Singapore’s work culture is globally known for its long hours, high pressure, and intensely competitive environment. Workers in the city-state regularly clock in 43-hour weeks, with unpaid overtime being a norm for many. However, this 60-year-old work tradition may be about to experience a dramatic shift.

Starting in December 2024, all employers will be required to have a formal process for employees to request flexible work arrangements. Employers must respond to these requests within two months, providing valid business reasons if they reject a request. This initiative aims to support a tight labour market and an ageing workforce, making it easier for caregivers and seniors to remain in the workforce.

These newly announced guidelines mean Singapore’s workers can request four-day work weeks, more work-from-home days, staggered work times, and flexible locations. The announcement mirrors measures by other governments relaxing employment arrangements to retain talent, such as the UK’s Flexible Working Bill and Australia’s ‘right to disconnect.’

Numerous global studies have revealed the benefits of shorter work weeks, namely four-day work weeks, for both productivity and employees’ well-being. The business world is increasingly embracing the ethos of work quality over work quantity, giving leaders a clear impetus to embrace more flexible and agile hiring models.

Our Talent-on-Demand report recently uncovered how these new models are being implemented across Southeast Asia (SEA). Regional business leaders reported scaling down fixed-cost and capability models in favour of flexible hiring and variable costs.

As such, the demand for highly skilled freelance talent across SEA has grown by 85% since last year. This trend is driven by the aforementioned factors and talent’s desire for a work-life balance that fits their personal needs.

Amid economic changes and advancements in technology, the worldwide flexible workspace market could exceed between US$35 million and US$50 million by 2030, reflecting the growing demand for flexible and agile work environments. Thus, the flexibility offered by adaptable workforce models will no longer be just a benefit but an expectation.

Autonomy through flexibility

Flexible working hours, or flexitime, is a work arrangement that allows employees to determine their work schedules with their employer rather than adhering to a strict nine-to-five schedule. Flexitime has become increasingly popular in modern workplaces, especially among working parents and younger professionals, who may have more individualised lifestyles and a fresh attitude toward their careers.

Also Read: Rethinking remote work: The engagement issue at the heart of work-from-home

From a hiring perspective, flexible working arrangements are a significant opportunity to attract new talent. Young talent may want the chance to work overseas temporarily or full-time, devote more time to personal growth and hobbies, and feel empowered by their company’s trust in them to set their own schedule. Flexible work is proven to bring increased job satisfaction and work-life balance, which lowers employee absenteeism, increases commitment, and reduces turnover.

For skilled freelance and independent consultants, flexible work presents a significant opportunity to gain work and experience with various organisations. Skilled freelancers value their independence, freedom of choice, and the chance to experience different company cultures. They have the autonomy to manage their personal needs and work life, choosing projects that fit their specific requirements.

The rise of independent talent aligns with organisations’ increasing pivots toward agile and flexible hiring models. Companies can tap independent professionals for their specialised skills to complete specific projects. Once the new capability has been implemented, both the employer and freelancer can move on to explore their next opportunity.

The right model

As Singapore’s flexible work arrangement (FWA) guidelines roll out, the next step for business leaders and human resources will be to determine which models best align with their operations. One popular option is a hybrid work arrangement that blends remote and in-office work.

The freeform hybrid model specifies a set number of required in-office days but allows employees to choose which days they come in. Alternatively, businesses may opt for an anchor model, which designates the required in-office days or weeks.

Spurred by these trends, businesses will be more likely to adopt compressed work weeks, flexitime, and reduced hours or part-time roles to offer greater schedule flexibility. These approaches help organisations expand their talent pool and promote work-life balance. As a result, they may see reduced overhead costs, lower turnover rates, a broader talent pool, and increased productivity and satisfaction.

With Singapore leading the way, the traditional nine-to-five model may soon be a thing of the past in Southeast Asia. Organisations need to evolve from previous rigid mindsets to retain a new generation of talent and stay competitive. The Singaporean Government has set the flexitime guidelines; now, businesses must make it the norm.

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Beep, an IoT company that provides interoperable charging networks for businesses and drivers in Singapore, has closed its US$3.3 million pre-Series A investment.

The round was led by existing investors Granite Asia (formerly GGV Capital), Farquhar VC, SUTD Venture Holdings, and Wing Vasiksiri, with participation from M7 Ace Neo, an M7 Company.

The startup will use the funds to accelerate its expansion in Thailand and Malaysia.

Also Read: Beep launches SEA’s largest eRoaming network with its seed funding round

Launched in 2018, Beep owns and operates Voltality, an integrated ecosystem of charging stations, payment services, and vehicles.

In June 2022, it launched an electric vehicle (EV) e-roaming network spanning over 1350 charge points with 11 operators in Singapore. As of 2024, Beep has partnered with operators with over 5,000 charging stations.

According to the startup, there is a massive demand for EVs in Southeast Asia, with total EV sales in the region experiencing 894 per cent year-on-year growth. The first expansion phase focuses on extending Voltality’s charging network in Thailand and Malaysia. The platform is live with its first partners in Malaysia and will launch in Thailand in Q3 2024.

In Thailand, Voltality has signed contracts with leading charging operators Sharge and Evolt together with WHA Group, a developer of fully integrated logistics, industrial estates, power and utilities and digital solutions, and EV rental and purchasing platform EVme. The agreement will enable connectivity for several thousand vehicles to over 1,600 charge points locally.

In Malaysia, contracts have been signed with several charging operators, including KINETA, a major player in the EV space, and ChargEV to accelerate EV charging and roaming innovation.

Voltality has also secured contracts with mobility partners to enable local and cross-border charging connectivity within H2, 2024.

Beep is also exploring expanding to other regional markets such as Indonesia, Vietnam and more for its second phase in 2025. To help navigate its continued regional expansion, Ming Maa, ex-Grab Group President, will also join Beep as an advisor, bringing significant operational expertise in market development and partnerships within Southeast Asia’s complex landscape.

Also Read: The future of car-sharing industry will be shaped by trends like EVs, autonomous vehicles: SOCAR CEO

On the commercial front, Voltality recently signed an MOU with Grab to collaborate on increasing the number of charging operators onboarded onto the network, and to support building an integrated charging platform for its driver-partners in the region. An initial closed-door pilot has also started with select driver-partners in Singapore.

Voltality signed an MOU with Huawei Consumer Cloud Service on the consumer front. This will improve the data on charging station locations when using Huawei’s Petal Maps and ‘Huawei Mobile Services (HMS) for Car’ across Southeast Asia. As a result, EV drivers using Petal Maps and HMS will receive a more accurate “smart” journey planner based on their EV’s battery life.

In 2023, Beep became one of the startups that won the Petronas FutureTech 3.0 accelerator programme.

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Image Credit: Beep.

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Decarbonising real estate is about more than aggregated data — it’s about targeting individual assets. A recently released whitepaper between BuildingMinds and GRESB reveals how granular data will mean greater sustainability and how focusing on individual assets has the greatest potential for improvement. Here we will delve into how a data-driven approach can optimise decarbonisation and help meet long-term ESG goals.

Boosting eco-credentials in real estate presents an array of opportunities with the easiest wins often found in the low-hanging fruit. But while the aggregated performance data of asset portfolios is a critical resource for investors looking to meet ESG goals, it is not remotely sufficient for meaningful portfolio decarbonisation. A typical office, industrial or retail portfolio average will mask the small number of high-consumption-intensity assets that can offer the greatest potential for overall improvement.

The value of granular data

A recently published whitepaper between BuildingMinds and GRESB is therefore destined to help the sector understand how delving into the granular data can be used to better inform sustainability initiatives. Boasting the world’s most comprehensive database of energy and greenhouse gas intensities of real estate assets, GRESB enables portfolio managers to more accurately compare their individual assets with others, while allowing investors to better study the performance of portfolios with diverse asset types and geographies.

Basing planning decisions on data collected from individual assets is crucial.

Actions such as fabric retrofits, eliminating on-site combustion, and on-site renewables and storage can only be optimised and tracked when asset-level performance data is available, allowing decarbonisation plans to become sufficiently granular and organised.

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

This strategic use of asset-level data ensures that data collection efforts are focused where they will provide the most valuable insights, optimising resource allocation for informed decision-making. Rather than expecting initiatives to be somehow spread evenly across assets, with each progressing at the same pace towards an operational performance target, making the correct choice of interventions and the assets to which they’re applied – i.e. seizing the low-hanging fruit – will have the greatest impact on the achievement of long-term decarbonisation goals.

To demonstrate this, GRESB undertook a thought experiment using anonymised samples from its database. Taking the 15th percentile of energy use intensity (EUI) as the threshold for ‘currently green’ and the 85th percentile as the border of ‘currently brown’, nine pairs of synthetic portfolios were created, each consisting of 50 brown or green office, industrial or retail assets drawn from the entire spectrum of performance in the Americas, Europe and Asia. Each asset was then upgraded to a higher performance level at a similar financial investment: to the 5th percentile for already-green assets (20 kWh/m2) and to the median performance (140 kWh/m2) for brown assets.

The results: brown-to-green investment

In terms of absolute reductions in carbon, the difference was huge. The brown-to-green investment strategy resulted in a 10-to-30-fold greater reduction in energy consumption than was realised by improving already-green assets. In other words, focusing on improving high-consumption assets from otherwise average portfolios in any region has a much larger impact than investing in already-green assets from the same portfolio.

The logical culmination of using asset-level data to make real-world decisions about capital allocation is ESG-driven optimisation, perhaps using data-driven approximations. When sufficient data is available, for example, assets can be ranked in priority for intervention, and the evolution of their performance tracked over time relative to the market and other assets. Using multiple variables such as EUI, GHG intensity, and water and waste intensity makes it possible to interrogate assets and decarbonisation plans according to their impact on several metrics relevant to people and the environment.

The International Energy Agency (IEA) estimates that to meet global net-zero goals by 2050, US$573 billion will need to be invested in the energy efficiency of buildings in the rest of this decade alone. The time will no doubt come when the marginal gains concept has to be adopted to further enhance the highest-performing assets as a way of finally achieving that target. Until then, a granular approach targeting the assets that offer an easy win with the minimum outlay is definitely the route to success. 

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Thailand’s APX Logistics Solutions has secured an undisclosed amount in fresh investment from Japan’s SBI Ven Capital through its joint fund with NTU Singapore’s NTUitive and South Korea’s Kyobo Securities.

The logistics-tech startup, which expanded into Malaysia, Singapore, and Europe in 2024, is gearing up to extend its digital less-than-truckload (LTL) network into Vietnam by 2025.

The investment from SBI will provide APX with valuable expertise and industry connections, alongside support from its other investors, such as ORZON Ventures, a joint fund by Thailand’s PTT Group and 500 Global, the Asian Development Bank, and Wing Vasiksiri.

Also Read: APX wants to revolutionise logistics in SEA with ‘less-than-truckload’ innovation

“We’re on a mission to help businesses reimagine how transportation can be done in Southeast Asia with sustainability front and centre,” said Uwe Dettmann, CEO of APX Group. “We want to leverage our success and learnings in Thailand and expand to key markets across Southeast Asia, offering sustainable and seamless shipping services for businesses of all sizes.”

Founded in 2019 by Dettmann, Sorawit Tantrakulcharoen, and Sukanya Thamthada, APX provides door-to-door cargo transportation services through its network, with modern platforms for LTL and palletised cargo services. It aims to build a connected truck transport network in Thailand and the ASEAN region to improve logistic efficiency. It also reduces CO2 emissions and the number of trucks needed on the road in the long run; the system measures and tracks the emission impact within its overall network, actively making route recommendations to help reduce fuel consumption and carbon footprint.

At the core of APX’s green innovation is an AI-driven freight management system named Palli. The system uses proprietary data and algorithms to optimise truck-loading plans and coordinate the movement of assets across APX’s logistics partners in Thailand, Malaysia, Singapore, and Europe.

Also Read: APX gets ORZON’s backing to build a connected truck transport network in Thailand

APX’s customers can access solutions such as air and ocean freight management, customs clearance, warehousing and distribution, and specialised services such as fulfilment, kitting, and co-packing. Each solution is designed with sustainability in mind, aiming to reduce waste and enhance resource efficiency throughout logistics.

In July 2023, APX raised an undisclosed sum in pre-Series A funding led by ORZON Ventures.

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Image Credit: APX

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When seed-stage founders receive their first investor check, they invariably take one of several routes: 

• A) They rush to the tech press with their fundraising news. 
• B) They throw a WeWork-style party for all of their employees and stakeholders to celebrate the milestone. 
• C) They take to social media to boast of the achievements of their personal branding.

Based on my experience, the correct answer is actually D) none of the above. The founders who choose A, B, or C will inevitably fall by the wayside: Public relations, personal branding, and even company engagement should only come after what matters the most: customer retention and revenue optimisation.

The importance of retention and revenue optimisation

Upon receiving your first investment, founders should focus only on key performance indicators (KPIs) and metrics that help you understand your customers and, in turn, reduce churn while maximising revenue. This priority is built on a simple premise: You may have money now, but this will not always be the case.

For one, the investor dollars may dry up. In the past, you only needed a compelling story about your team’s growth, the product’s development, and an understanding of the market through the lens of your unique expertise. But times have changed: This narrative-driven approach to fundraising will not be enough to take a startup from seed to Series A.

Customer revenues may dry up just as fast. You may have cash in the back from users or clients, but because your startup is so young, there is little historical understanding of how soon or how fast these customers will leave you. You still only have a vague idea about your customer’s lifetime value.

In the face of these uncertainties, there is only one option that makes sense: You need to focus on driving two levers and two levers alone: reducing churn while increasing revenue. For example, a software-as-a-service (SaaS) company will need to figure out why enterprise customers are cancelling their contracts and, more importantly, determine how to thwart that. Their retention strategy may involve everything from key account management to offering automated discounts at the cancellation screen. The point is that they must understand and subsequently address the outflow of customers.

Also Read: Decoding PR: The essential tool for tech startup success

Some startups may be so early in their life cycle that customers are not yet churning, but they are not using the product. This sign is also a red flag: Your customers will soon be leaving out the door.

In addition, the business must optimise revenue. An e-commerce business, for example, can maximise revenue through cross-selling, upselling, and even greater personalisation—which can contribute to a revenue uplift of as much as 25 per cent, according to McKinsey. 

The efforts toward improved retention and revenue generation may not immediately lead to a hockey-stick graph, and that’s fine. Investors are not looking to evaluate you based on the current revenue generated by the dollar. Instead, they will evaluate you based on how well you have identified leaks and opportunities, which speaks to your startup’s aptitude and revenue for revenue growth in both the short- and long term.

Shifting the founder paradigm: Moving the goalposts for success

Retention and revenue optimisation is easier said than done because it requires such a deep paradigm shift. Founders are taught to sell, sell, and sell. They are hyper-focused on getting leads to sign across the dotted line or on getting customers to convert that there is considerably less thought on what happens afterwards.

Instead of looking at a finished sale as a “close” — of the natural endpoint of a process — founders must view it as only the first step in a much longer process of satisfying, keeping, and growing each customer. By moving the goalposts, founders stand a much greater chance of succeeding from seed to Series A: Their startup will rocket past competitors who mistakenly viewed the initial contract as the culmination of all business activity. 

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In Singapore, the medtech sector is booming. From just 59 in 2010, there are now more than 400 medtech companies. The Economic Development Board (EDB) estimates that the market  will hit US$225 billion by 2030 in Asia alone. 

However, this rapid expansion comes with its own set of challenges, mostly a compliance issue which has stifled innovation. 

Last year, the Health Sciences Authority (HSA) in Singapore intensified its efforts to crack down on the illicit trade of health products, resulting in the seizure of over 1.12 million units of illegal items and the removal of more than 12,000 listings from online platforms.

The majority of the removed listings were selling sexual enhancement or male vitality products, hair and beauty products such as anti-hair loss treatment, facial fillers and adulterated skin whitening products. 

What’s behind Singapore’s medtech boom

The growth in the medtech sector in Singapore in the past few years has been due to a few key reasons. 

The first being the support from the government, as they have been proactive in fostering a conducive environment for such companies. Initiatives like the Biomedical Sciences Industry Development Roadmap and funding support from agencies such as Agency for Science, Technology and Research (A*STAR) and Enterprise Singapore have been crucial.

Secondly, Singapore’s strategic location and connectivity make it an excellent base for companies to set up, thus providing easy access to the regional markets. 

Thirdly, HSA ensures that Singapore has a robust regulatory framework with high standards of safety, quality, and efficacy for medical devices. This reliability has bolstered confidence among global medtech firms.

Compliance: A double-edged sword

While HSA’s stringent regulations have enhanced the quality and safety of medtech products, they have also introduced significant compliance challenges. 

Also Read: The rise of generative AI in digital mental health solution

As artificial intelligence and digital health technologies evolve, protecting patient data and ensuring cybersecurity have become paramount. Medtech companies are now tasked with adhering to Singapore’s Personal Data Protection Act (PDPA) and implementing robust cybersecurity measures to safeguard sensitive information. This is no small feat and requires significant investment and ongoing vigilance.

Companies must comply with strict guidelines for labelling, advertising, and promotional activities. Ensuring that product claims are substantiated by clinical evidence and that all marketing materials comply with HSA guidelines is essential to prevent misleading information and maintain consumer trust.

Medtech companies cannot afford to be complacent. To stay ahead of regulatory changes, they must establish robust processes to monitor updates from authorities like HSA, the Food and Drug Administration (FDA), and the European Medicines Agency (EMA). Some of the critical steps they need to do is subscribe to regulatory newsletters, attend industry conferences, and engage with regulatory consultants.

Regulatory challenges can have both positive and negative impacts on innovation 

This focus on safety can enhance patient outcomes and increase trust in medtech products. 

An upside would be having a competitive advantage. Medtech firms that successfully navigate regulatory challenges and obtain approvals can gain a competitive advantage. 

Also, being compliant with rigorous regulatory standards can enhance a company’s reputation and credibility in global markets.

However, the cost and time spent complying with regulatory requirements, particularly for smaller medtech firms with limited resources, can be a huge issue. The investment in regulatory compliance may divert resources away from Research and Development (R&D) activities. 

Also Read: Solving multiple medtech problems with a single device powered by AI

Another downside would be risk aversion, wherein, in some cases, stringent regulations may discourage risky or novel innovations due to concerns about meeting regulatory standards. This could stifle breakthrough technologies that have the potential to revolutionise healthcare.

Advice for new entrants

For companies looking to enter the Singapore market, understanding regulatory requirements is paramount. Familiarising yourself with HSA’s regulations, including the classification of medical devices, setting up a Quality Management System (QMS), and navigating regulatory pathways for registration, importation, and market approval, is essential.

Another important piece of advice would be to understand the local market needs. The products should be tailored to the healthcare landscape and specific needs of the healthcare providers and patients in Singapore.

Future trends in regulatory requirements

As digital health technologies and AI applications in healthcare continue to evolve, regulatory frameworks must adapt to ensure safety, efficacy, and data privacy. This may involve introducing specific guidelines for digital health and AI-driven medical devices.

With the growing connectivity of medical devices and cybersecurity threats, future regulatory requirements may include stringent measures to ensure cybersecurity resilience. Compliance with data protection regulations, such as Singapore’s PDPA, will also be critical.

With the constant threat of global warming and climate change, regulatory frameworks may incorporate requirements related to the environmental impact of medical devices throughout their lifecycle. This could involve considerations such as eco-design principles, recycling and disposal requirements, and sustainable sourcing of materials.

As the sector evolves, so too must the regulatory frameworks, adapting to new technologies and emerging challenges to sustain Singapore’s position as a global medtech leader. The future of medtech in Singapore is bright, but only if we continue to innovate and adapt to the regulatory landscape.

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Fintech has revolutionalised the payments industry and apart from the grand global success, its presence in the Southeast Asian market has attracted many giants from all over the globe to invest and branch out to this region.

Online shopping, food ordering, online taxis, and even money lending are now powered through digital tools by fintechs. But, the most interesting part is the attraction of giants such asGojek, Uber, etcetera to invest in the fintech industries of Southeast Asian markets. 

As the digital financial services tend to generate annual revenue of US$38 billion in Southeast Asian markets by 2025, which is way more than the annual revenue of US$11 billion generated by far in 2019, I look at what led to its exponential growth.

Business models 

There are several vital business models being used by fintech companies in the Southeast Asian region. But, among all the business models the two highest-grossing business models are digital payments and digital lending services.

 

Digital lending services have already made a mark in the global markets and with the rise of digital lending in the Southeast Asian region, there have been new players emerging in the market infusing more capital. But, next to it is the most prolific business model for revenue– digital payments!

Also Read: Fintechs often encounter issues translating a POC into a production order, finds study

Digital payments have been the pioneer of all the digital financial services. It is set to cross the mark of US$1 trillion revenue by the year 2025 and this goes to show that the digital payments business model has been the prime focus for many new and old players in the Southeast Asian fintech industry.

New kids on the block

Fintech industry in this region is quite segregated and there has been no monopoly among the players. But, there has been a tight competition between the local and the global players. Some of the local players are gaining high due to the local presence over the years.

Top five fintech companies in Southeast Asia:

1. Tookitaki
   A Singapore-based enterprise fintech software solution provider.
2. Incomlend
   A Singapore-based online multi-currency invoice exchange platform.
3. Sunday INS Ltd.
   An AI-based insurance and claims solution provider.
4. Growpal
   An Indonesian funds distribution and funding management services provider.
5. Funding Societies
   A Malaysian finance and investment management provider for small businesses.

Consumer trends

As the fintech industry is rising to its peak, the Southeast Asian fintech market set a new annual record with US$701 million raised throughout the third quarter of 2019. Consumer trends have seen a fundamental shift in the adoption of new Fintech technologies.

With the digitisation of the fintech products and adoption of AI in the efficient management of financial services, it is creating new opportunities and new markets to be explored.

Also Read: Swiss fintech incubator F10 enters Singapore, soon to kick off accelerator programme

Many chatbots and AI-based startups are gaining traction and the most interesting part is the adoption and trust of consumers in these technologies for the management of their finances.

Innovative footholds

Innovations have found a new foothold in the fintech industry in the Southeast Asian region. The biggest innovative adoption for fintech in the region has been AI-based, machine learning and Natural Language Programming (NLP). 

Banks have the problem of storing BigData, process them and analyse them to design personalised financial products for their consumers, which can be delivered through highly reactive real-time apps developed through mobile app development. But, with the AI-based technologies and power of cognitive computing solutions, this has been achieved by several Southeast Asian banks and financial service providers.

Digital lending has been a popular innovation in the fintech industry. With modern technologies and innovations in data processing and predictive analysis, the digital lending paradigm has grown more personalised and custom-tailored for the Southeast Asian markets.

What does the future hold

The future of fintech evolution in the Southeast Asian markets lies in the innovations and development of some key factors. Connectivity is one of the important factors as the fintech industry is moving more towards digital expansion. In countries such as Indonesia, Philippines, Vietnam, and Thailand; rural areas have huge internet connectivity gaps.

Higher broadband access and digital literacy can change this scenario and bring in more users and consumers from rural areas. There are several other challenges to be overcome. Like the once where a centralised payment infrastructure is in need to reduce the hassles of cross-border payment regulations and issues.

Also Read: Strengthening its expansion into fintech, Grab introduces GrabPay Card

Countries such as Indonesia, Vietnam, and Myanmar need some data protection regulations. Though Singapore, Malaysia, and the Philippines do have data regulations for users. Other concerns over cross-border data flow and issues pertaining to the digital trade need to be addressed.

About 47 per cent of fintech Startups in the region depend upon the loans for funding and that is the key issue to be addressed for the fintech industry’s development in the region. This needs to be realised and more funding and venture capital should be infused into the startups and digital financial service providers.

So, if you are a financial startup, looking to storm into the fintech industry of the Southeast Asian market, then this the right time for you to cash in!

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This article was first published on December 20, 2019

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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.

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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. 

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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.

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