SINGAPORE & ANDHRA PRADESH, March 10, 2017 — Marvelstone Group, the private investment group behind the world’s largest fintech hub LATTICE80, has signed a memorandum of understanding with the Government of Andhra Pradesh in India to open the first LATTICE80 location outside of Singapore. LATTICE80 Vizag will be located in Fintech Valley Vizag’s Fintech Tower. As the largest city in the state of Andhra Pradesh, Vizag is already becoming home to some of India’s most innovative startup companies in the financial services space and beyond.
As part of the agreement, LATTICE80 will run training programmes to train 1,000 ICT professionals in India every year. The goal is to help link the community in Singapore and India, and encourage co-innovation in key new technologies such as digital and mobile payments, blockchain and distributed ledgers, Big Data, flexible platforms (API), and more. The new space is expected to open in Q3 this year.
“Less than four months ago, in November last year, we set up LATTICE80 in Singapore to fully support the government’s smart nation vision to transform into a smart financial centre. Now, we are happy to be part of the new Vizag-MAS (Monetary Authority of Singapore) partnership to support Fintech Valley Vizag and the Government of Andhra Pradesh in India. The goal is to bring together industry, academia and investors to innovate, co-create and build the fintech ecosystem,” said Gina Heng, CEO, Marvelstone Group.
“We see opportunities in Vizag to contribute in various ways. We are delighted to collaborate and launch LATTICE80 Vizag to benefit the fintech sector in India. By launching LATTICE80 Vizag, we want to facilitate knowledge sharing and establish partnerships between universities based in and affiliated to Singapore and Andhra Pradesh,” said Joe Seunghyun Cho, Chairman, Marvelstone Group.
“LATTICE80’s success will depend on the people and community that we bring together. With Singapore as our base, we hope to reach out to new markets for fintech startups to develop and collaborate. We are very happy to start our overseas journey with amazing fintech startups and partners. We thank the Government of Andhra Pradesh and Vizag Fintech Valley for giving us the opportunity to learn and grow together,” said Joel Ko, Managing Partner, Marvelstone Group.
India’s fintech market is forecast to be worth US$2.4 billion by 2020, a two-fold increase on the market size in 2016, according to KPMG. The state of Andhra Pradesh has the potential of 50 million fintech users, according to data cited by Fintech Valley Vizag.
“The Andhra Pradesh Government is not merely trying to create the right ecosystem for promoting fintech in the state, but to develop a whole fintech culture. It wants to conduct a series of events to promote fintech in the city and the state. LATTICE80 will help the government in the endeavour,” said J A Chowdary, special adviser to the Andhra Pradesh Chief Minister on IT.
The LATTICE80 philosophy is based on the physical structure of a lattice. It represents an open framework where companies can build upon one another’s strengths. LATTICE80’s objectives include helping fintech startups grow and expand their businesses, supporting existing corporates and financial institutions in their adoption of innovation, and serving as a bridge for both the public and private sectors.
SINGAPORE: Marvelstone Group will host a global FinTech summit in Singapore on 16th March, 2017, to bring together FinTech gurus of the region. The Fintech Global Summit aims to serve as a platform for learning, interaction and engagement with global FinTech minds. The summit will feature discussions on the latest innovations in technology that are fuelling the growth of FinTech. This includes the advent of crowdfunding, robo-investors, blockchain, big data, mobile payments and transfers. To tie it all together, the latest in cybersecurity development and regulatory measures that aid the growth of the sector will also be brought forward.
Key speakers at the event include Sopnendu Mohanty, Chief Fintech Officer at the Monetary Authority of Singapore and Neal Cross, Chief Innovation Officer at DBS Bank.
The day long event will be conducted in the form of talks and panel discussions, while also allowing attendees to network and learn about the present developments that are shaping up the future of FinTech. It will take place at what is know as the world’s largest FinTech hub, LATTICE80, which was launched in November 2016 and has quickly become the centre of the FinTech community in Singapore.
Joe Seunghyun Cho, Chairman of Marvelstone Group, said: “Fostering a strong sense of community within the FinTech world has always been the vision behind Marvelstone Group’s activities. We started off as a private equity business at the core, but soon dived into complementary businesses to facilitate the building of knowledge, relationships and strength. This, I believe, will provide enhanced value to our partners, investors, companies we invest in, and other key stakeholders. FinTech Global Summit in Singapore is a culmination of all these ideas and we are excited about it.”
More details about the event and tickets to the event are available on Eventbrite.
Marvelstone Group is a private investment group that develops and invests in growing businesses. With finance as its core strength, it also makes diversified investments in technology, real estate, infrastructure, energy and media.
LATTICE80, the world’s largest FinTech Hub, prides itself on creating an ecosystem for FinTech startups to collaborate, connect and co-create. The mission of the independent not for profit hub is to offer FinTech companies the opportunity to tap on the rich network and resources to develop smart technologies and springboard to international success. It boasts an impressive technological infrastructure that corporate members can leverage & lay a foundation to create a truly unique world-class community.
SINGAPORE: It has been an exciting 3 days at Startupbootcamp Fintech’s Singapore HQ, LATTICE80 this last weekend. Selection Days were on in which 19 startups from several countries took part. Early stage startups that have at least a beta product were invited for the selection process. 12 startups, from 8 different countries, have been finally chosen to be part of a 3 month accelerator programme.
The 12 startups will have access to Startupbootcamp’s masterclasses, corporate partners, desk-space at LATTICE80, investor access, and a host of other facilities to launch themselves towards a successful future.
A Demo Day in July will showcase the cohort’s learnings during the programme before investors, partners and mentors. The Monetary Authority of Singapore (MAS) will support the startups by providing guidance on regulatory matters.
Here’s the list:
Jumper.ai(India) The fastest way to buy, sell and collect payments everywhere within one unified AI interface.
ScalendTechnologies (India) Securely integrate data from different sources, take decisions, get insights, and focus on actively acquiring and engaging with customers in real time.
Fugle (Taiwan) The best digital brokerage firm for self-directed investors.
MostShorted.com (United Kingdom) Collecting, aggregating & providing data on hedge fund and activist shorts to improve decision making.
Smart Trade (Japan) Smart Trade is a trading platform that offers a web & mobile interface to develop, use and share AI algorithms.
Tixguru (Taiwan) Brings the best trading experience to you by offering a quant platform & AI Robot advisor.
Welltrado (Lithuania) P2P lending metasearch engine, an innovative alternative investment marketplace.
Morakot Technology(Cambodia) Simple and reliable core-banking system for microfinance institutions and banks.
Small Ticket(South Korea) Remodeling the distribution channel in providing insurance products via its own P2P insurance service platform, based on connected groups and controlled risks.
CherryPay(Taiwan) Faster, cheaper and more convenient international P2P money transfer matching platform.
AIM (South Korea) Automated Investment Service, a mobile-first robo advisor that helps retail users manage their wealth.
SmartFolios (Singapore) Online advisory and investment platform empowering investors to meet their investment goals.
SINGAPORE – The Open Vault at OCBC is launching a 12-week co-innovation accelerator, powered by TAG.PASS. This is an opportunity for those looking to work with a leading Singapore bank to build and offer solutions that address commercial challenges in the FinTech and InsurTech space.
The accelerator starts in May 2017 and will culminate with a Demo Day in Jul 2017. Thereafter, participants will be primed to continue into the pilot and implementation stages. The commercialisation of the solutions developed is the ultimate goal of the accelerator and it will provide participants with all the necessary support to achieve this objective. They will be provided with funds for POC and an opportunity to tap into OCBC’s Data Sandbox to experiment with real-life anonymised customer data to develop solutions that can be rapidly commercialised.
By joining OCBC and testing your solutions with a robust customer base in Asia Pacific, one can go to market with a refined product that addresses actual commercial problems. An opportunity to grow and scale.
In a country where cash has usually been the go to medium for both small and large transactions, the growing number of FinTech companies in India are gradually introducing the country to a digital world of financial services.
Though cryptocurrencies are currently seeing a rise globally, it is still the more traditional services like lending and access to banking through technology that is the highlight of the Indian market. And it all seems to be working from the statistics available. The unbanked population in India in 2011 was about 557 million. In a span of barely 4 years, by 2015, this number had come down to 233 million – which is a sharp drop of almost half – as per a report made available via the Internet and Mobile Association of India (IAMAI) and Payments Council of India (PCI). The Indian government launched the Pradhan Mantri Jan Dhan Yojana in 2014 to ensure every household in India has a bank account, and that’s the year in which about 182 million bank accounts were opened. That’s the average citizen’s side of things.
When a market the size of India with about 1.3 billion citizens transacts mostly using cash, a record of about 68% of all transactions in the nation just does not exist. This leads to a situation where those doing business in cash can easily evade sales and income tax. Which in return puts a strain on the government’s ability to spend on infrastructure, healthcare, education, etc. of what is now the world’s fastest growing economy.
To curb such common practice to a certain extent, the Government of India on 08th November, 2016 announced the immediate withdrawal of the high-denomination Rs 500 and Rs 1000 notes from circulation in the nation. The announcement which was unscheduled put the Reserve Bank of India (RBI) and the entire banking system in a frenzy. As of 31st March 2016, the RBI annual report had stated that there were currency notes valued at 16.42 trillion rupees (USD 240 billion) in circulation – 86% of which, valued at 14.18 trillion rupees (USD 210 billion), were the Rs 500 and Rs 1000 notes.
While India is still springing back from the shortage of currency notes, the adoption of plastic money in the general and recently banked population went up. At the same time several mobile wallet startups, who rely on their accounts being funded through a bank account transfer, saw an opportunity to drive adoption of P2P transfers via mobile phones. This worked especially in scenarios where smaller merchants did not have access to POS machines as they had always done business with cash. In a country with 1 billion mobile subscribers (as of 2016), where adoption of such wallets was still a challenge in the physical world, the government’s push for a Digital India did the trick.
With access to bank accounts, digital services such as e-commerce, and increasingly improving internet connectivity the average Indian citizen is not just banking online. Financial services such as payment gateways that facilitate e-commerce, P2P loans, lending for SMEs, low-cost POS machines, selling insurance online are all seeing definite growth.
Here are 11 FinTech startups in India to know about:
PayTM started off as a mobile recharge and utility bill payments. Funding from various large investors as Ant Financial, Alibaba Group the company has quickly evolved by providing varied services. These range from a mobile wallet, a dedicated e-commerce arm, to an RBI approved Payments Bank.
Total funding: $760 million Key Investors: Ant Financial, Alibaba Group, Mountain Capital, HDFC Bank, ICICI Bank, SAIF Partners, Saama Capital, Silicon Valley Bank, Reliance Capital, MediaTek Founder: Vijay Shekhar Sharma Founded year: 2010
FreeCharge, known for its quirky and fresh interface, too started off in the mobile recharge and bill payments space. The acquisition of the company by Snapdeal, a major e-commerce player in India, in Apr 2015 allowed FreeCharge to build its presence in the digital payments space as well. Post the acquisition, in September 2015, the company launched a digital wallet to facilitate transactions across the FreeCharge and Snapdeal platforms.
Total funding: $117 million Key Investors: Sequoia Capital, Sofina, ruNet, Tandon Group, Tybourne Capital Management, InnoVen Capital Founders: Kunal Shah, Sandeep Tandon Founded year: 2010
This digital payments startup in India founded by two young graduates out of Indian Institute of Technology, Roorkee seems to be getting the right kind of attention for its agility. Chosen as one of NASSCOM’s ‘League of 10’ companies, raising investment at YCombinator’s Winter 2015 demo day, and getting a strategic investment from MasterCard as part of their ‘Start Path’ programme (the only one by the card scheme in an Indian FinTech company) all put together brought Razorpay in the limelight.
Total funding: $11.6 million Key Investors: Tiger Global, MasterCard, YCombinator, Matrix Partners India, Kunal Bahl (Founder, SnapDeal), Kunal Shah (Founder, Freecharge), GMO VenturePartners Founders: Shashank Kumar, Harshil Mathur Founded year: 2013
BankBazaar brings access to comparing and applying for credit-based services from banks to its customers. This includes loans and credit cards. In 2015, an arm of BankBazaar called BankBazaar Insurance also brought the facility to buy insurance online through the website. The online portal claims to have about 8 million customers.
Total funding: $80 million Key Investors: Amazon, Sequoia Capital, Walden International, Eight Roads Ventures Founders: Adhil Shetty, Arjun Shetty, Rati Shetty Founded year: 2008
LendingKart is an online enabler of access to collateral free working capital loans for small-and-medium-enterprises (SMEs) in India. The company refers to the applicant’s cash flow, credit history and customer experiences to evaluate the business. Funds offered range from INR 50 thousand to INR 1 crore (100 million rupees) with tenure of 1 month to 1 year. For a country of vast geographic and social scale, the service has gained quite some popularity while being based out of Ahmedabad in the state of Gujarat.
Total funding: $42 million Key Investors: IFMR Trust, Saama Capital, Mayfield, Bertelsmann, India Quotient, Bertelsmann India Investments Founders: Harshvardhan Lunia, Mukul Sachan Founded year: 2014
Centred around customer service, transparency and clarity of the terms of various insurance options, PolicyBazaar is one of the largest online insurance brokers in India. Various kinds of insurance are categorised based on varying customer needs. The company has been getting consistent investments and aims to turn into a profitable one in 2017.
Total funding: $83 million Key Investors: Info Edge India, Inventus Capital Partners, Intel Capital, Tiger Global Management, Ribbit Capital, ABG Capital, Steadview Capital, Premji Invest Founders: Yashish Dahiya, Alok Bansal, Avaneesh Nirjar Founded year: 2008
Founded by former Deutsche Bank executive, Bhupinder Singh, InCred provides SMEs, consumer/personal, home and education loans in the Indian market. Backed by another financial executive Anshu Jain, former Deutsche Bank co-CEO, among others gives InCred the hardcore mindset to deliver financial services at scale.
Total funding: $74 million Key Investors: IDFC, Alpha Capital Founder: Bhupinder Singh Founded year: 2016
MobiKwik is another mobile wallet player in India which has recently benefited from the demonetisation in India. Mostly similar in its offering to customers like other competitors, the company has frequently tried various strategies like ‘cash-pick-up at home to load e-wallet’ aimed at the Indian customers habits.
Total funding: $127 million Key Investors: American Express, Sequoia Capital, GMO, MediaTek, NET1, Cisco Investments, Tree Line Investment Management, InnoVen Capital Founders: Upasana Taku, Bipin Preet Singh Founded year: 2009
FINO PayTech is an institutional investor driven company which provides low-cost payment technology. Solutions include biometric-enabled Kiosk Banking for rural market, handheld device based banking transactions with biometric authentication, Financial Inclusion Gateway for effective business correspondent management. The company also works directly in micro-lending and micro-insurance through their Non-Banking Financial Company (NBFC) Intrepid Finance & Leasing.
Total funding: $110.5 million Key Investors: ICICI Bank, IFMR Trust, HSBC Group, Life Insurance Corporation of India, IFC, Blackstone, ICICI Prudential Life Insurance, Intel Capital, Corporation Bank, Legatum, ICICI Lombard, Bharat Petroleum, Union Bank Of India, Indian Bank, Headlands Capital Founders: Rishi Gupta, Rajeev Arora Founded year: 2006
Pine Labs provides retail point-of-sale (POS) machines to offline merchants to facilitate payments acceptance. With an estimated network of about 50000 merchants, the company is now led by CEO Lokvir Kapoor. In 2016, the company appointed former Vodafone CEO Arun Sarin and Visa Global Head of Commercial Business Vicky Bindra as members of its board.
Total funding: $20 million Key Investors: Sequoia Capital, New Atlantic Ventures Founder: Rajul Garg Founded year: 1998
Faircent is a P2P lending platform that connects borrowers and lenders to interact directly. Lenders can individually make offers to borrowers, which the borrower can accept or refuse. Offers are defined in terms of amount to be lent and the applicable interest rate. Both lenders and borrowers can interact and make transactions with multiple people. Faircent claims to eliminate the high margins which banks and financial institutions make on transactions, and pass it on to the customer as a saving on the services availed.
Total funding: $8.25 million Key Investors: Aarin Capital, Brand Capital, JM Financial, M and S Capital Partners Founders: Nitin Gupta, Rajat Gandhi, Vinay Mathews Founded year: 2013
Ned Phillips is the founder and CEO of Bambu, a Singapore-based B2B robo-advisor offering digital wealth services to businesses.
FTA: Can you share a bit about your background and your experiences?
NP: I have been based in Asia since 1991, lived for 13 years in Hong Kong and 13 years in Singapore. I ran my own financial publishing business in the mid 90’s in Hong Kong. I also worked for E*TRADE in Hong Kong and Singapore and ended up being the Managing Director for E*TRADE in Asia.
I then worked in exchange technology from 2007-2012 and built two regional alternative stock exchanges, one of which was with the Singapore Exchange (SGX). In the last three years, I have worked on a variety of Fintech projects including a blockchain exchange and consulting on Asia’s first Robo Advisor.
FTA: Tell us more about Bambu!
NP: It is a Robo Advisor for everyone! We have sophisticated portfolios for knowledgeable investors that can be used by all financial institutions. We also have goal-based savings for the mass market that enables savers to achieve their goals quicker than they think they can. We have brought together world class partners such as Thomson Reuters, Tigerspike and others. We even managed to sign our first client after 2 months of launch!
FTA: How did you come about starting Bambu? And how did your background help in your entrepreneurial journey?
NP: I have started companies, I have invested in companies, I helped launch Asia’s first Robo and I am old enough to have seen a few business cycles so I feel that I have the right skills to make a really good go of it. Also I have been in FinTech since 1999 with E*TRADE. So, it seemed crazy for me not to get involved. I have also consulted on Asia’s first Robo, so I do have the experience in this area.
FTA: What are some of the current challenges that you are wrestling with?
NP: Getting enough staff on board to deal with all the demand is a challenge. FinTech is booming and Singapore is doing a great job at making it achievable. Bambu is in the right place with a great team. We have huge demand and I need more people to help me!
FTA: What are your thoughts about the wealth management and personal finance scene in Asia, and in particular, Singapore.
NP: I think it covers a really wide range. Some of the products are certainly not ideal for everyone, and people with small sums to invest don’t get a fair share of products and services. We see digital adoption rising quickly and that will be great for consumers. We also have great faith in the MAS to help this sector in becoming more efficient and fairly-priced.
FTA: What do you think is lacking in fintech startups in Singapore, or in Asia?
Two things, sales and experience. Too many people build the technology and hope that people will come and find it. They won’t. The thought process of ‘build it and they will come’, really doesn’t work.
Too many young guys build great technology but they don’t go out and sell it the old fashioned way, which is by meeting a lot of potential customers. At Bambu, we meet as many customers as possible. That’s how we managed to sign our first deal two months after launch.
Also, we don’t have enough old experienced people. It’s great to be 23 and keen, but I think being 49 and experienced worths more!
FTA: Do you believe that financial institutions and fintech startups should collaborate, as recently mentioned by MAS? Why do you think so? And how do you think a collaborative strategy can be put in place?
NP: Yes I do, but for some and not all. Banks can learn a lot from the start ups but they need to take risks and be prepared to see some of the firms that they back, fail and to be alright with that. It will help the banks understand what is achievable if you move quickly without legacy. I believe that the banks in Singapore are doing a good job on this.
FTA: If you can give your 20-year-old self some advice, what would you say?
NP: Life has been pretty cool! I have been lucky. I left the UK in 1990 when I was in my twenties with a $100 note in my pocket and a one way ticket to Asia. 26 years later, it is all good. My advice would be to do it all again!
FTA: Who is your biggest inspiration or drive to do what you are doing?
NP: First and foremost, my family. Secondly, myself. I know I can make this a successful business and I want to prove that I can do it. I have been a competitive amateur athlete for 20 years, and have been lucky enough to meet most of my goals. I have run over a 100KM in one go on many occasions. I have been to the Ironman World Championship. When I set a goal, I get pretty focused to achieve it. Same with Bambu!
FTA: What’s next for you and for Bambu?
NP: In endurance sport, we have a phrase when we are training, “Chop wood, carry water”. It means work hard, focus on the task day-by-day and the outcome will take off itself. Every day I put all my effort into growing Bambu. Sales, product, marketing staff. If you work hard day-by-day the outcome will take care of it self.
Kelvin Lee is the co-founder and CEO of Fundnel Limited, Singapore-based collaborative private investment platform for accredited investors.
FTA: Hi Kelvin, can you share with us about your background prior to Fundnel?
Before Fundnel, I was with the Capital Markets (IPOs, equity placements) team at J.P. Morgan covering clients in North and Southeast Asia and raising over US$20bn+ for clients to date.
I left J.P. Morgan together with two of my co-founders in October 2014 and we started Fundnel in May 2015. Following our official launch in January 2016, our small team has grown to a 20 strong crew (including our interns and tech developers).
FTA: Why did you decide on building a private investing platform, and why Fundnel?
During my time at JP Morgan, I spearheaded a number of IPOs. One of the more memorable IPOs that I did was for a standout Hong Kong-based technology company based out of China that was on the road with us for an NYSE IPO. I remember it was a Sunday afternoon and I was helping out the management teams with roadshow rehearsals.
I could vividly recall the frustrations the CEO had whilst I was helping him brush up on his responses to investors and the press. In a candid moment later in the day, he told me that the way investment banks like ours were going about raising funds for companies was outdated and we would eventually be replaced by technology-powered funding platforms such as Indiegogo and Kickstarter. I agreed.
That fateful Sunday afternoon planted a seed of an idea in my head and would prove to be the catalyst that pushed me to find out more about how alternative platforms such as OurCrowd, CircleUp and local platform Moolahsense are transforming the face of the finance industry.
In his article, Cohan suggests that the process of IPOs in the recent years have been increasingly skewed to better benefit Wall Street underwriters and their favoured clients – venture capital and buyout firms, as well as the big institutional buyers of IPOs. Institutions have been doing this at the expense of individual and retail investors, who have been convinced by the media into thinking that they are getting their hands on the stocks of the “Next Big Thing” at IPO.
The once clear and transparent processes and mechanisms of capital raising and subsequent “price discovery” on the stock markets, is now a tool heavily controlled by investment banks and early-stage investors trying to achieve a dream valuation and stock price on their investments.
In fact, a report shared by VC firm Andreessen Horowitz in June 2015 reveals that a recent majority of tech-IPOs have yet to yield any returns for investors.
On the other end of the spectrum, I’ve also begun to notice a trend amongst peers who graduated during the global financial crisis in 2008: a growing cohort who are less invested (and interested) in the stock markets than one would typically expect of business and finance graduates.
My suspicions were confirmed when I read a research report by Goldman Sachs in March 2015 that identified a shift in the psychographics of global consumer behaviour amongst millennials who are increasingly un-interested in making investments in traditional stocks and shares while proportionately becoming more interested in the viability of alternative funding and investment platforms.
The correlation of the above pieces of data with my personal experiences with companies and investors navigating the IPO process made me realise there was a significant opportunity to use technology to simplify the process of fundraising for everyone.
FTA: Can you share with us more about the model of Fundnel and how did you set it up to be different from other platforms?
In investment banking, we often theorised about how to make the process of capital raising and investing more efficient with analysis, interaction and effective deal syndication. With Fundnel, we finally have the ability using data, technology and design to simplify the way we invest.
Bringing together a diverse team of individuals with backgrounds in private equity, marketing, entrepreneurship and design, we have branched out into five key markets with offices in Singapore, Malaysia, Indonesia, Hong Kong and a partner office in India.
FTA: Why we are different from other platforms?
We are creating a new online finance eco-system with the aim of modernising the fundraising/investment process for the new open access economy we live in today.
Access to Quality Investors + Tools and Analytics = Fundraising results
Since our inception, Fundnel has helped investors to source and invest in 10 deals worth over US$8mm.
To complete those 10 deals though, we had to not only rely on human analysis from our investments team but also, harness technology to screen over 400 deal opportunities and to help leverage on our network of over 2,000 individual investors that we could effectively target using our data analytics software. It is a long process but we are confident that this will improve as we continue to learn.
FTA: How has the response been so far for Fundnel, or investment fundraising in Asia in general? Do you see an upwards trend and greater adoption going forward?
Israeli crowdfunding platform OurCrowd is one of the earlier fundraising platforms that we looked at when we started. A year ago, we wouldn’t have thought that UOB would be interested in coming into our space, but a considerable investment by the bank into OurCrowd a few weeks ago proved us wrong.
In February 2016, Australian specialist bank Investec invested into Equitise (a crowdfunding platform based in New Zealand) to fund their expansion into Singapore.
Although there is a growing trend of alternative platforms offering investments in private equity-type deals, we need to see a lot more government support, at least in Singapore, in addition to clarity with regards to regulations in order to become more mainstream.
So while we’re eventually aiming to introduce private equity investments as a new asset class for the broader public, right now we are restricted by regulations whereby we can offer it to just accredited and professional investors as the government intends to protect the broader public from the higher uncertainty risks that exist in private equity-type investments.
FTA: We understand that there are still rules and regulations surrounding this space, especially in Asia, how is Fundnel coping with these obstacles so far?
We are always testing the market to gauge investor receptivity. We made a conscious decision to set up physical offices and build teams in five countries (Singapore, Malaysia, Indonesia, Hong Kong and India) because a regional presence enables us to better source for deals as well as having an ear to the ground to better understand investor behaviour and preferences. Even though limitations persist in Singapore and Malaysia, they are already slightly ahead in terms of liberalising the private investment market.
In Singapore, we are currently in the process of running a deal for a local company named hawker.today that aims to deliver local hawker fare to your doorstep. The deal’s unique feature is a revenue-sharing structure that is accessible from a $250 ticket size. This deal was structured with a retail investor interests in mind instead of accredited investors. Deals like this give us the opportunity to better understand public sentiment revolving around such investment opportunities and gauge their receptiveness of investing online.
This deal structure was conceptualised and deployed over a year ago in Hong Kong with an F&B project as a testbed that eventually went on to raise US$1m through 23 individual investors. The underlying basis of the revenue-share deal structure was to facilitate win-win collaboration opportunities between a company and prospective investors. Through this model, investors understand that the more they contribute to help in the development of a business, the more they will receive in returns – this is the very essence of a revenue-share arrangement.
Education is another big item on our agenda. The business of crowd-based investing is still very much at a nascent stage even in markets as developed as Singapore and Malaysia. To overcome this hurdle, we recently launched an initiative to help the wider market learn more about the concept of crowdfunding and its application for both investors and business owners in modern-day fundraising. The campaign was a resounding success, with a large portion of new user sign-ups attributed to the initiative. What has been rather encouraging is the fact that many of our new users have also subscribed to our editorial content to learn more about the industry and what it holds for everyone. Fundnel is fully committed to fulfilling our mission to elevate and educate the market in the near term.
FTA: What are your upcoming plans for Fundnel this year and the next 3 years?
In the shorter term, we will continue to learn from ongoing market feedback and tweak our platform to continue to offer curated deals to our network of accredited investors.
In the longer term, we feel that there is going to be a real opportunity to open up private investments to the broader market, depending on progress of local regulations to:
Offer curated co-investment opportunities (e.g. Invest with Tencent) with private equity and financial institutions to the general public as a new accessible asset class,
Provide a private secondary trading platform where investors can trade shares in private (pre-IPO) companies like Spotify, Uber, Airbnb etc.
For now, our focus remains on building up our technology, growing our deal offerings for our stable of investors and providing these investors with tools to assist them in their due-diligence and investment activities.
FTA: What is your proudest achievement through Fundnel so far?
What continues to drive me in the morning and late at night is essentially the fact that we have been able to recruit one of the best teams for this company. I am amazed by the sheer quality of talent we have to drive us forward; our guys gave up jobs in places like venture firms, investment banks and consultancy firms to join us on our journey. The thing is, no one has prior experience working on a platform like Fundnel before and, as a result, we venture into murky waters every day. Despite this, they gave up those stable careers to side with us and this says plenty about their commitment and belief.
No one knows if we will succeed or how long the market will take to realise the potential of this form of investing, but I am always very happy that these guys chose to be on our side. So whenever someone asks me about what I am personally most proud of, I will always say that I am most proud of my team.
A close second to that would be the advisors that have stepped up to lend us their expertise and experience. One of our advisors is Jason Best, co-author of the CrowdFund Investment Framework which was deployed by outgoing US President Obama in the Jobs Act to make crowd-based investing legal in the US. We are humbled to have him on board as our exclusive advisor in Asia. As he travels around the world looking at different platforms, he is able to help us and give us insights and advice.
FTA: Finally, do you have any tips to get our Fintech Asia readers started on a platform like yours?
It is not hard to be a part of Fundnel. We are giving out free magazines to help educate the public: fundnel.com/education-fta
We are trying to distribute this out to people to educate and entice them to learn more about financing and what we do.
Our end goal is to help crowdfunding gain traction among the general population. As more companies get funded, they have the ability to hire and generate more jobs for people. This acts like a multiplier effect and, in some sense, we believe that we are trying to progressively build nations through our platform.