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You are a visionary. Eyes set on top of the hill. Seeing your startup as the next big thing. And five years down the line— you have a huge customer base, money flooding in and your startup scaled into a huge organisation.

It feels good. 

But the thing is — to get to the top, your startup has to face challenges. Numerous challenges. 

Talking statistically, 90 per cent of the startups fail due to their own mistakes or ignoring the obstacles in their way that becomes a perfect recipe for “self-destruction”. So, for every aspiring entrepreneur, it is important to understand the roadblocks in their way.

This article discusses the same obstacles that startups face. I have listed down the five common ones. But the best part is you’ll also get some tips and real-life experiences to overcome them. 

Rake in the moolah

It’s not rocket science. Every startup needs money at varied stages. You need it to validate your idea, developing the MVP, for the product launch, scaling it, marketing, hire staff and the list goes on. No wonder why there are varied funding stages during the startup lifecycle. 

As per a  report by CB Insights, 29 per cent of the startups fail because they ran out of cash. This makes lack of funds one of the main reasons for failure.

Stéphane Guérin, the founder of a marketing tool DashThis, shares his experience on managing money as a bootstrapped startup.

He says, “The fact that we deliberately avoided venture capital funding made conscious spending not only important but necessary. We decided to spend less by working on one feature at a time, releasing the tool with gradual updates and upgrades, by hiring just as gradually, making sure every employee is needed and a good fit with the team.”  

Paige Arnof-Fenn, CEO of Mavens & Moguls, a branding and marketing firm, warns startups to avoid spending money on trivial things. “I recommend not spending money on things such as fancy brochures, letterhead, business cards, etcetera. Until you know your business is launched, I would say to put your budget into things that help fill your pipeline with customers. Getting your URL and a website up and running is key.”

All these alludes one thing – startups must be highly vigilant in spending their money. 

Also Read: How to improve your startup management

DashThis is one of the fastest-growing companies in Canada while Mavens & Moguls is an established name in the branding industry for more than 18 years. Both the founders suggest managing finance consciously and frugally.  As a startup, you can do that by creating a budget and adhering to it. Planning and estimation of income and expense can help your startup in several ways:

– The budget works as a financial compass that gives you the right direction to allocate the money.

– It helps you review your expected metric with the actual achieved.

– A clear budget helps you determine the funding needs of your startup.

– Enables cutting-off unnecessary and unexpected costs.

Finding the right team

Being new in the market and running on scarce capital comes with several struggles — hiring the right talent is one of them. A survey shows that small business owners looking to hire skilled workers face diverse challenges:

• Candidates lack the skill sets they are seeking (59 per cent).
• Have salary expectations that are too high (45 per cent).
• Prefer to work for a large or midsize brand (29 per cent).
• Want benefits that the company does not provide (26 per cent).

Ketan Kapoor, Co-Founder and CEO at Mercer-Mettl confesses that hiring a talented team was a herculean task for him during the initial years. He says, “Everyone is looking for stability and making good money. You just can‘t expect people to leave their well-paying jobs and settle for low-paying roles to explore innovation and learning. Everyone had their doubts about leaving their comfortable cubicles to work in a garage.”

However, the obstacle is not just finding the operations team but also the right co-founders. You need a balanced team of founders with diversified skills to ensure good growth of your business.

• Utilise your network to hire

One of the things that Ketan did during his initial years was he utilised his network to hire the right team. He approached his acquaintances, friends, relatives, and second-degree LinkedIn connections.

• Go remote

When you find it is hard to get the experienced in-house team, outsourcing the work or hiring a remote team can be useful. Platforms such as Upwork, Freelancer, Fiverr and Toptal make hiring quality freelancers easy. Moreover, it also helps you cut the overhead costs of the in-house team. 

Also read: Why remote working is the future for startups

• Get a balanced team

When it comes to your founding team members, make sure your startup gets the benefits from diversified disciplines: technology, design, and marketing. This is often regarded as a hacker, hipster, and hustler — the dream team.

Scaling (at the right time)

Once startups get momentum as they achieve the market fit its time to scale up. However, it’s not the issue with scaling itself but scaling at the right time. 

Cristian Rennella CEO & CoFounder of oMelhorTrato.com an online platform to compare and purchase financial products says premature scaling was the worst mistake they made.

He explains, “We hired more employees than we could afford. It sounds like a very basic error, but it is not. When you’re growing fast and thousands of new problems pop up every day, you’re not always controlling your economy minute by minute.”

He adds that scaling up was not what they thought. They expected more clients and more revenue but several factors such as delay in payments and drop in sales affected their business direly and were on the verge of bankruptcy. 

Cristian’s and his team learned from their mistakes and managed to get out by cutting down their resources. He says, “We had to take a step back to keep standing and then keep walking.”

Now, oMelhorTrato.com has more than 21,500, 000 users in South America including Brazil, Argentina, Chile, Perú, Mexico and Colombia. 

• Understand your early revenue

Revenue is considered as the barometer of financial success in business. So when startups initially generate a good amount of revenue, they start spending it or decide to scale up that results in premature scaling. 

Michael A. Jackson, a serial entrepreneur and investor cites: “As an entrepreneur, there’s always the temptation to grow the sales team at the first sign of revenue traction, but there is always the danger that this early traction is coming from the subset of the market that are early adopters and not the actual market itself.“ So scaling up on the basis of revenue might not be a great idea.

• Pivot

Pivoting refers to changing the fundamentals of the business. It can be changing your market or even your product. There are numerous examples of big brands that have excelled by pivoting. Pinterest was a fashion curation and buying platform, Instagram was a check-in app, YouTube was a video dating site and Nokia was a paper mill. 

Planning your business goals

As an entrepreneur you know setting the goals is critical to the success of your business. They pave a road to the growth and sets you in the right direction.

However, in the face-paced startup environment where entrepreneurs have to wear multiple hats, making plans and working towards it gets quite daunting.

Also Read: Success through planning — a wakeup call for “startup snobs”

Grant Hensel, CEO of Nonprofit Megaphone & RoundUp App says, “One of the most vexing challenges for startups is planning and goal setting because the environment in which the company operates can change quickly. Annual plans or even quarterly objectives can become obsolete in a moment, and leaders can’t afford to wait until the next quarter to re-calibrate.” 

James Ker-Reid, founder and CEO of Sales For Startups explains that a major challenge for startups and scale-ups is striking the balance between ambitious goal-setting and creating actionable plans to achieve them. “It’s easy for there to be a huge gulf between a yearly goal and what to do in the next 90 days or quarter. Often we have goals but haven’t got clarity on how we are going to achieve them,” he adds. 

• Make quarterly goals

Planning and working on your quarterly goals is one of the ways to evaluate the progress and understand what’s working for you. James advice to have a short and clear activity cycle that is linked to the quarterly goals which would correlate to the larger yearly goals. 

• The one thing approach

‘The One Thing’ approach was introduced by Garry Kelly and Jay Papasan in their book under the same name. Grant Hensel uses this same approach for setting a clear and fluid goal for their company.

He explains, “Under this strategy, we set goals for the one most important thing to accomplish in 10 years, 5 years, 3 years, 1 year, 3 months, 1 month, this week and today. As market conditions change, we can respond in real-time, changing our goal at for appropriate time frames.” 

Legal challenges

As a startup, you are prone to face legal challenges but the fact is most of the entrepreneurs often overlook it amidst growing their business. CB insight states 8 per cent of the startups failed due to legal issues.

In their Startup Post Mortem report, entrepreneurs confessed that neglecting the legal part resulted in spending a fortune on lawyers and ultimately shutting down the business.

Also read: The biggest legal traps startups fall into

However, it’s not just external factors such as intellectual property or taxation that breeds vexing legal issues. They can occur from within the company too. For instance, employee agreements and commercial relationships between co-founder.

Do not hesitate to hire a lawyer. The upfront fee you pay for it is quite nominal compared to hefty legal fines you pay to save your business from catastrophe. On the other hand, there are numerous legal resources on the internet such as Startup Lawyer, Startup Company Lawyer, Legal River and more. Use them to understand the legal working and apply to your startup. 

There are numerous pitfalls in the journey and startups are ought to face them. However, awareness and careful planning can help you to avoid these obstacles. Even if you are bogged in one of these, remember that there are many startups that made their way out and are running a successful business.

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Discussion on how Zajil works on the integration of tech and jewellery that is not utilitarian but focuses on the sentimental value of the human experience, using jewellery as a reservoir of the most important messages or moments of our lives.

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This article was first published on nfinitiv.

Image Credit: Sunyu Kim on Unsplash

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China’s Ant Financial applies for a digital banking license in Singapore – e27

China-based fintech operator Ant Financial has announced that it has applied for a digital wholesale banking license in Singapore, following the waves of unicorns trying to ahead each other in obtaining the digital banking license form Monetary Authority of Singapore (MAS), reported e27.

Recently gaming startup Razer and ride-hailing company Grab applying for full banking licenses.

An Ant Financial spokesperson is quoted saying to South China Morning Post: “In line with our commitment to promoting financial inclusion globally, we have submitted an application to the MAS for a digital wholesale banking license. We look forward to contributing to the development of the digital banking landscape in Singapore.”

Tesla cuts price for China-made Model 3 vehicles before delivery- Reuters

US electric vehicle maker Tesla Inc cut the starting price for its China-made Model 3 sedans by 16 per cent to US$42,919 after receiving Chinese subsidies for electric vehicles, according to a Reuters report.

Also Read: Startup of the Month, December: Bambooloo by The Nurturing Co.

The reduction, partly thanks to RMB24,750 of subsidies, from an earlier RMB355,800 is among a slew of adjustments Tesla has made to its sales policy in China, including tweaking prices for car accessories and home charging facilities.

Tesla has said it plans to start delivering cars, made at its $2 billion factory in Shanghai, to the public on Jan. 7.

Hong Kong bourse discusses new listings with Ctrip, Netease – Bloomberg

Hong Kong Exchanges & Clearing Ltd. is discussing secondary listings with Chinese technology companies including Ctrip and Netease Inc. after Alibaba raised US$13 billion in its 2019 share offering in the city, Bloomberg cited people with the matter in its report.

Bourse officials have held follow-up talks with the two US-listed firms about the possibility of a secondary share sale, the people said, requesting not to be named because the matter is private. The discussions are preliminary and subject to change, they added.

Malaysian motorcycle ride-hailing startup Dego Ride is back in business – Says

Malaysia-based motorcycle e-hailing service, Dego Ride, has resumed its operations on the new year’s day with 700 approved riders, Says reported.

According to New Straits Times, the local on-demand ride startup was the first company to introduce motorcycle taxis in Malaysia.

With its signature blue and yellow driver’s uniform, the company was founded by CEO Nabil Feisal Bamadhaj in 2015. Dego Ride then officially launched its services in November 2016 with around 5,000 registered riders at the time.

Just shortly after the operation, the bike-hailing service was banned by previous government Barisan Nasional, stating safety concerns. The impose lasted until last year when Pakatan Harapan, who initially disagreed with the concept, decided to proceed with a six-month trial for motorcycle hailing operations starting January 2020.

With the ban being lifted, the company intends to “provide a solution to the current first and last-mile disconnect from the nearest public transportation systems for those living in the Klang Valley, Shah Alam, and Putrajaya.”

In March, Dego Ride stated that it will expand its services into other regions and states.

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Singapore-based digital payment startup Razer Fintech (Razer) announces that it has submitted its application for the Digital Full Bank License, to be issued by the Monetary Authority of Singapore (MAS). For the bid, Razer Fintech will lead a consortium that will launch a digital bank focussing on the underserved youth and millennials segment.

Razer Fintech said it plans to extend its current fintech offerings to digital banking services by building what it claimed to be the world’s first global youth bank, Razer Youth Bank, to be headquartered in Singapore. Razer believes to have an edge with it being synonymous with a lifestyle brand for the youth and millennials.

The digital bank will be led by Razer Fintech who will take up a 60 per cent majority stake, joined by a consortium of strategic partners who will take up the remaining equity interest in Razer Youth Bank:

• Sheng Siong Holdings, the private vehicle of the Lim brothers, Singaporean entrepreneurs behind one of the largest supermarket chains in Singapore
• FWD, the insurance business of the investment group, Pacific Century Group
• LinkSure Global, a privately owned internet companies in Asia that operates WiFi Master Key, with approximately 800 million monthly active users globally and affiliated with ShengPay, a third-party payment company in China
• Insignia Ventures Partners, an early stage Singaporean technology venture fund focussing on Southeast Asia; and
• Carro, Southeast Asia’s wholesale marketplace for vehicles that has operations across Indonesia, Thailand, Malaysia, and Singapore.

Also Read: A sneak-peek at the state of Malaysia’s fintech ecosystem

The value propositions that Razer Youth Bank aims to deliver are as follows:

• The ability to leverage on Razer’s brand with the global youth and millennial population as audiences to drive adoption
• The understanding of the lifestyle needs of the youths and millennials and the ability to customize relevant products and services
• The technology and fintech expertise with data-driven technology stack to deliver user experiences
• The ecosystem that allows it to collaborate with industry leaders and lifestyle partners to create and deliver bespoke banking solutions to a large underserved demographics; and
• The contribution to Singapore’s continued growth as a global financial centre while embarking on global ambitions.

To do so, Razer has also gathered service providers, product, and technology platform partners to create services and products to Razer Youth Bank such as confidential airline partner, co-working communities JustCo, digital wealth management solutions provider Quantifeed, educational financial content platform Real Vision, multi-asset trading fintech and investment platform Saxo Markets, global travel company SkyScanner, cash management network SoCash, digital lending solutions Turnkey Lender, software-based digital security solution V-Key, and Visa.

Also Read: Here are the 16 most influential fintech personalities in Malaysia

Lee Li Meng, Chief Strategy Officer of Razer Inc. and CEO of Razer Fintech, said: “We hope to be able to contribute to the growth of Singapore as a global financial centre to deliver a new-age and clearly differentiated digital banking proposition for Singaporeans and youth and millennials globally.”

New management appointment

In addition to the announcement on digital banking consortium, Razer also announced the appointment of Edwin Chan as Chief Investment Officer.

His deputy will succeed him in the role of CFO while Tan Chong Neng, who was Senior Vice President, Corporate Controller, appointed CFO.

“These two appointments strengthen our leadership team and leave us well-positioned to continue on our long-term growth trajectory while delivering on our profitability goals,” said Min-Liang Tan, Co-Founder and CEO of Razer.

Also Read: P2P lending fintech Validus closes over US$15.2M Series B funding led by Dutch bank FMO

As Chief Investment Officer, Chan’s new focus will be managing the company’s investment portfolios. This will involve developing both short-term and long-term investment strategies for the company including corporate finance and treasury investments, venture capital investments, and M&A.

As for Tan, who joined the company in 2017, he will bring his over 20 years of experience with stints in Tri-Star Group and Stanley Security Solutions into his new role as CFO.

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Image Credit: Razer

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Kiren Tanna, Co-founder of ZEN Rooms, has announced his resignation from the budget hotel booking startup after a stint of four and half years. He shared his exit in a Twitter post, stating the sentiment of the growth he has witnessed during his tenure.

“From just an idea, ZEN Rooms today is present in 4 countries, growing 4x yoy, best in class CSAT, and a team of more than 500 colleagues!” the statement reads.

Tanna also made remarks of the perfect timing of his decision, highlighting Korean travel group Yanolja’s acquisition earlier this year that made it ZEN Rooms’ current biggest shareholder.

Tanna added that the other co-founder Nathan Boublil will take over fully as CEO while Sean Lee from Yanolja will be Chief Strategy Officer. Lee has been in ZEN Rooms’s Board member since 2018.

Also Read: Korea’s Yanolja invests in ZEN Rooms; competition in budget-hotel space to intensify in SEA

The statement ends with Tanna stating his desire to take a break before resuming his work in the region’s startup community.

“I am advising a few founding teams and completing a few angel investments and looking forward to connecting with and supporting more great entrepreneurs. I also hope to sharpen my guitar and bahasa skill,” he said.

Before founding ZEN Rooms Asia alongside Boublil, Tanna had a stint as CEO in Rocket Internet APAC, and had held CEO position in Foodpanda.

In October 2019, ZEN Rooms received an undisclosed sum in investment from Yanolja, a travel group in South Korea. Hong Kong- and Korea-based Access Ventures has joined as a co-investor in this round.

Also Read: Our hyper-local approach sets us apart from competitors: Amit Saberwal of RedDoorz

Yanolja has acquired stakes from one of ZEN’s early investors and signed a strategic alliance with the Singapore-headquartered company. With this, ZEN’s early investor Asia Internet Holdings (a joint venture of Rocket Internet and Ooredoo Telecom), has exited while other early backers RedBadge Pacific and SBI Korea will remain as investors.

Yanolja, backed by Booking Holdings and GIC, was the lead strategic investor in the company’s US$15M funding round in 2018.

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Picture Credit: ZEN Rooms

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Marketing is as fundamental to a business as its product or services. We might not realise it but a lot of products that we know today became popularly known because of their marketing campaigns.

Take the fidget spinner as an example. Do you ever wonder why it became so popular even though it was first designed for people struggling with psychological stress, anxiety and other neurological disorders such as ADHD and Autism?

It was due to the amazingly crafted marketing campaign that made it look like fun and something that everyone could play with.

Marketing can make or break your business

This is just one example of how marketing can make a product spread like a wildfire among an audience. But, you can’t just make anything up and expect it to become an instant hit overnight.

Customers today are much smarter than they were a decade ago and understand the difference between clickbait and real value. A lot of marketers start cooking up fancy campaigns for different channels without even realising the value that a product adds to a customer’s life. Moreover, there are different segments of customers in the market with their individual needs and demands.

The same product could have a different meaning for a student and a professional. And quintessentially, if you are targeting both of them, your marketing campaigns must be able to speak to them individually.

The problem with today’s campaigns is that when customers look at it, they feel like it’s addressed to the masses, instead of them.

The point is if brands don’t care enough to speak to the needs of an individual customer, why customers should be interested in their product or services. And then the quality of your product or service doesn’t even come into consideration.

Also Read: How AI can benefit marketers in 2019

Marketing in today’s world has the potential to make or break your business, which is why successful campaigns are designed based on data. Data forms the foundation of a business’s marketing strategy. This means that marketers must dive down deep into it and form strategies that appeal to an individual segment of customers.

However, with the advancement of technology, there’s a lot that marketers can do without having to fuss over the tiresome processes.

AI and marketing

Artificial intelligence and machine learning are on an expansion spree across the world. Every other industry and organization is taking measures to implement AI in different areas. And marketing is no exception to it.

Statistics suggest that the beginning of 2020 will see more than 50 per cent of marketers adopt AI or ML in some form. Marketers are using AI for more than a few reasons, but most importantly to carve a niche for themselves in the market.

The cutthroat competition is here to stay in the market and AI is the key for marketers to differentiate themselves from their competitors. One of the biggest factors that must be taken into consideration for standing out in the market is personalisation.

While everyone is vying for the top spot out there, it is those who utilise personalisation, make it big.

The reality is that everyone is trying to guess what the customers want and the way that they want it using different methods. While some are using their intuition, others rely on traditional practices.

AI, on the other hand, can be the difference between spending endless time analyzing customer demands and smoothly eliminating all the guesswork with concrete data.

As 2020 draws upon us, it will only be a matter of time before everyone starts seeing the benefits of AI in designing successful campaigns.

After all, it does dive into several data points all at once, providing real-time insights and recommendations along with automating several key processes at once. It removes the need for any mundane task and leaves humans to more essential jobs of strategising and planning.

Greater engagement

There are several ways in which AI is powering greater engagement for people. First marketers can utilise the historical data to analyse which of their campaigns worked and which didn’t.

Based upon the nature of the customer, the market timing, and other relevant factors, businesses can enhance their strategies for sales and boost customer engagement by many folds.

This enables the marketer to understand the segment of customers who are likely to engage with communication on a particular channel or medium. Similarly, based on the previous buying patterns of the customer, the target channels for further campaigns can be determined with ease.

Also read: Why AI will be critical to brand strategy

Consider, for example, the ML-powered bots used by organisations such as Sephora and Levi’s. These bots ask the customer questions about their products that determine factors around their immediate needs and future preferences.

In contrast to a retail salesman, these bots do the perfect jobs by handling a significant amount of traffic adequately and answering some of the basic questions of the customer effortlessly.

The era of personalisation

If businesses have to emerge as huge successes, they have to pay attention to personalization, no matter what. AI can help marketers personalise their campaigns when it comes to ads on different platforms, suggesting recommendations and others.

It also provides them with content that is relevant to each customer along with the appropriate timing, when most customers are active on a particular Java platform.

Similarly, personalised recommendations are becoming an instant hit these days. Take Amazon for an example. It studies the customer’s browsing history, past purchases along with other factors to suggest those products, they’d like to buy in advance.

All this keeps a peek into how AI can help businesses understand customer behavioural insights and capitalise on them.

The scope of AI in marketing is endless. Businesses can accomplish a lot without having to invest in many human resources, with one self-sufficient AI.

And since every other brand is using it out there to entice and engage the customers, not capitalising on the cutting edge technology will only leave you far behind in the market race.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas and earn a byline by submitting a post.

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Vietnam’s burgeoning IT sector is showing no signs of slowing down and continues to generate strong revenue for local and foreign players alike.

Hanoi and Ho Chi Minh City, in particular, have developed an extraordinary IT ecosystem and seeing a mushroom growth of startups. Meanwhile, there has been considerable growth in the influx of foreign investment as well.

The southern province of Binh Doung has just recently licensed the Internet Service Supply Project of Japan’s NTT Group with a registered capital of US$171 million.

In many ways, this demonstrates how much promise IT truly holds in the country.

According to the e-Conomy Southeast Asia report of 2019, the growth rate of Vietnam’s internet economy is 40 per cent, making it a leader in this sector alongside Indonesia in Southeast Asia.

It’s no secret that the nation’s IT industry is ripe with opportunities. However, one question that many investors and entrepreneurs alike would be asking is which of the subsectors has the highest potential of turning a big profit.

So using the latest data, I have shortlisted four most lucrative niches of IT in Vietnam.

Ecommerce

Statista’s Digital Market Outlook (DMO) study states that nearly 50 million internet users in Vietnam bought consumer goods online in 2018. Although this data is from a year ago, recent stats are no different as the trend has shifted further towards eCommerce.

Surprisingly, travel purchases dominate this sector with e-travel being worth US$3.5 billion. Among consumer goods; electronics and fashion items were mostly purchased followed by food and furniture.

Also read: What is the state of Vietnam’s e-commerce industry?

Customers in the country prefer popular Southeast Asian platforms like Shopee and Lazada for most of their internet shopping while domestic firms like Sendo and Tiki also maintain a significant share in the market.

Around 70 per cent of Vietnam’s ecommerce sales are conducted in Hanoi and Ho Chi Minh City. However, rural internet connectively has greatly improved in recent years and this has created a great opportunity for eCommerce platforms to target the country’s biggest population.

With such vast potential, an industry complementary to eCommerce is already emerging in Vietnam.

Affiliate marketers are acting as a bridge between consumers and online retailers. And companies themselves are teaming up with different online influencers for coupon marketing to drive more customers towards their brands.

At the same time, eCommerce platforms targeting different niches are popping up across the country.

AI

While Vietnam is far from being the hub of AI in Southeast Asia, the potential of this technology is strong in the country. Applications of AI like the Internet of Things (IoT) and Machine Learning in areas such as healthcare, manufacturing, e-commerce, and agriculture can reap extraordinary benefits for all stakeholders involved.

Even with a lack of infrastructure, large databases and resources –companies are implementing AI projects.

Vietnamese telecommunications company Viettel uses AI in thwarting attacks by cybercriminals and assist business with their IT security. Examples such as this exist across the IT industry.

Likewise, International tech companies that create AI technologies are also exploring Vietnam but due to lack of highly trained resources, the progress on this end has been rather slow.

However, 2020 will be a big year for automation and like every other facet of IT –it’s expected that ventures related to Artificial Intelligence will gain important ground in the Southeast Asian country.

Fintech

Fintech remains a pillar of Vietnam’s entire digital economics landscape. And with the current efforts to accelerate its growth, the industry is expected to reach the US$7.8 billion in revenue in the coming year.

Also read: How Vietnam is accelerating fintech growth

The country’s emerging middle class coupled with affordable internet access has created an environment where fintech is thriving. Around 120 companies currently offer services like digital payments, insurance, and risk management.

Vietnam’s fintech has managed to create headlines across the world with startups like Momo being featured among the top fintech firms and Money Lover ranking first in financial management apps.

Going forward, blockchain and cryptocurrency will play a key role in this sector. Companies like Kyber Network and TomoChain are already leading the way in making the crypto transaction easier.

As the world, in general, comes around to cryptos, blockchain will become an integral part of Vietnam’s fintech ecosystem.

SaaS

A SaaS company KiotViet recently raised the US $6 million in Series A funding. In 2018, a startup named Base was able to gain the US$1.3 million in pre-Series A funding round for its regional expansion.

It’s quite clear that investors see potential in this sub-sector and they’ve every reason to think this way. SaaS plays a significant role in the Vietnamese cloud service market which is expected to reach US$291 million.

Cloud is a cost-efficient option for small businesses that do not possess the resources to install advanced hardware and software. However, large enterprises have also taken a liking to this technology.

With the recent commercial boom in the country, there’s a growing need for data storage in the country and this has created a significant SaaS-based B2B market.

The expanding economy of Vietnam will drive further growth in the SaaS sector, creating space for more startups and small businesses to provide third-party software solutions.

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Editor’s note: e27 aims to foster thought leadership by publishing contributions from the community. Become a thought leader in the community and share your opinions or ideas by submitting a post.

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At the outset of 2019, the international digital assets market was still in the grip of “crypto winter”, as the speculative boom which saw the market grow more than 44 times in size over the course of 2017 ended in a market crash and subsequent market correction.

Around 2,000 global cryptocurrencies lost a total of 80 per cent of their aggregate market cap in that time, as speculative investing dropped well below previous price floors. Trust in the digital assets industry had reached a new low as well, and the former glory days of bitcoin trading at US$20,000 seemed long past. 

2019, however, has turned out to be a better year for the digital asset industry. Confusion and uncertainty in traditional markets this year led to increased investor interest in diversifying their portfolios, and in the process, digital assets gained newfound acceptability in the eyes of retail and institutional actors.

This increased investor interest seems set to continue as we enter 2020, as the result of unresolved political and economic tensions that took place this year.

Trade ties between the US and China are still unsettled despite a tentative deal on the table, and while the results of Britain’s recent general election may put it on firmer ground to achieving a Brexit deal, its future relationship with the European Union is still unclear.

Throughout Asia, the political situation remains uncertain in Hong Kong, while Japan and South Korea struggle to recover from deteriorating relations. 

Breaking the ice

In reaction to the economic and political upheavals of the past twelve months, retail and institutional investors have been looking outside traditional financial markets, and finding new appeal in “recession-proof” asset classes such as gold and digital assets.

Bitcoin received a boost in investor confidence this year, as it joins the ranks of gold as a safe-haven asset. In fact, there is a striking correlation in the market trajectories of bitcoin and gold over the course of the year, as the two reached almost perfect lockstep in the summer months.

As a wider class of investors turn to cryptocurrency as a dependable store of value unaffected by the fluctuations of centralised, traditional markets, we can expect to see other digital assets to see increasing investments over the coming months. 

Also read: Initial coin offerings: the next-gen startups that never were

Where cryptocurrencies were once derided and criticised by institutional actors, we have seen major consumer tech and financial players moving into this space.

Facebook announced its Libra project to mixed response, and JP Morgan launched its own digital token earlier this year, against the backdrop of continued rumours of the development of a state-backed digital currency in China.

As a result of the renewed popularity of digital assets, regulators across the world have been offering more clarity on how they intend to treat this new asset class in the future, reducing some of the uncertainty in investing in fintech solutions.

If the global crypto industry crash was a “crypto winter”, then perhaps we are now seeing a budding “crypto spring”, bringing with it a period of healthy growth, institutional adoption, and widespread acceptance by mainstream consumers. 

New year, new obstacles

Taking the renewed optimism of investors and digital assets’ enhanced legitimacy in stride, a vista of opportunities awaits the industry in 2020, as institutional and retail consumers increasingly begin to adopt fintech and digital assets in recognition of their benefits.

Improved trust in cryptocurrency exchanges and wider acceptance of digital assets as a form of payment will lend increased liquidity to the market, decreasing volatility in the long-run. As we move beyond the early days of “crypto spring”, however, there are still obstacles that will need to be overcome if we expect to meet the needs of a more diverse group of new users. 

In particular, the user experience in buying and trading digital assets will need to be improved if it is to match the smooth usability and slick interfaces offered by the likes of Spotify, Netflix, and Amazon—which consumers have come to expect.

The most successful cryptocurrency exchanges and fintech platforms will be those that can deliver a streamlined experience, without compromising on security and user safety.  

Also read: 5 developing trends that will define fintech in 2020

A shift towards client-mindedness and user experience seems imminent if the industry is to achieve mainstream adoption, and educating investors on decentralised technology and digital assets should be a priority.

2020: A maturing ecosystem

After an extended “crypto winter”, spring is in the air for the industry going into 2020. As the world continues to experience economic and political uncertainty, the future for digital assets is bright as the market rebounds and gains enhanced legitimacy as an asset class for retail investors and institutional actors looking beyond traditional financial markets.

With more capital flowing into the space in the new year, regulation will surely follow. As institutions such as Facebook and JP Morgan entering the blockchain sector, regulators are sure to take note. 

Going into 2020, there is, therefore, a greater incentive for major players within the industry to establish an open dialogue with lawmakers, ensuring that they have a say in any regulatory framework applied to the digital assets sector.

The industry has weathered some difficult times in the past year, but we have undoubtedly emerged better and stronger for it. Now on to the next one.

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Grab Holdings Inc announces that it has formed a consortium to apply for a digital full bank licence in Singapore with Singtel, the communications technology group.

Grab will have a 60 percent stake in the consortium entity while Singtel will hold a 40 percent stake.

In a statement, it is stated that Grab and Singtel seek to contribute to the financial services sector with a differentiated offering that addresses the unmet and underserved needs of consumer and enterprise segments in Singapore.

“The digital bank will aim to cater to the needs of digital-first consumers, who have come to expect greater convenience and personalisation, and SMEs which cite lack of access to credit as a key pain point,” the statement reads.

The consortium will offer relevant products and services and become a partner for consumers and enterprises. It plans to include banking and financial services into the everyday lives of Grab and Singtel’s base of customers.

Also Read: The factors driving the success of Grab and what it took to become a market leader

Reuben Lai, Senior Managing Director, Grab Financial Group, said, “In the past two years, we have launched and scaled financial services such as e-money, lending, and insurance distribution into Southeast Asia’s fintech ecosystem. The natural next step is to build a customer-centric digital bank that will deliver a variety of banking and financial services that are accessible, transparent, and affordable.”

Arthur Lang, CEO of Singtel’s International Group, said, “Just as we’ve been building an ecosystem of digital services to improve the way customers live, work, and play, we want to fundamentally change the way consumers and enterprises bank.”

“Together with Grab, which has extensive digital expertise and experience in this region, we have a set of assets and synergies to make banking more accessible and intuitive, and deliver much-needed product simplicity, speed, and affordability,” he continued

If successful in their application, Grab and Singtel said it will present a new banking experience for everyday banking needs with personalisation, financial technology, and innovation.

Earlier in December, ride-hailing giant Grab announced the launch of GrabPay Card, a numberless physical and digital card that enables its users to access rewards ecosystem and conduct payments.

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

The card is the result of a partnership between the company and Mastercard, which was first announced in October last year.

It will enable users to transact in any online or offline merchants that accept Mastercard around the world, regardless of their banking status.

In June, the Monetary Authority of Singapore (MAS) announced that the government is set to issue up to five digital banking licenses to provide an opportunity for non-bank finance industry players to enter the banking scene, which is currently dominated by traditional banking institutions.

Several companies have expressed their interests in applying for the Singapore digital banking license, including Grab and Razer.

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Image credit: Grab

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Fintech lending platform Investree has announced that it has acquired half of the stake in Mbiz, a B2B procurement startup, DailySocial reported.

No financial details were disclosed.

The acquisition is an effort to build an infrastructure to support SMEs beyond the financial scope.

According to Co-founder Investree Adrian Gunadi, with this deal, it will sit as a Board observer at Mbiz, a position at a Director level with no business decision making a vote.

The acquisition of Mbiz was a decision made for “SMEs digitisation through e-procurement that is done with a transparent, reliable, and competent product and service supply”.

Through Mbiz.co.id and Mbizmarket platforms, SMEs together with product and service vendors will get capital access to market its businesses. The pressing issue all this time is that vendors often have troubles to continue with production because of unfriendly cash-flow terms.

Also Read: B2B/G e-commerce platform Mbiz announces Series A, reveals milestones in 1st anniversary

With this synergy, the companies expect to be a support for companies and suppliers to buy them time, space, and the ability to pay their vendors to continue with their business.

“Moving forward, Investree will offer not only financial service but also SMEs-addressed solution. Instead of building our own procurement infrastructure, it’s better to form a partnership and become a stakeholder,” Gunadi explained.

Gunadi added that the acquisition process was started almost a year ago, beginning with capital financing for suppliers. There are several Mbiz users that are vendors and buyers who already enjoyed the US$6.5 million financings.

Indonesian SMEs only account for 8 per cent or 3,92 million out of 59,2 million SMEs in the country. In a report by McKinsey & Co, it’s stated that the country’s e-procurement potential will reach US$125 billion in 2025, estimated from the total number made of global corporate services (US$18 billion), B2B marketplace (US$76 billion), dan B2B services (US$36 billion).

CEO Mbiz Rizal Paramarta said: “So far we’ve only facilitated buyers and sellers with a platform to transact, while the big picture has always been about an end-to-end ecosystem for procurement solution. We entered into the early stage of financing because B2B transaction is entirely dependent on the capital need.”

Also Read: Indonesian P2P lending site Investree to enter Vietnam, launches sharia-based service

Investree is the second external investor for Mbiz after Tokyo Century Corporation in its Series A funding in 2017, receiving US$72 million.

Mbiz is the Multipolar’s subsidiary, a part of Lippo Group established in 2015. Lippo was also the angel investor that backed Mbiz in its early days.

Investree plans to expand to the Philippines in January next year, which aims to provide e-procurement financing solutions. Gunadi confirmed that it will be the first of the upcoming acquisitions of SMEs-targeted companies in Southeast Asia.

Investree already had operations in Thailand and Vietnam under the name eLoan. “We may change eLoan into Investree Vietnam once the regulation is done,” said Gunadi.

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Image Credit: Investree

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