push
The more conservative stance of companies, such as Ola Electric and FirstCry that are set for public listings, reflects the shift in startup valuations as companies adapt to public market scrutiny.

Malaysia’s Khazanah completes acquisitions of MAVCAP, Penjana Kapital
The sovereign wealth fund said it will begin establishing a National Fund-of-Funds (NFOF) with an initial allocation of $216 million to invest in innovative and high-growth startups via venture capital and private equity funds.

M-DAQ acquires Malaysia’s Easy Pay Transfers for ASEAN expansion
This deal will bolster M-DAQ’s local payment capabilities in Malaysia, creating synergy with its existing B2B solutions for FX and cross-border payments; M-DAQ now has a presence in 7 countries and territories and serves 39K clients worldwide.

Vietnam’s VinFast expands to the Middle East
The opening of its first Middle East showroom in Oman marks a significant milestone in its expansion into the Middle East market; The showroom offers sales for VinFast’s smart electric vehicles, including the VF 6, VF 7, VF 8, and VF 9.

Beep secures US$3.3M to expand interoperable EV charging network in Thailand, Malaysia
The investors include Granite Asia, Farquhar VC, SUTD Venture Holdings, and Wing Vasiksiri; Beep owns and operates Voltality, an integrated ecosystem of charging stations, payment services, and vehicles.

Thailand’s APX Logistics nets funding from SBI Ven Capital for Vietnam expansion
The logistics-tech startup, which expanded into Malaysia, Singapore, and Europe in 2024, is gearing up to extend its digital less-than-truckload network into Vietnam by 2025.

UAE firm invests in Singapore’s cross-border payments startup Aleta Planet
The investor is National Pulse; Aleta Planet will expand its footprint and accelerate its B2B payments expansion efforts in the UAE, Middle East, and Africa; The startup plans to establish a JV with National Pulse to focus on B2B cross-border transactions.

Hong Kong’s Pichi Finance raises US$2.5M in seed funding
UOB Venture Management, Signum Capital, and Mantle Network are the lead investors; Pichi Finance is a trustless points trading protocol offering price discovery to tokens pre and post-TGE.

VinFast starts delivering the mini SUV VF 3 in Vietnam
The EV maker said this early delivery significantly contributes to achieving the target of delivering at least 20,000 VF 3 cars this year; In 2024, the company aims to deliver at least 20,000 VF 3 in Vietnam.

Microsoft now lists OpenAI as a competitor in AI and search
In Microsoft’s annual 10K, OpenAI joined a long list of competitors in AI, alongside Anthropic, Amazon, and Meta; OpenAI was also listed alongside Google as a competitor to Microsoft in search, thanks to OpenAI’s new SearchGPT feature announced last week.

Indonesia’s J&T Express launches parcel delivery service in Saudi Arabia
The prosperity of the global digital economy and new business models, such as e-commerce, have accelerated the circulation of goods globally. This has led to unprecedented growth in the personal parcel delivery business in the Middle East.

FEATURES & INTERVIEWS

nVentures’s Chalinda on the rise of Sri Lanka’s entrepreneurship
Sri Lanka’s entrepreneurs are extremely resilient and resourceful, shaped by decades of civil war and political uncertainties, says Chalinda.

Why SEA lags India in quick commerce race
The key to Indian quick commerce firms’ success is that the players have expanded beyond groceries and FMCG to offer a wider range of product categories; Quick commerce has become a top-of-mind option for grocery shopping and daily needs in India.

Climate champions in the making: Meet Southeast Asia’s 30 rising stars in cleantech
Startups in this space focus on renewable energy, waste management, water conservation, sustainable agriculture, and carbon credits.

As spending becomes realistic, SEA e-commerce is now driven by consumers’ choices instead of supplies
According to Anchanto CEO Vaibhav Dabhade, the supply-led growth era of e-commerce is “very much finished” today.

Echelon X: Responsible AI in Southeast Asia: How do we go about it?
The Echelon X panel discussion highlighted the ethical and societal implications of artificial intelligence (AI) adoption in the region.

Are startups neglecting the future middle-class population in Philippines?
Big brands are winning the upscale and the super mass markets, but we are yet to service the young population that is quickly turning middle class, says Foxmont Capital.

‘Not all is doom and gloom’: Experts on the potential of AI to steal jobs in SEA
AI isn’t a job destroyer; people need to be more accepting of digital and intelligent technologies and optimise them to perform better in their roles.

Book excerpt: How Durreen Shahnaz finds the inspiration behind her impact investment firm IIX
Durreen Shahnaz chronicles the story behind the founding of impact investment firm IIX and the events that inspired her to start the firm.

How BluMaiden uses AI to transform small-molecule drug discovery
BluMaiden solutions probe the vastness of chemical space within the human body, using AI-guided computational genetics and chemistry.

Meta says India is the largest market for Meta AI usage
WhatsApp’s massive 500 million users in India have supercharged Meta’s AI ambitions; CFO Susan Li said during Meta’s second-quarter earnings call that people have used Meta AI for billions of queries since its launch.

Over 100 VCs pledge support for Kamala Harris
VCsForKamala aims to push back against the notion that Silicon Valley has largely embraced former President Donald Trump. On the other hand, Elon Musk, Marc Andreessen, Ben Horowitz and David Sacks have endorsed Trump over the past few weeks.

THOUGHT LEADERSHIP

Will flexitime become the norm in Southeast Asia?
In light of Singapore’s new flexitime guidelines, it’s time to rethink the traditional nine-to-five work model and embrace agile hiring practices.

The essential guide to shares for startups: Ordinary vs preference
This article explains the differences between ordinary and preference shares to help startups decide which to offer during capital-raising.

The future of medtech in Singapore: Innovation amid regulatory challenges
The future of medtech in Singapore is bright, but only if we continue to innovate and adapt to the regulatory landscape.

From hype to habit: Building a startup hyper-focused on retention
Startup founders should see a sale not as an endpoint but as the first step in satisfying, retaining, and growing each customer.

Decoding PR: The essential tool for tech startup success
Every startup needs PR, and starting early is crucial because PR is a marathon, not a sprint; be prepared before you need it.

Embracing clean beauty: A path to conscious consumerism and sustainability
Clean beauty, as a subset of sustainability, focuses on using safe products for both the body and the environment.

FROM THE ARCHIVES

‘The era of easy money is over’: VCs speak of funding winter and exit landscape in Southeast Asia
While the funding winter will continue into H1 2024, SEA remains a bright spot due to its favourable demographics and supply chains shifting to the region.

‘From a cybersecurity perspective, the Asian market still uses legacy tools’
e27 talked to Daniel Bernard, CMO, SentinelOne, which recently launched a US$100M global cybersecurity fund, S Ventures Fund.

Beyond the uber of X: Reimagining on-demand
All across the world and indeed Southeast Asia, consumers are already experiencing the benefits of the next stage of on-demand: information.

Edutech is surging, but here are the 3 issues it is facing
Edutech startup Knovo’s take on three issues that must be addressed to ensure learners can fully benefit from the digitisation of education.

How startups and VCs can propel Indonesia’s energy transition
As Indonesia continues on its rapid path to modernisation, demand for the internet will steadily increase, and so too will its energy needs.

Are large Vietnamese tech enterprises ‘indifferent’ when competing with ChatGPT?
Vietnamese startups have been creating comparable chatbot platforms quite actively ever since ChatGPT was created.

Unlocking angel investing: 6 key steps for making your first investment
In this article, I hope to share several steps that you should consider before cutting that first cheque as an angel.

—

Image Credit: 123RF.

The post Ecosystem Roundup: Sri Lanka’s entrepreneurship is on the rise | Indian startups gut valuations ahead of IPO push | VinFast drives to Middle East appeared first on e27.