Vinod Nair, Founder and CEO of MoneySmart
Last week, The MoneySmart Group, which runs a financial content and comparison platform in Singapore and Hong Kong, announced its plans to go public via a reverse takeover (RTO) deal. The company said it would acquire SGX-listed hotel operator, Asia Pacific Strategic Investments (APS) in a deal worth US$161.7 million.
The listing will help the 13-year-old MoneySmart to raise capital for expansion in Singapore and the region.
In this interview with e27, MoneySmart Founder and CEO Vinod Nair discusses the RTO, its benefits, the company’s grant plans, and the trends in the financial comparison industry in the region.
MoneySmart is a 13-year-old company with a considerable presence in Singapore and Hong Kong. Why does the company prefer an RTO route to a direct listing? What are the benefits of an RTO listing?
An RTO is simpler than an initial public offering (IPO) and similar to an M&A transaction where terms are agreed upon with a single buyer.
In an RTO, the listing company and vendor agree on the valuation of the target company and pricing of the consideration shares at an early stage of the transaction. Moreover, it is faster and easier because a sponsor can issue shares directly and has the required shareholder support rather than getting help to underwrite the deal like in an IPO.
An RTO deal also brings growth capital into the company. This transaction will provide significant growth capital into MoneySmart to accelerate our growth ambitions.
Also Read: How did MoneySmart grow its revenue by 25 per cent amidst a pandemic?
Besides this, a listing provides liquidity for shareholders: It enables investors and shareholders to realise some liquidity.
Above all, a RTO listing provides us with currency to pursue M&A opportunities: While the market is volatile and uncertain, we believe this presents an excellent opportunity for well-capitalised companies to pursue strategic acquisitions.
Why SGX? Why not a global stock exchange such as NYSE?
MoneySmart is a Singapore-based tech company founded by a Singaporean and is a well-known brand in Singapore amongst retail and institutional investors. MoneySmart will be proud to be the first major local consumer technology company to list on the SGX.
How much capital does the company aim to raise via SGX?
We are unable to comment on this at the moment.
A MoneySmart release mentions expansion plans. Can you share more details about this?
With the raising of capital, we anticipate MoneySmart’s rapid growth through investments in its membership and rewards programmes designed to deliver maximum value for its customer base. MoneySmart Plus rewards MoneySmart customers with cashback for transactions they would typically perform and provides them with highly personalised financial product recommendations based on their profile and preferences.
In addition, raising capital through its listing will also power other strategic partnerships through potential M&As.
The RTO will also help accelerate MoneySmart Group’s digital disruption of the insurance industry through Bubblegum — a digital insurance platform aimed at millennials and Gen Zs, launched in recent weeks.
We’re evaluating expansion opportunities in developed markets in Asia across the group. Developed Asian markets are attractive because of the relatively high financial literacy and product penetration rates.
Can you share more details about Bubblegum? How is it different from other insurtech platforms?
As Singapore’s newest insurance player, Bubblegum intends to shake up the market, challenging the status quo where insurance products are often associated with complexity, confusing jargon, trade-offs, paperwork and long-drawn claims processes. The definition of what Singaporeans value is changing, and so must include the concept of insurance.
Bubblegum is not just here to disrupt the status quo; we are here to change what consumers should expect regarding their insurance experience. Bubblegum’s product design is guided by our extensive consumer insights from helping consumers find the best financial products on the MoneySmart platform.
Also Read: Don’t know which credit card to use for a bill? MoneySmart’s new app has the answer
In terms of USP, Bubblegum is aimed at the younger generation of digital natives who prefer to do their own research on sites like MoneySmart and want a seamless digital experience instead of having to talk to an insurance agent. Bubblegum is for the self-serve generation that is increasingly discerning and value-conscious.
Secondly, Bubblegum aims to address many consumer pain points like unclear terms and conditions, manual paperwork and opaque claims processes through its digital platform.
You raised your Series B in 2017, and there have been no public announcements about follow-on funding. Did you raise more capital after that?
We raised US$10 million in Series C in 2019 from existing and new investors.
What will happen to your institutional investors? Will they also exit?
They will remain shareholders, and major investors will have the option to sell after the lock-up period.
Are you profitable already?
We are at breakeven; low burn rate in some months and marginal profitability in others.
How many users do you have across Singapore and Hong Kong? How many deals does MoneySmart process a month?
We have about 2-2.5 million in sessions every month.
How is the personal finance market growing in Singapore and the region? What are some of the definite trends?
The personal finance market continues to grow at a healthy clip in Singapore and Southeast Asia. Increased digitisation and a more financially-savvy population mean that consumers are much more highly involved in personal finance than before. Over the last 13 years, MoneySmart has worked closely with consumers to help improve financial literacy.
Millennials and Gen Zs also think about personal finance very differently. This is where the consumer insights MoneySmart Group has amassed over the last 13 years are pivotal in helping us design personal finance products that cater to their changing lifestyles and needs.
The group aims to bring this DNA of meaningful disruption through unrivalled consumer insights to different parts of personal finance over time.
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