Unlike the West, where digitalisation was relatively smooth, Asia stepped into the digital era immediately, putting all of its efforts into mobile technologies. Today, Asia is emerging as a global fintech leader. Here are some reasons behind this.

High-speed action

Perhaps the most distinctive feature of Asian fintech (primarily in South and Southeast Asia) is the rapid pace of its development. This is due to a combination of reasons that complement and reinforce each other. Among the main ones are:

Population

South and Southeast Asia account for a third of the global population. It is young (median of 27.6 years for South Asia, 30.2 years for Southeast Asia), technologically savvy, and eager to expand the horizons of prosperity and consumption.

Low level of financial inclusion

In the Philippines, for example, in 2017, only 32 per cent of the adult population had an account with financial institutions (46 per cent in 2021). For comparison, North America has these figures at 94 per cent and 95 per cent.

Proximity to a COVID-19 epicentre

It was Asia that enforced the strictest pandemic restrictions, which gave the biggest boost to digital financial solutions.

State support for fintech

For many Asian countries, fintech is the only way to fulfil ambitious government objectives. These may include geographical, financial equality (as in the fragmented island Philippines), mass introduction of accounts for the low-income population (Pradhan Mantri Jan Dhan Yojna, India), etc. National initiatives like NFSI, created in this context, are undoubtedly one of the most powerful stimulators of industry development.

Lenient regulation

Asian state support goes hand-in-hand with lenient regulation, which is attractive both to local and foreign players (most investments in Southeast Asian fintech are foreign). Singapore, a macro-regional fintech hub, also has a positive effect, as its legislative initiatives entail changes in other countries as well (as in the case of licensing neobanks).

Also Read: How payment networks are crucial to the rising fintech movement

So what is the current state of things? Thanks to these and other drivers, today it is Asia that is emerging as a global fintech leader in terms of such fundamental indicators as fintech adoption or the volume of core investments, to name some.

Regarding the first, India and China are the world leaders with an indicator of 87 per cent, according to EY. As far as investments in fintech go, the APAC region is on its way to overtaking Europe and America, coming from the KPMG Q1 report.

While the Australian Afterpay does account for most of this momentum, the significant role of SA and SEA in this upper hand is also indisputable, given the successful rounds of Xendit (Indonesia, US$300M), Stashfin, Oxyzo and Slice (India, US$270M, US$237M and US$220M), Voyager Innovations (the Philippines, US$210M), etc.

All in one

The faster fintech develops in Asia, the brighter and richer the local digital landscape becomes. That leads to the further spread of digital financial services. Fintech solutions are being integrated into more and more areas of life, becoming more complex and capacious.

An important point to keep in mind is that, unlike the West, where digitalisation was smooth through the gradual development of a personal computer, the Internet, etc., Asia stepped into the digital era immediately, concentrating all its attention on mobile technologies.

As a result, there came an absolute climax of fintech development, also a strictly Asian phenomenon, the superapp boom. Grab (Singapore), GoJek (Indonesia), Paytm (India), Zalo (Vietnam) and many other digital platforms are definitely on the rise.

From taxi hailing to getting a visa, from paying a utility bill to dating, from online shopping to calling a plumber: the Asian population is increasingly bringing every day realities together into a single interface on their smartphones.

Of course, financial universalisation is also present in the West. However, there is another key feature that differs fintech in Asia. The existence of developed ecosystems that synergise with offline realities in Asian countries, the so-called phygital environment.

For example, they enable purchases not only through an app-integrated mobile wallet but also through a QR code attached to the product or order a pizza with fast delivery due to the vast specially designated car park. The degree of interpenetration of physical and virtual components in such environments in Asia is undeniably higher.

The list of differences in fintech may go on. Working in both Europe and Asia, for example, we know that women in the Philippines are more financially active (their share of applications for BNPL loans this year reaches 72 per cent), while Spanish clients still prefer to apply for loans via PC (only 27 per cent of applications are mobile). However, no matter how large the list of differences is, it is the level of speed of development and universalisation of the industry that remains fundamental.

Also Read: The future of fintech: The latest trends in the industry

Today we are seeing a rapid increase in the popularity of not only superapps, but also neobanking in South Asia and Southeast Asia. It relies on the same massive demand of the population for convenient and comprehensive mobile financial solutions. Alternative financial services, including those under the auspices of the Robocash Group, are also developing in this direction.

In conclusion

The current state of fintech in Asia will inevitably change. There will be new powerful drivers that will change the face of the industry.

For example, our analysts predict a restructuring of the age spread among online users in South Africa and Southeast Asia, with greater involvement of the older folk. This promises to give the development of Asian fintech a new impetus and facets of development.

There are efforts to form a single legal environment for fintech in the European Union, which may shift the global centres of development of financial technologies. The African fintech revolution is asserting itself louder and louder. The list of examples doesn’t stop here. So, the face of global fintech will go through drastic changes, and quite soon.

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The crypto market is maturing and becoming more efficient, and one of the outcomes is that the market has become more sensitive to changes in the macroeconomic environment. This simply means it is no longer a game within a small group of crypto-natives.

Just over a year ago, the crypto market was thriving. As it became more mainstream, Microsoft, Starbucks and Wikipedia were among one of the few big firms which started to accept crypto as a form of payment method. At the same time, payment giants Mastercard, Visa and PayPal entered the scene, paving the way for greater retail crypto adoption.

In addition, institutional adoption of crypto also surged. As of date, institutional investors like MicroStrategy, Galaxy Digital Holdings, and Tesla continue to purchase Bitcoin as an asset to their balance sheets.

Furthermore, several traditional finance institutions also started to offer crypto custody services in an attempt to unlock institutional investors’ interests. Prominent players such as JPMorgan, Goldman Sachs and DBS Bank all jumped on the bandwagon to stake their claim on their share of the crypto pie.

Many used to believe crypto, in particular Bitcoin, was an inflation hedge due to it having a fixed supply. However, the release of September’s CPI YoY and MoM reports came in at 8.3 per cent and 0.1 per cent, respectively, beating the forecasted value by 0.2 per cent. This weakened the argument often made by crypto enthusiasts. Bitcoin plummeted close to 6 per cent in under 30 minutes upon the news release.

Also Read: Crypto adoption steadies in South Asia, soars in the Southeast

To understand how macro factors influence the crypto market, we need to understand its underlying mechanism, such as the various macro metrics like inflation, interest rates, etc.

How do global events affect Bitcoin?

Like fiat money, Bitcoin is affected by the economies it is used in. Due to the decentralised nature of Bitcoin and blockchain technology, a correlation can be seen between its price and that of tech stocks (e.g., Meta and Apple). It is possible that investors appear to be treating crypto like tech stocks, and these digital assets can react to market influences just like equities do.

Periods of wealth accumulation and economic growth may embolden individuals to allocate to emerging asset classes like Bitcoin to generate higher-than-average stock market returns. The demand is also dependent on the appeal of alternative investments and can increase in countries where their local fiat currency (e.g.Yen Euro) is rapidly devaluing.

Presently, Bitcoin has dipped below USD$20,000 after hitting an all-time high of USD$69,000 in November 2021. Coinbase, Crypto.com and Gemini announced large-scale lay-offs amidst a sour economic outlook.

The rapid decline in the crypto market has mirrored the selloff in traditional markets triggered by rising inflation and a sharp tightening of monetary policy by the Federal Reserve. This has proven that Bitcoin and the crypto market do indeed move in tandem with traditional assets and are not a hedge against inflation as some had previously anticipated or, perhaps, hoped.

Inflation

Inflation is a rise in prices, which can be translated as the decline of purchasing power over time.

Many advocates of Bitcoin argue that it is a counter-inflationary asset, which means that it will not respond to inflationary pressures like a fiat currency would. This was true to a certain extent as countries like Turkey and Nigeria saw disproportionate Bitcoin adoption in early 2021 due to high inflation and lack of faith in the Lira and the Naira, respectively.

By holding Bitcoin, locals increased their purchasing power as the price of Bitcoin climbs while their fiat currency depreciates. In contrast, the opposite can be said as well. Inflation has reached 40-year highs, and to date, Bitcoin has depreciated more than two-thirds of its all-time high value.

While inflation does not affect Bitcoin directly per se, it typically leads to higher interest rates which have a trickle-down effect, ultimately causing a slump in risk-on asset prices.

There are many methods used to control inflation, and while none are definite bets, some have been more effective and inflicted less collateral damage compared to others. Today, contractionary monetary policy is a more popular method of controlling inflation, which is to reduce the money supply within an economy by raising interest rates. In doing so, credit becomes more expensive, hence reducing consumer and business spending, which results in a downturn in economic activity.

Interest rates

The Federal Reserve generally responds to inflation by increasing its benchmark interest rate. This customarily reduces the demand for speculative investment assets as debt-based securities become more valuable. This typically slows down investor activity overall by making liquidity more expensive.

It is much easier to invest in alternative assets like crypto in an epoch of cheap money and high liquidity. One of the prevailing theories on how crypto grew exponentially is that investors had idle funds and few better alternatives. These trends will likely change as the Fed raises its federal funds’ rate. This will inevitably affect the price of Bitcoin, along with most other assets.

The Federal Reserve tends to keep interest rates within the sweet spot of two to five per cent, which helps to maintain a healthy economy. However, there have been times when interest rates are well above that range to curb runaway inflation.

Also Read: Does investing in Bitcoin still make sense?

This means that the cost of borrowing is much more expensive, and there will be lesser borrowers in the market eventually. In turn, this detrudes investors’ risk appetite, inducing them to invest in safer traditional assets such as cash, high-yield savings accounts and treasury bonds.

Risk-on vs risk-off conditions

When interest rates were kept near zero from 2008 to 2016 due to the Global Financial Crisis and from 2020 to the start of 2022 due to COVID-19, investors were more willing to take on more investments in search of a higher reward.

Bitcoin has experienced a lot of volatility and price appreciation since its inception in 2009. It was trading at just US$0.09 on the 1st of January 2010. At present, that’s almost a 223,000x increase. Due to Bitcoin’s volatility, the cryptocurrency market in general is aligned with risk-on market conditions.

A risk-on environment captures positive investment sentiment where investors use their capital to purchase Bitcoin and other high-yielding instruments. Bitcoin, being the new and emerging asset class, has captured investors’ interests during the bull run. As a result, we saw enormous gains in Bitcoin in 2021.

Conversely, during risk-off conditions, investors attempt to minimise risk by investing in assets with more predictable returns. Risk-off environments can be caused by widespread corporate earnings downgrades, slowing economic growth and many other factors.

Risk-off assets like currencies and bonds have been gaining popularity of late as we see a huge de-risking event unfold. US treasury yields have been surging amidst the tumultuous market environment. During such conditions, investors seek safe haven assets as they want to avoid risk and are averse to it.

Is Bitcoin a better investment?

Due to its scarcity, similarly to gold, Bitcoin has great characteristics to act as a store of value and can eventually become a risk-off asset like gold when it is more established, and its supply dwindles exponentially due to future halving events.

It is important to bear in mind that the crypto market can be affected by a myriad of factors simultaneously. Given its present correlation with the equities market and how the price has reacted to interest rate hikes, it is crucial to pay attention to the macro environment and how the Fed is handling interest rates to make the best-informed decisions.

As an emerging asset class, Bitcoin has still outperformed many other traditional assets to date. For those with a long-term view, it could also be a good time to slowly accumulate Bitcoin in an environment where fear is abundant in the market. After all, accumulating Bitcoin at the current market price is better than buying when Bitcoin was at US$68k tops, yeah?

If you are new to digital assets, it is important to work with a fund manager with crypto experience if you need help determining when to invest. Regulated by the Monetary Authority of Singapore, Fintonia Group is a Singapore-based fund manager offering two institutional-grade Bitcoin funds, Fintonia Bitcoin Physical Fund and Fintonia Secured Yield Fund. These funds were designed with the intent to help professional investors manage the security, legal, and financial risks within the fast-growing crypto ecosystem.

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About five years ago, Bolong Chew and Gérald Chablowski, who champion social causes, realised that climate change affects those at the bottom of the pyramid the most. This underprivileged section often lacks the mobility and resources to improve their living conditions (for example, access to air conditioners), and they continue to bear the brunt of the climate crisis.

“Other than this, many people still haven’t grasped the gravity as their daily lifestyles remain relatively unaffected by climate change,” says Chew. “Hence, we felt the need to act towards climate change.”

As the duo started discussing and exploring the idea, they got in touch with ENGIE Factory. The meeting proved to be a game changer in the duo’s lives.

“As we know, the greentech industry is understandably quite opaque and hard to understand from an outsider’s perspective,” Chew says. “We wanted to change this perception through our climate-tech venture.”

Solar AI Technologies, which Chew (CEO) and Chablowski (CTO) started in 2020 in Singapore, is a solar-as-a-service startup. It seeks to make rooftop solar accessible and hassle-free for smaller, underserved property owners by providing them with zero upfront cost.

Also Read: A stroll through Mohammed bin Rashid Al Maktoum Solar Park in Dubai

“Rooftop solar as a tool is already mature enough to create a positive change. However, the operational ability to drive adoption was missing, hence the decision to launch Solar AI,” explains Chew.

Solar AI was started as a data analytics company with computer vision models to automatically assess the potential and feasibility of one’s rooftop based on geospatial imagery.

Traditionally, the assessment takes up to 30 to 40 per cent of the cost of a project; it can sometimes exceed the costs of the panel installations. By incorporating artificial intelligence into the process, Solar AI can deliver much quicker and at lower costs, Chew claims.

“Over time, while we have built up these models, we felt the biggest lever for change/solar deployment is lack of trust and awareness,” says Chew. “This is why we embarked on ‘zero upfront costs’ offers to provide the customer with instant rooftop solar savings.”

The customer journey

A potential customer can use its solar simulator on Solar AI’s website for an initial assessment of one’s solar potential and electricity bill savings. An arranged remote site survey follows this to assess the feasibility of installing the panels on the rooftop.

The company will then send proposals and offers to determine the property’s suitability. Customers can then choose either its five-to-year plans for rent-to-own or direct purchase.

The firm charges customers a fixed monthly fee (usually lower than their electricity bill savings) in the rent-to-own model — a prominent model executed by sunrun in the US and Enpal in Germany.

When a customer is enrolled in the rent-to-own programme, he/she will get free daily monitoring and maintenance. It will then convert the ownership after the contract period.

If a customer decides to shift to a new location, the startup will assist him/her in transferring the service to the new homeowner.

“How much money one can save depends on the household’s energy consumption amount and patterns, the current electricity retailer and utility rate, and the number of solar panels their roof can accommodate,” Chew clarifies. A typical SP Group customer consuming 1,500kWh of electricity a month can expect to save more than S$300 each month with a 12kWp system of 30 solar panels.

Also Read: SolarHome extends its Series A with US$2M to grow the customer base of its pay-as-you-go solar solution

“We have done more than 50 projects relying on this mechanism, and we believe it is what works best for us currently,” he says.

Solar AI only utilises Tier 1 panels from popular brands and picks panels, which carry a 30-year linear performance warranty.

For the next 12 months, Solar AI will focus on Singapore. In 2024, it aims to expand to the Philippines and Malaysia.

“We have already started laying the foundation for market expansion. We have 7,000 and 8,000 monthly readers from these markets, respectively. The goal is to convert more than 5,000 properties across Southeast Asia to solar by 2025 and decrease up to 84,394 tonnes of carbon per year,” he goes on.

Funding is a challenge

Solar AI started the project with pre-seed funding of S$450,000 from ENGIE Group in 2020. However, for a highly capital-intensive business like this, this is not adequate to run the project.

Loans from large institutions and banks are the only options. However, they fund mainly large projects. “We serve smaller projects at higher volumes. So, we rely on project financing. We have S$4.5 million earmarked for our portfolios,” Chew adds.

In terms of competition, Singapore has players such as SolarHome, a pay-as-you-go solar solutions startup with operations in Indonesia and Cambodia. However, SolarHome’s primarily focuses on energy access in developing markets and primarily on off-grid systems.

“We are looking at a different customer segment; specifically customers with grid-connected systems, which we believe are a much bigger segment in the market,” shares Chew.

There are also some commercial zero upfront cost solar offers in Singapore. “These are typically limited to large projects, excluding as much as 85 per cent of viable solar properties. As a tech-focused startup, we bring down costs and are thus able to offer this programme to this vastly underserved market segment,” Chew concludes.

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Cyberwar is the new, rapidly increasing mode of combat, as it knows no boundaries and can be detrimental to the foundation of a country’s defence and government.

A prime example of this can be seen within the conflict between Russia and Ukraine, as before Russian troops even made their way into the opposing territory, Ukraine had already been hit by new malware that was designed to wipe data.

Many experts say that cyber war is already here, as opposing countries are using this technological weapon to weaken government power and hack into databases that are vital to the well-being and operation of their enemies. Microsoft even discovered malware in Ukrainian government systems that had the ability to be triggered remotely.

In February 2022, the FBI asked US companies to alert them to any increased cyber activity that was launched against Ukraine or the US. This was issued alongside a “shields up” alert that recommended that all organisations adopt a heightened cybersecurity posture.

All of these precautions can be attributed to the fact that Russia, Ukraine, and the US are currently the top three most targeted countries for cybercrime. The likely explanation for this, as experts say, is that Ukraine is likely being used as a live testing ground for Russia’s next generation of cyber weapons.

Why test on Ukraine? Because Ukraine’s infrastructure is similar to Western Europe and North America, but there are limited resources for counter-attacks, Russia can attack without much fear of reciprocation to prepare for much larger and well-equipped enemies.

Also Read: Why firms need a multi-layered approach to cybersecurity

These cyber-attacks have only grown in frequency over time, with notable events every year dating back to 2015 when suspected Russian hackers knocked out electricity for 230,000 customers in western Ukraine.

Fast forward to 2022, the US and the EU have tried to thwart the threat from Russia by providing support to bolster cyber defences in Ukraine, but it is unlikely that the attacks will stay within its borders. Despite Ukrainian efforts to counter-attack and cause chaos within Russia’s systems and databases, cyber warfare remains one of the largest threats to the most targeted countries.

Cyber attacks vs cyber war

Cyber war comes in many shapes and sizes, varying in different types of threats and different levels of severity. The connections between cyber and physical assets are growing, which brings greater risk to both network and physical infrastructure security.

In fact, in 2021, data breaches and cybersecurity attacks on average cost companies US$4.24 million per breach, which is a 10 per cent increase from the previous year. In addition, the pandemic has only heightened the potential for damage from these threats, as more information has been moved to the cloud, more people are working remotely and from less-secure home networks or personal devices, and more services, in general, are being provided in a digital space.

In terms of severity, cyber attacks differ from a cyber war in some key ways. Cyber-attacks are known to be less devastating, more isolated, and usually just testing new cyber weapons. They have the potential to shut down electrical grids, destroy technology, and self-destruct power infrastructure. Cyber war, on the other hand, could impact the scale of a natural disaster. A comparable disaster would be the 2021 Texas Freeze, which caused widespread damage, loss of electricity, food and water, caused massive disruption to everyday life and caused over 200 deaths.

Also Read: How can lean startups build a resilient cybersecurity posture

In general, people fear cyber war, as reports show that 93 per cent of Americans are afraid of such attacks against the US, but only 19 per cent are totally confident that the government can protect them against cyber warfare. Fortunately, countries like Japan, China, and the US are some of the leading countries in security for cyber attacks, coming in at 67 per cent, 63 per cent, and 70 per cent secure, respectively.

In addition, 75 per cent of cyber attacks target financial services, and 20 per cent target business networks, showing researchers where the defences need to be allocated. These types of attacks seek to make important resources like finances, cell service, running water, internet, food, utilities, and health records unavailable to users.

Despite these grievances, citizens globally are already taking measures to protect themselves from cybercrime, such as updating software, changing passwords, backing up computers, stashing cash reserves, and backing up emails offline.

The lines on the battlefield of cyber attacks are blurred and complex as this new generation of crime and warfare increases in frequency, forcing citizens of every nation to take action to protect themselves and their assets.

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Micro-mobility company Scooterson has bagged a US$74-million contract to build electric scooters in Singapore.

The company didn’t disclose the contractor’s name since it has signed a non-disclosure agreement with the firm. “I can reveal that it is an electric vehicle (EV) unicorn in the US,” Scooterson’s Co-Founder and CTO Deepansh Jain told e27.

Scooterson is setting up a manufacturing facility at JTC Launchpad, one of the hottest startup spaces in Singapore. “We plan to produce around 850 units monthly (over 10,000 units annually). We will go in full swing starting April-March 2023,” he shared.

The company chose Singapore to base its factory because it is an ideal hub for innovation and enterprise in Asia and globally. The island nation also occupies a unique position for hardware development with many key advantages.

“Because of Singapore’s strategic location and how it provides access to resources and industry knowledge, we’ve been able to focus on enhancing our R&D to create products in the island nation that can be marketed in countries like the US,” said Scooterson Founder and CEO Mihnea de Vries.

Also Read: Now, Scooterson’s AIR smart scooter can be moved from one place to another remotely

The mobility company will also strengthen its R&D department in Singapore to create streamlined components and reduce hurdles related to manufacturing and costs. “We plan to lower manufacturing costs by doing away with the margins being paid to the component suppliers, particularly costly components like batteries for its e-scooters,” added Vries.

The EV venture plans to hire 15 employees to strengthen its R&D department, which currently employs nine people. It plans to employ 20-25 more people in the manufacturing department in the next six to nine months.

Originally founded in 2016, Scooterson offers Rolley+, a semi-autonomous e-scooter that requires zero learning curve and can accelerate on its own. Its Smart Mode Acceleration feature works in tandem with the scooter’s sensors, phone sensors and prior ride data to optimise speed.

Unlike conventional scooters, Rolley+ doesn’t have a gear shifter or acceleration lever. It adjusts the speed and performance according to the rider’s body movements.

Rolley+ also boasts of a minimalist dashboard with an intuitive interface. Backed by AI technology, the e-scooter can adjust its torque settings to match its battery levels, allowing riders to enjoy peak performance without sacrificing power. The technology also makes the e-scooter energy-efficient and safe by analysing the rider’s riding patterns, profile, and surroundings.

The model uses components made of magnesium alloys and aerospace-grade aluminium alloys. It has a polymer chassis reinforced by Carbon/Kevlar and sports a lightweight composite body 3x lighter than conventional e-scooters. Its battery supports a 120km range.

The other model is AIR (short for Artificial Intelligence and Remote operations). This scooter is designed as a teleoperation and autonomous fleet-rebalancing solution for micro-mobility operators. This enables scooter-sharing companies to do fleet distribution for their customers remotely.

According to Jain, AIR is specifically designed to lower operational costs by reducing the staffers required to rebalance the fleets on the streets or deal with footpath obstruction and urban clutter. It will also curb the misuse by recording the errant user’s actions and restricting him/her access to the service in case of vandalism.

The Scooterson mobile app allows users to remotely lock/unlock their scooters, share their travel information and the scooters with family and friends, and send charging notifications when the battery is running low. Moreover, its anti-tapering alarm system and Find My Scooter function allow users to locate their scooters if they are stolen or lost.

Vries also shared that most of Scooterson’s sales are online, with most buyers coming from the US. As of now, the US is its biggest target market, and it plans to set up a brick-and-mortar store with a partner. “We are looking to enter other potential markets, including Europe and Asia, specifically the Philippines, South Korea, and Japan.”

In 2018, Scooterson bagged Red Dot Design Award for Rolley. A year later, the startup unveiled a new foldable lightweight smart e-scooter Elf, with plans to launch in Singapore in October. However, the plans hit a roadblock when the government restricted the use of personal mobility devices.

The startup is backed by Singapore-based ElevateVC.

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Echelon 2022 aims to provide intimate and focused discussions on key topics and business matching services to facilitate business-driven connections during the two-day event. e27 will curate and invite key stakeholders of startups, investors, corporates, and ecosystem enablers to drive towards fruitful business outcomes at Echelon.

The 2022 Echelon edition will be co-located with SWITCH at Resorts World Sentosa from 27 to 28 October 2022. Learn more here. 

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Line Man Wongnai, an e-commerce platform for food delivery, grocery delivery, taxi, messenger, restaurant reviews, and restaurant solutions in Thailand, has raised US$265 million in a Series B investment round led by Singapore’s GIC and LINE Corporation.

BRV Capital Management, PTT Oil and Retail Business Public Company Limited (OR), Bualuang Ventures, and Taiwan Mobile also joined the round.

With this investment, Line Man Wongnai has achieved over US$1 billion to become Southeast Asia’s latest unicorn.

The funding will be used to expand new service categories, recruit tech talent, and improve tech infrastructure. The firm aims to employ more than 450 tech professionals by end-2022.

Line Man Wongnai was established in 2020 following the merger of Thailand’s leading on-demand assistant app Line Man and restaurant review platform Wongnai.

Also Read: Thai restaurant reviews platform Wongnai invests US$1M in restaurant PoS startup FoodStory

Line Man’s services include food delivery, grocery delivery, messenger, and taxi. It claims the number of orders made each month through the food delivery service grew by more than 15x between January 2020 and August 2022. Now, it operates in all 77 provinces in Thailand, offering delivery options to 700,000 restaurants.

On the other hand, Wongnai connects close to one million merchants to users nationwide through search and reviews. In addition, Wongnai’s point-of-sale solution has won over 50,000 merchants in the F&B industry.

Utilising a large base of customers, riders, and restaurants, Line Man Wongnai offers advertising and financial services, among others, to incrementally add value to the stakeholders in the ecosystem.

Yod Chinsupakul, CEO of Line Man Wongnai, said: “Food has been our passion since I co-founded Wongnai, and now, to connect millions of users with the biggest pool of restaurants we have is a dream come true. We are also proud to create over 100,000 rider jobs, most of whom earn more than twice the minimum wage.”

In Young Chung, CFO, Line Man Wongnai, added: “The announcement opens the next chapter for us to grow from a local Thai startup to a regional tech platform.”

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Echelon 2022 aims to provide intimate and focused discussions on key topics and business matching services to facilitate business-driven connections during the two-day event. e27 will curate and invite key stakeholders of startups, investors, corporates, and ecosystem enablers to drive towards fruitful business outcomes at Echelon.

The 2022 Echelon edition will be co-located with SWITCH at Resorts World Sentosa from 27 to 28 October 2022. Learn more here. 

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Central and Southern Asia and Oceania (CSAO) is the third largest cryptocurrency market in our index this year, with citizens of CSAO countries receiving US$932 billion in cryptocurrency value from July 2021 to June 2022.

CSAO is also home to seven of the top twenty countries in this year’s index: Vietnam (1), the Philippines (2), India (4), Pakistan (6), Thailand (8), Nepal (16), and Indonesia (20).

Let’s analyse the main drivers of and barriers to grassroots cryptocurrency adoption in these countries. But first, let’s look at CSAO in aggregate.

India continues to lead CSAO in the unweighted crypto activity, receiving US$172 billion in cryptocurrency value from July 2021 through June of this year. Thailand, Vietnam, Australia and Singapore follow close behind, with each receiving more than US$100 billion. Less engaged with cryptocurrencies, however, are Central Asian countries like Uzbekistan and Oceanian island nations like the Maldives.

NFTs are perhaps the biggest on-ramp to cryptocurrency in CSAO today. 58 per cent of web traffic from CSAO IP addresses to cryptocurrency services in Q2 2022 was NFT related; another 21 per cent was to the websites of play-to-earn blockchain games.

Play-to-earn games and non-fungible tokens are intimately related. In most blockchain games today, the in-game items are NFTs, like Axie pets in Axie Infinity and Sneakers in STEPN, which can be resold on many different NFT marketplaces, like MagicEden and OpenSea. For countries with high web traffic to NFT marketplaces, especially Thailand, Vietnam, and the Philippines, a large portion of that NFT-related traffic may therefore come from players of blockchain games.

As the heatmap above shows, NFT-related websites account for a majority share of web traffic in almost every CSAO country, but most of these same countries have their second-highest share going to blockchain games and entertainment.

This is not necessarily surprising. CSAO is a hub for innovation in blockchain-based entertainment. Game-centric blockchain developers Polygon and Immutable X are headquartered in India and Australia, for example, and Axie Infinity and STEPN, the two largest play-to-earn games, are operated in Vietnam and Australia, respectively.

Also Read: A look into the Chainalysis 2022 geography of cryptocurrency report

Traffic to websites related to subjects like decentralised exchange contracts, however, has declined in recent quarters. This is likely connected to the bear market overall. Manan Vora, Senior Vice President of Operations and Strategy at Liminal, a Singapore-based wallet infrastructure provider, found this to be the case. “The UST crash played a big role in shaking the confidence of the crypto market. When a top ten coin goes to zero, it becomes very difficult to get people who have just entered the market to stay in the market. These are the users that you may lose forever.”

Now that we’ve looked at CSAO’s crypto markets at large let’s zoom in on the most active countries within the region.

Rapid adoption in Vietnam and the Philippines

For the second consecutive year, Vietnam ranked the highest in our cryptocurrency adoption index. The Philippines, meanwhile, made a giant leap, jumping from 15th to second. Both of these countries have similar growth drivers: play-to-earn (P2E) games and remittances.

The first of these, P2E games, we’ve already addressed in part above, but it’s worth noting the sheer scale of P2E penetration in these two countries in particular. An estimated 25 per cent of Filipinos and 23 per cent of Vietnamese citizens have played a play-to-earn game. At one point, players based in the Philippines made up 40 per cent of Axie Infinity’s player base. Meanwhile, Axie Infinity’s developer, Sky Mavis, is based in Vietnam.

Vietnam and the Philippines are also massive remittance markets, with remittance inflows accounting for five per cent and 9.6 per cent of their respective country-wide gross domestic products. In Manan Vora’s view, cryptocurrencies, especially stablecoins, help bridge the gap in cases where parents don’t have access to traditional banking channels and money transfer services like Western Union charge high fees. “It makes a lot of sense. Why pay three per cent to a banking intermediary and wait two days for the funds to reach them when USDT/USDC can reach them within one minute, with almost zero fees?”

The same remittance thesis resonates for other CSAO countries as well. Pakistan, India, and Bangladesh each have US$20+ billion in remittance markets, and blockchain-based payment providers are beginning to disrupt traditional intermediaries. Some of these payment rails are even being built in coordination with government agencies, such as the Pakistani central bank’s work with Alipay. These transfers are generally made via stablecoins, so that the value being transferred is preserved in transit.

As the graph above shows, stablecoins and ETH/WETH are the top two most actively traded asset types in many CSAO countries, consistent with the remittance and NFT-centric adoption model.

Indian and Pakistani crypto regulations likely dampen activity, but not the pace of innovation

In our 2021 crypto adoption index, we found that Indian and Pakistani citizens were the second and third highest cryptocurrency adopters globally, respectively. In 2022, they’ve fallen to fourth and sixth. Recent regulatory developments may help explain why.

India

On April 1st, 2022, the Indian government implemented a 30 per cent tax on all crypto gains, with no ability for users to offset their losses. Then, on July 1st, the government also implemented a one per cent transaction deduction at source (TDS), meaning that crypto users must pay an additional one per cent fee on every transaction. “This led to a lot of brain drain,” said Vora, “first to Singapore, and now to Dubai because even if your business is market-making, it is now effectively being treated as a lottery business.”

Also Read: A new type of digital arts are on the rise. How is Web3 redefining content ownership?

Vikram Rangala, the Director of ZebPay, an Indian crypto exchange, helped us understand the government’s perspective on these new rules. For them, he explained, it’s about consumer protection.

“From the conversations I and my colleagues have had, people in the Indian government, including members of parliament, aren’t anti-crypto per se. Some are very pro-crypto. But they’re worried about their constituents trading a volatile asset without adequate information. A 25-year-old saving to get married or provide for his family might trade some meme coin and get wiped out. No public servant can be seen backing something so risky for most people. Rich people can survive such losses, but a house cleaner, farmer, or rickshaw driver cannot.”

And in Rangala’s view, crypto innovation in India has continued unabated.

“India has dozens of [crypto] projects working on establishing property rights, accessing tickets and membership passes, helping rural artisans monetise, even giving token holders a chance to go skydiving with a movie star in Dubai, and more.”

Pakistan

In January this year, Pakistan’s central bank and government recommended a ban on cryptocurrencies. Since then, the federal government has formed three subcommittees to deliberate the matter further and eventually propose their own crypto policies. It remains to be seen whether or not the policies implemented will be as restrictive as the proposed ban.

Other issues further complicate Pakistani crypto adoption. The country has been on the Financial Action Task Force’s (FATF) grey list since 2018, hurting its ability to get international financial aid and hardening the government’s negative attitude towards cryptocurrencies.

State Bank of Pakistan (SBP) Governor Reza Baqir stated in February that the potential risks associated with cryptocurrencies “far outweigh the benefits” and named the “widening grey economy” and “capital flight” as key worries.

Given Pakistan’s current civil unrest, its former prime minister was recently charged under the country’s antiterrorism act yet remains one of Pakistan’s most popular leaders, Baqir’s concerns about crypto-based capital flight may prove prescient. Vikram Rangala suspects as much, “After watching Venezuela and Argentina, I think that anybody who’s in a country where things are not that stable, they’re starting to see cryptocurrency as a possibility.”

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Mycotech develops a new scientific process to grow mushroom mycelium-based products. It uses mushroom mycelium, the vegetative part of mushrooms, as a natural adhesive. It employs mycelium as a binding agent to create biomaterial composite (Biobo) and cultivate it to create strong, leather-like material (Mylea).

CEO Adi Reza Nugroho co-founded Mycotech with the mission to create the highest quality materials made from mycelium that meet the highest standard of the biotech industry. He also wants to make a real impact by reducing the use of animals in the fashion industry and delivering sustainable material that meets the uncompromising standards of the fashion industry.

Mycotech has shipped Mylea material samples to 16 countries following its original Kickstarter campaign. In collaboration with LVMH prize-winning designer Masayuki Ino from Japan, its products were showcased at Paris Fashion Week S/S 2021 and F/W 2022.

In March and April 2022, Mycotech brought one collaboration product with Hijack Sandals in Indonesia to the overseas market to launch the first mycelium leather sandals called “Mimic Mylea” exclusively in Japan. The launch marks its first step to start penetrating the East Asian market.

Also Read: This startup by an Indonesian farmer produces ‘leather’ used in shoes and wallets without killing a single animal

Currently, Mycotech operates a production facility with a capacity of 10,000 sq ft per year in Indonesia. Besides that, Mycotech brought six global brands, with one of the brands coming from Fashion for Good, for piloting to create prototypes, bring the products to the market, and make capsule collections.

In addition to focusing on Mylea, the company will also develop research and penetration for two other products made from mycelium for the long term. Biobo for creating remarkable structural patterns that rejuvenate residential, industrial, and public spaces, as well as composite research that allows exploring more about the many possibilities of mushrooms as the key to the future.

“Biomaterial innovations, such as mycelium leather, are instrumental to the industry’s transition towards more sustainably sourced materials and better practices. There has been an observable increase in demand for mycelium-based materials over the last decade. Fashion for Good believes Mycotech is rightly positioned to be a commercially viable solution in this space,” said Priyanka Khanna, Head of Global Expansion at Fashion for Good.

Peter Chia, CEO at Temasek Life Sciences Accelerator and Temasek Life Sciences Laboratory, added, “Mycotech is at an inflexion point where transdisciplinary bioengineering research is poised for significant contributions toward sustainability.”

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Echelon 2022 aims to provide intimate and focused discussions on key topics and business matching services to facilitate business-driven connections during the two-day event. e27 will curate and invite key stakeholders of startups, investors, corporates, and ecosystem enablers to drive towards fruitful business outcomes at Echelon.

The 2022 Echelon edition will be co-located with SWITCH at Resorts World Sentosa from 27 to 28 October 2022. Learn more here. 

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Malaysia’s global drone services company Aerodyne Group has raised US$30 million as part of its latest bridging round led by Petronas Ventures, the corporate VC arm of energy major Petronas.

The round also included a follow-on investment by KWAP, initially invested in Aerodyne in 2020.

Also Read: Malaysia’s Petronas sets up US$350M VC fund to invest in tech startups around the world

Petronas is Aerodyne’s long-time client. A memorandum of collaboration (MoC) was signed on April 21, 2022, between Aerodyne Oil & Gas, a subsidiary of Aerodyne Group and Petronas’s technology commercialisation arm Petronas Technology Ventures. It explores opportunities for deployment and commercialisation of drone-based solutions, as well as enabling remote and autonomous operations through the expansion of robotics and digitalisation.

The drone company will use the capital to support its expansion into Europe, Africa, Latin America and South Asia. A portion of the funds will also be utilised to support its agriculture scaling efforts and bring the solution to Indonesia and India.

It will also invest strategically in technology acquisition and enter the advanced air mobility space. A large-scale commercialisation plan for the air mobility solution is underway. This solution includes using heavy lifter drones, which can replace the more costly traditional methods and is well-suited for oil & gas operations such as shore-to-platform and platform-to-platform deliveries. This also accelerates extensive logistic operations, such as delivering medical supplies in rural areas and potentially in urban air mobility, where it can provide fast and cost-effective transportation shortly.

According to Kamarul A Muhamed, Founder and Group CEO of Aerodyne, the firm has plans to raise US$100-200 million shortly to bring Aerodyne to the next stage of its growth.

Established in 2014, Aerodyne is a DT3 (drone-tech, data-tech and digital transformation) company. It uses Artificial Intelligence as an enabler for large-scale data operations, analytics and process optimisation. Its flagship precision agriculture solution is powered by in-house developed AI capabilities, with more than 300,000 secured effective hectarages for major industry players in Malaysia.

Also Read: Malaysian drones services firm Aerodyne adds Japanese investors to its cap table

The group employs over 1,000 drone professionals in the UAS (unmanned aerial vehicle) services sector. It claims to have managed more than 560,000 infrastructure assets with 458,058 flight operations and surveyed over 380,000 km of power infrastructure across 35 countries.

Early this year, the group acquired a principal stake in Malaysia-based AI and data analytics company Synapse Innovation for an undisclosed amount. Last year, it announced a strategic investment from a consortium of Japanese investors, comprising Real Tech Fund, Kobashi Holdings and ACSL.

Two years earlier, the group secured US$30 million in a Series B investment round, led by InterVest/Kejora Ventures, with participation from VentureTECH, Gobi Partners and 500 Global. This round was extended with an investment from North Summit Capital, Arc Ventures, and Leave a Nest in February 2020.

In December 2019, Aerodyne acquired a controlling stake in the services business of Measure UAS, an aerial intelligence company in the US.

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Echelon 2022 aims to provide intimate and focused discussions on key topics and business matching services to facilitate business-driven connections during the two-day event. e27will curate and invite key stakeholders of startups, investors, corporates, and ecosystem enablers to drive towards fruitful business outcomes at Echelon.

The 2022 Echelon edition will be co-located with SWITCH at Resorts World Sentosa from 27 to 28 October 2022. Learn more here. 

The post Petronas leads US$30M financing round of Malaysian industrial drone firm Aerodyne appeared first on e27.

As an alternative fundraising tool, venture debt has gained traction in Southeast Asia. Singapore-based Genesis Alternative Ventures, which launched its second fund with a target of US$150 million in August, is one of the leading companies in this space. Japan’s Aozora Bank is one of Genesis’s investors.

Genesis was co-founded by Martin Tang, who has strong business development professional skills in corporate finance, working capital, venture debt, private equity, and financial modelling. Before founding Genesis in 2018, Tang was Vice President at DBS Bank and previously held the Associate role at Standard Chartered Bank. He holds a Bachelor’s Degree in Commerce from Curtin University.

Tang speaks at Echelon Asia 2022, to be held in Singapore from October 27-28.

In this conversation, Tang shares why offline events like Echelon are crucial for the region’s startup ecosystem.

Excerpts:

Offline events are making a comeback. Do you think they are relevant in the new post-COVID era? Why?

Offline events are coming because they are relevant and fill our innate need to connect with each other. We have all missed the spark of inspiration from seemingly causal conversations over lunch, waiting at lift lobbies or the water cooler.

How startup events like Echelon are important when the world is going through a tough investment climate. What do you expect from Echelon?

Events like these are even more important during tough times because there is strength in unity. There is an African proverb: “‘if you want to go fast, go alone. If you want to go far, go together’. When people get together, we can encourage each other to keep going and provide support.

I look forward to many meaningful conversations leading to collaborations during the event.

How does Genesis help its portfolio companies tackle the current crisis? Have you become more prudent and cautious when it comes to investing?

In addition to deploying capital to our portfolio companies, we constantly value add by making strategic introductions to expert networks, other founders and investors.

Also Read: ‘Economic crises become less important when investing with a longer-term mindset’: Qin En Looi

We are laser-focused on ensuring that companies have sustainable businesses with strong unit economics. Some CFOs are grateful to us for helping them enforce financial discipline. We continue to seek potential portfolio companies to add to our stable actively.

Many Japanese investors are now turning their focus on Southeast Asia. Is it because Japan’s potential has already been tapped, or does SEA present better opportunities?

Japanese investors have always been focused on Southeast Asia — in construction, infrastructure, automotive, etc. The potential in Southeast Asia is huge, and investing in the startup ecosystem here is an extension of their thesis.

How do Japan’s startups tide over the current crisis compared with their counterparts in Southeast Asia?

I believe it would be the same as any other startup in SEA: Cut costs, raise capital, preserve cash flow, and ensure strong unit economics to tide over this turbulent period.

Why sustainability and climate tech are important in Southeast Asia?

It is not just important for Southeast Asia but for everyone in general. While making a return is important for all businesses, doing it sustainably is equally important.

Also Read: Nothing can truly replace the offline element of community building: Yinglan Tan

The opportunity for climate tech in Southeast Asia is a large one, given our vulnerability to the effects of climate change. Most major cities here are coastal ones and, therefore, vulnerable to rising sea levels and climate change. So it has gone from merely being a buzzword to something in urgent need of action.

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Echelon 2022 aims to provide intimate and focused discussions on key topics and business matching services to facilitate business-driven connections during the two-day event. e27 will curate and invite key stakeholders of startups, investors, corporates, and ecosystem enablers to drive towards fruitful business outcomes at Echelon. The event will be co-located with SWITCH at Resorts World Sentosa from 27 to 28 October 2022. 

We are looking for top-notch speakers for the 2022 edition to join our line-up of speakers, such as Steve Melhuish (Co-Founder, PropertyGuru), Yinglan Tan (Insignia Ventures Partners), Looi Qin En (Saison Capital), Aaron Tan (Carro), Aaron Sharma (Scaleup Malaysia), Carmen Yuen (Vertex Ventures), Shao-Ning Huang (AngelCentral), and Grace Sai (Unravel Carbon).

Learn more here. 

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