tracxn fintech sea startup landscape, july 2016

FinTech – Southeast Asia, July 2016

TRACXN REPORT

SOUTHEAST ASIA

FINTECH -

MAY 2016

In collaboration with-

East Ventures & Lenddo

JUNE 2016


TracxnWorld’s Largest Startup Research Platform


Contents

Topic Page

Sectors We Track 04

Overview 05

Experts Speak 07

Tracxn BlueBox 53

Company List 77

Q&A with Industry Experts 189

Team 190

About Tracxn 198


Illustrative Sectors We Track In SEA

CONSUMER DIGITAL

HEALTH TECH

ONLINE RETAIL

TRANSPORT

REAL ESTATE

TRAVEL

LOGISTICS

FOOD

GROCERY

LOCAL SERVICES

HEALTHCARE DISCOVERY

HEALTHCARE DELIVERY

FINTECH

EDTECH

BITCOIN

LENDING

CROWDFUNDING

PAYMENT

INVESTMENT TECH

BANKING TECH

PERSONAL FINANCE

INSURANCE TECH

TUTORING

ONLINE COURSES

TECHNOLOGY

INTERNET OF THINGS

3D PRINTING

WEARABLES

DRONES

SMART BUILDINGS

BLOCKCHAIN APPLICATIONS

ENERGY

ROBOTICS

ENTERPRISE TECH

ADTECH

ENTERPRISE COLLABORATION

MARKETING TECH

HUMAN RESOURCES

ECOMMERCE ENABLERS

LEGAL TECH

SALES FORCE AUTOMATION

SMB SAAS

ONLINE VIDEO

AD NETWORK

AD EXCHANGE


Sector Overview

Scope of report

This report covers companies that provide financial services with the help of technology in Southeast Asia (SEA) region. Thecountries included for this report are Singapore, Indonesia, Malaysia, Thailand, Philippines, and Vietnam. The report takes intoaccount the disclosed funding amount and rounds only. Over $300M has been invested since 2007 with ~ $150M invested in2015 alone. Around 80 rounds of funding happened in the year 2014 & 2015.

Payments and Investment Tech are the top two funded sectors

• Payments - 106 companies - 32 investments worth ~ $80M

• Investment Tech - 63 companies - 20 investments worth ~ $120M


Notable Investments

Notable investments in FinTech – SEA during last few months

• M-DAQ (Investment Tech) - $82M from EDB Investments – Nov’2015.

• Momo (Mobile Wallet) - $28M from Standard Chartered and Goldman Sachs – Mar’2016.

• Ayannah (Remittance) - $3M from 500 Startups, Wavemaker, Golden Gate Ventures, IMJ Investment Partners, Beenos,GREE Ventures – Dec’2015.

• Xfers (Payment Gateway) - $2.5M from Golden Gate Ventures, 500 Startups, GMO Venture Partners, Partech Ventures,BWB Ventures, Convergence Ventures – Jan’2016.

• Claim Di (Insurance Tech) - $2M from CyberAgent Ventures, Golden Gate Ventures, 500 Startups, dtac Accelerate –Nov’2015.

• AlgoMerchant (Investment Tech) - $910K from East Ventures – Jan’2016.

• Lenddo (Lending – Credit Scoring) – Undisclosed amount from Golden Gate Ventures, Omidyar, Life.Sreda etc –Oct’2015.

• Seedly (Personal Finance Management) - Undisclosed amount from East Ventures – Mar’2016.


Experts Speak

Willson CuacaFounding & ManagingPartner,East Ventures

Altona WidjajaVice President,OCBC Bank

“Southeast Asia is definitely an interesting market for Fintech. InSoutheast Asia, many countries like the Philippines and Indonesiahave a large unbanked population. An interesting context is highmobile phone penetration rate and social media adoption. Fintechservices that focus on mobile payments aren't just offering adifferent service, they are solving a societal problem and levellingthe previously unbanked up directly to banking 2.0.”

“It’s time for the banks to co-create with the external eco-systempartner like the Fintech startups. In Singapore, there’s a concertedeffort by the government bodies and eco-system partners to createan environment for innovation to thrive. The market infrastructureand regulatory support would vary with each country in SEA, butthere’s a high chance of replicating the initiatives in other SEAcountries especially in Malaysia and Indonesia.”


Experts Speak

Richard Ian EldridgeCo-founder & CEO, Lenddo

Jeff StewartFounder & CEO, Lenddo

“Central banks are being proactive in allowing new techniques fordriving financial inclusion as long as it is done in a plannedapproach and ensures the stability of the financial systems. Therecent evolution observed in emerging markets show that they areembracing more and more modernisation as a compulsory step toquickly support and help financial institutions.”


FinTech SEA – Active Investors

Neuroware, 2014 PawnHero,2016

iMoney,2013

Omise, 2015

Lenddo,2015

ayannah,2015

Omise,2015

MoneySmart,2015

Jojonomic, 2015

Omise,2015

StockRaders, 2015

Cermati, 2015

MoolahSense, 2015

CodaPay,2013

500 Startups

Claim Di,2015

CoinPip, 2014

Claim Di,2015

Call Levels, 2015

Seedly, 2016

AlgoMerchant, 2016

Jurnal, 2016

Moka, 2015

Xfers,2016

Xfers,2016

ayannah,2015

Xendit,2015

* year reflects the latest round

participated by the investor


Over 520 companies were founded in last 10 years with ~2/3rd companies founded in last 3 years


2015 saw the highest number of new companies and funding by value

• FinTech industry in SoutheastAsia has witnessed anexponential increase in fundingin last 3 years.

• Total funding in 2013 and 2015were ~$64M and ~155Mrespectively, with a decline in2014 in between.

• Number of funding rounds haveincreased consistently YoY,touching ~60 in 2015.

• Investment Tech, Payment,Mobile Payment and Lendingsegments witnessed significantinvestment activity.$7M

$13M

$64M

$20M

$155M

58

25

31

59

0

35

70

0

35

70

105

140

175

2011 2012 2013 2014 2015

No

. of R

ou

nd

s

Fun

din

g A

mo

un

t (i

n M

illio

ns)

Total funding and number of funding rounds between 2011 – 2015

Total Funding No. of Rounds


Number of deals has increased significantly in last three years


FinTech SEA – 2015-16 (YTD)


FinTech SEA – Funded Universe


SingaporeP

enet

rati

on

Source1, Source2

http://www.slideshare.net/wearesocialsg/digital-social-mobile-in-2015

http://www.worldbank.org/


Singapore FinTech – Breakdown


Singapore FinTech – Funding Trend


Singapore FinTech – Payment & Cashless Economy


Singapore FinTech – Investment Tech


Singapore – A Leading Wealth Management Center


Singapore – Banks and FinTech


Singapore – Banks and FinTech Cont’d…


Singapore FinTech – Regulation


Singapore FinTech – Regulation Cont’d…


Singapore FinTech – Recent Updates


FinTech – Indonesia


IndonesiaP

enet

rati

on

Source1, Source2




Indonesia FinTech – Breakdown


Indonesia FinTech – Funding Trend


Indonesia FinTech – Regulation


Indonesia FinTech – Regulation Cont’d…


FinTech – Philippines


Philippines

Pen

etra

tio

n

Source1, Source2




Philippines FinTech – Breakdown


Philippines FinTech – Funding Trend


Philippines FinTech – Regulation


FinTech – Thailand


ThailandP

enet

rati

on

Source1, Source2




Thailand FinTech – Breakdown


Thailand FinTech – Funding Trend


Thailand FinTech – Regulation


FinTech – Malaysia


MalaysiaP

enet

rati

on

Source1, Source2




Malaysia FinTech – Breakdown


Malaysia FinTech – Funding Trend


Malaysia FinTech – Regulation


FinTech – Vietnam


VietnamP

enet

rati

on

Source1, Source2




Vietnam FinTech – Breakdown


Vietnam FinTech – Funding Trend


Vietnam FinTech – Regulation & Govt. Support


June 2016Tracxn BlueBox : FinTech - SEA500+ companies in the sector, 92 funded in last 5 years, ~$153M invested in 2015

53


FinTech SEA – Landscape

Payments Mobile Payments

Personal Finance

Investment Tech Lending

Enterprise Finance

Insurance Tech

Banking Tech

BitcoinCrowdfunding


Most Active Investors – Segment Wise


Payments – BM Description


SEA FinTech – Payments


Mobile Payments – BM Description


SEA FinTech – Mobile Payments


Investment Tech – BM Description


SEA FinTech – Investment Tech


Lending – BM description


SEA FinTech – Lending


Personal Finance – BM Description


SEA FinTech – Personal Finance


Bitcoin – BM Description


Insurance Tech – BM Description


Banking Tech – BM Description


Crowdfunding – BM Description


Enterprise Finance – BM Description


Emerging Trends in Global FinTech


P2P Money Transfer – Messaging Apps

• Peer to Peer money transfer service is one of the most common features offered by mobile wallets along with merchantpayments, with companies like Venmo have made a huge Impact in this area, the messaging giants are not far behind to takeadvantage and offer P2P money transfer service via their messaging app. Below is a list of few major messaging app offeringmoney transfer.

Facebook Messenger

The service allows to transfer money bylinking Visa and MasterCard and transfermoney to the beneficiary’s account. Theservice uses Fingerprint authentication.

Line Pay

It is a messaging app in Japan, which allows topay with MasterCard, Visa, Amex, Discover inLine stores. Planned to expand the service toP2P and merchant payments, with a present181 million active users.

WeChat

The messaging service offered by Tencent,allows to pay by loading money to the MyWallet feature. The advancement plans are formerchant payments and to hail and pay for taxiservices.

Snapcash

Snapchat messaging service offered“Snapcash” to transfer money via privatemessage. Square is the payment processingresponsible for transactions.

Dasher

It is a popular messenger service, hasintegrated its service with Venmo to enablepeer-to-peer money transfer through the chatservice. To make payments, users can click the“Pay” button, enter the amount and send themoney.

BBM Money

BlackBerry has launched its own peer to peermoney transfer service named BBM Money. Thetechnology is developed by Monitise and issuedand managed by Permata Bank. BlackBerry ispartnering with Barclays Bank to enable P2Pmoney transfer service.


Biometric Payments


Tokenization


Ripple – Emerging technology in money transfer


Alternative Credit Scoring


FinTech SEA – Company List

Details of 550 companies (113 Funded & 337 Unfunded companies)

COVERS THE FOLLOWING SECTORS

77

Payments Mobile

PaymentsInvestment

TechConsumer

FinanceBFSI Tech Lending Bitcoin Crowdfunding

Enterprise Finance

Forex


78

Payments (1/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

Forex

Company Details Funding Investors

Gateway

Paysia [Bangkok, 2015]: Paysia is a Thailand based payments company which gives businesses the service ofintegrating online payments onto their websites and portals. It gives tools such as E-commerce, recurringpayments etc in its package. The company charges flat rates to its clients irrespective of the volume andtransaction amount.

Gateway

FirstPay [Jakarta, 2014]: FirstPay is a payment gateway service provider for online businesses in Indonesia.The company takes the payments for its clients through a credit card, virtual account ATM Bersama, and E-money.

Gateway

Upoint [Jakarta, 2014]: Upoint allows its users to purchase items, credit games and other digital content viaonline media or from Telkomsel mobile number. The company has its products namely speedy billing and spincard.

Gateway

JSC Vietnam Payment Solution [Hanoi, 2007]: JSC Vietnam Payment Solution (VNPAY) is an electronicpayment service provider. The company provides services like mobile banking, phone recharges, bill payments,wallets and payment gateways.

Gateway

Mimopay [Jakarta, 2012]: Mimopay provides payment solution for game publishers and applicationdevelopers to accept various payment methods in SEA region. The company works with telecom operators,banks and convenience stores. It also enables user to make online purchases via Mimo wallet & Mandirie-cash.

78

http://www.paysia.co/

http://www.firstpay.co.id/

http://www.upoint.id/

http://www.vnpay.vn/

http://www.mimopay.com/


79

Payments (2/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

Forex


Gateway

1Pay [Hanoi, 2013]: 1Pay is a mobile payment platform which provides full mobile payment solutions to localand overseas merchants including mobile developers, content providers and game studios. It allows itscustomers to pay by SMS, online and prepaid cards for purchases via mobile.

Gateway

Fasa Centra Solutions [Sleman, 2011]: Fasa Centra Solutions, commonly known as FasaPay, is a non-bankingcompany engaged in the business of electronic money transfer, payment gateway and management. Companyprovides payment gateways for enterprises and, through the platform money can also be transacted betweentwo FasaPay accounts.

Gateway

FasPay [Jakarta, 2003]: Faspay, PT. Media Indonusa is a subsidiary of Astel Group which is mobile e-commerceswitching and acts as payment gateway partners. The company include mobile operators, financial institutionsand merchants as its end users.

Gateway

PesoPay [Makati, 2006]: PesoPay is Philippines online payment gateway allowing merchants to accept onlinepayments via credit cards & debit cards and cash over the counter payments. Also provides other relatedservices like recurring payments, tokenization, customized branded payment page.

Gateway

Inpendium [Singapore, 2012]: Inpendium is a provider of payment connectivity and full cycle paymentmanagement services for e-commerce merchants. It also provides different financial services such as riskmanagement & fraud screening, real time reporting and reconciliation of the failed payments. Claims toconnect multiple card acquirers and alternative payment options in 172 currencies across Europe, Middle Eastand Africa, North America, Latin America and Asia Pacific regions.

79

http://www.1pay.vn/

http://www.fasapay.com/

http://www.faspay.co.id/

http://www.pesopay.com/

http://www.inpendium.com/


80

Payments (3/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

Forex


Gateway

Square Gate One [Jakarta, 2006]: Square Gate One provides solution in payment and banking channel. Thecompany works on three sectors namely electronic banking, payment systems and business switching.

Gateway

YuuPay Secure [Singapore, 2006]: Yuupay, a subsidiary of Yuuzoo Corp, provides payment service for e-merchants. It started in 2006 as a payment option to the yuuzoo website which is a social commerce platform.The products Foxycart and Magento by yuupay helps to integrate it with the merchant websites. The companyclaims that it processes transactions to over 200 banks all over the world.

Gateway

Siam pay [Bangkok, 2006]: Siam pay is a part of Asia pay operating in Thailand. SiamPay offer business-to-consumer (B2C) services, such as ‘SiamPay eCommerce” to corporations and institutions to facilitate onlinecredit card payments. Siam pay also provide multiple services such as mobile payment, risk managementsoftware and aggregation of the merchants. Its parent company Asia pay was founded in 2000 and claims tocover 12 countries in Asia

Gateway

Doku [Jakarta, 2007]: Doku is one of the first locally built payment gateways in Indonesia providing onlineinternet payment solution to e-commerce, b2c, retailing and b2b business concepts. They also providesolutions like Doku wallet, token payments, subscription payments. Last year, the company processed anestimated $1.5Bn worth of transactions with over 13,000 merchants in its portfolio across various industriessince its launch.

Gateway

helloPay [Singapore, 2014]: helloPay is a payments solution, which allows payments and money transfers,both online and offline. It provides a secure payment platform to send and receive money, both for personaland commercial use. A user can use mobile number and email address to get started and then safely makeonline purchases without revealing payment details. Headquartered in Singapore, the company also hasoperations in Vietnam, Indonesia, Phillipines and plans to expand across Southeast Asia and Africa. helloPayhas investments from J.P. Morgan, Tesco, Rocket Internet, Temasek, Verlinvest and Investment AB Kinnevik.

80

http://www.sgo.co.id/

http://www.yuupay.com/

http://www.siampay.com/

http://www.doku.com/

http://www.hellopay.com.sg/


81

Payments (4/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

Forex

81


82

Payments (5/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

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82


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Payments (6/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

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84

Payments (7/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

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85

Payments (8/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

Forex

85


86

Payments (9/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

Forex

86


87

Payments (10/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

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87


88

Payments (11/22)

Payments Mobile

PaymentsInvestment

TechLending

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Insurance Tech

BitcoinBanking

TechCrowdfunding

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88


89

Payments (12/22)

Payments Mobile

PaymentsInvestment

TechLending

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Insurance Tech

BitcoinBanking

TechCrowdfunding

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89


90

Payments (13/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

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90


91

Payments (14/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

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92

Payments (15/22)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

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92


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Payments (16/22)

Payments Mobile

PaymentsInvestment

TechLending

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Insurance Tech

BitcoinBanking

TechCrowdfunding

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Payments (17/22)

Payments Mobile

PaymentsInvestment

TechLending

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Insurance Tech

BitcoinBanking

TechCrowdfunding

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Payments (18/22)

Payments Mobile

PaymentsInvestment

TechLending

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Insurance Tech

BitcoinBanking

TechCrowdfunding

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Payments Mobile

PaymentsInvestment

TechLending

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Insurance Tech

BitcoinBanking

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Payments Mobile

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Payments (21/22)

Payments Mobile

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Payments (22/22)

Payments Mobile

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Payments Mobile

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Payments Mobile

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BitcoinBanking

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Investment Tech (1/13)

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Payments Mobile

PaymentsInvestment

TechLending

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Insurance Tech

BitcoinBanking

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Payments Mobile

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Lending (3/10)

Payments Mobile

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Lending (4/10)

Payments Mobile

PaymentsInvestment

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Insurance Tech

BitcoinBanking

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Enterprise Finance

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127


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Lending (5/10)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

Forex

128


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Lending (6/10)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

Enterprise Finance

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129


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Lending (7/10)

Payments Mobile

PaymentsInvestment

TechLending

Personal Finance

Insurance Tech

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Lending (8/10)

Payments Mobile

PaymentsInvestment

TechLending

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Insurance Tech

BitcoinBanking

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131


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Lending (9/10)

Payments Mobile

PaymentsInvestment

TechLending

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Insurance Tech

BitcoinBanking

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Enterprise Finance

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Lending (10/10)

Payments Mobile

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TechLending

Personal Finance

Insurance Tech

BitcoinBanking

TechCrowdfunding

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Personal Finance (1/15)

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159

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160

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172


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188


VIEWS FROM INDUSTRY EXPERTS


Tracxn presents an exhaustive Q&A on Southeast Asia FinTech space

In collaboration with

190

Willson CuacaFounding & ManagingPartner,East Ventures

Altona WidjajaVice President,OCBC Bank

Richard Ian EldridgeCo-founder & CEO, Lenddo

Jeff StewartFounder & CEO, Lenddo


Q+A: East Ventures

Willson Cuaca is founding and managing partner of East Ventures, an early stageinvestment fund focus on consumer Internet, mobile and SaaS. With a total of 5offices in Jakarta, Tokyo, and San Francisco, East Ventures has invested in over150 companies across Asia and the US. For Southeast Asia focus, East Ventureshas invested in more than 80 companies in the region. Most of the companiesmanage to get subsequent funding round and ride on top of Indonesia middleclass consumer growth. East Ventures also made exits from its investmentthrough M&A to local and international companies.

Willson sits on advisory board of Code4Nation.id, a pro-bono movement to helpIndonesia government solve problem through software. He brings his expertisein ecosystem building and product/market-fit to accelerate product delivery andvalue proposition.

If we compare with other Asian counterparts like China and India, how do you rate Southeast Asia (SEA) as an investment destination for tech start ups?

#1

SEA is definitely an interesting market for fintech. It is made up of differentcountries, at a different stages of development, each having different cultureand language. Probably one of the most fragmented region yet calledthemselves as one community. For some verticals, like non-collateral loanand payment, for example, government regulation does play a big part forone company to be succeed. In the other hand, we can see couple ofdeveloping countries in the region, like Indonesia, still have a great rate ofunbanked population. As much as it might disrupt the conventional banking,it is also giving a big opportunity for financial inclusion, for a low incomemember of society.

Another interesting context is high mobile phone penetration rate and socialmedia adoption. We see them as distribution platforms and helps toaccelerate fintech adoption. Some people may not have access to financialproduct but they have at least one phone and could start doing transactionvia the phone.


Q+A: East VenturesWhat are the recent trends that you are observing in Fintech in SEA -like online lending, mobile payment etc.?#3

We already see how’s the industry focus for each pain point in each country.But its also interesting to see companies like Jojonomic, expensemanagement platform, can address opportunity that somehow identical inthe region.

MoolahSense, a P2P lending platform in Singapore, is able to disburse millionof crowdsource capital within hours while still maintaining the quality ofborrower.

Singapore's bank has been in the forefront for innovation and receptive tochange with various incubations and accelerators. Indonesia's bank put theirbet by setting up VC arm.

There are also startups like AlgoMerchant that focuses on improving thecapital markets with tech, helping to scale retail investors trading operationsthat might traditionally not get as much priority as other higher marginbanking ops. They are also using tech to develop their own algorithms tobetter serve the needs of those residing in a financial hub like Singapore.

What factors in your opinion will influence the growth of Fintech scenario in SEA, like increasing digital footprint of SEA, low banking penetration etc.?

#2In Southeast Asia, many countries like the Philippines and Indonesia have alarge unbanked population. Fintech services that focus on mobile paymentsaren't just offering a different service, they are solving a societal problem andlevelling the previously unbanked up directly to banking 2.0.

From what we see, these are some important factors for Fintech success: 1)population size 2) smartphone penetration 3) low banking penetration 4)government policy support - most emerging markets in Southeast Asia have 1 +2. As long as governments don't actively block nascent Fintech ideas or saddlecompanies with excessive regulatory approvals, startups could have thepotential to grow very quickly.

The unique demands of the millennials will also help to drive certain Fintechinnovation. The millennial generation is the largest generation worldwide and asignificant portion of them reside in SEA. They are digital natives - smartphonesand mobile internet are their essentials. In this area we see local startup likeXendit serving their needs with P2P transfers.

Then there is also Seedly, which provides an expenses infographic servicecatering especially to millennials who want to better manage their expenses butdo not have the time to do so.


Q+A: East VenturesThere is a wide notion that most of the funded companies in SEA are clone of already validated business models from west. Do you think there are Fintech startups coming up which are solving SEA specific problems?

#5While it might have been possible to clone business models for areas such as e-commerce, Fintech is entirely different for most SEA countries. When a significantproportion of the population don't even have a bank account to begin with, thesame model that allowed a company to scale in the West could fail spectacularly ifit is simply copy and pasted in SEA countries. For instance, services like Venmo inthe US might be focusing on greater convenience, similar services like MoMo couldbe solving real problems - in countries where efficient interbank transfers aren't thenorm, or where the need for remittance services is higher than Western countries.Focus on Fintech in the West could be convenience and new innovation, but in SEAit could be more geared towards financial inclusion as well as services to capitaliseon that inclusion.

In this regard, we see startups like Moka and bindo that digitise the retail frontpayment, and are ready to help SMEs start accepting cards as financial inclusiontakes place and more people start going cashless.

Startups like Cermati help to accelerate the inclusion process by providingrecommendations, guides and comparison on the various financial products likecredit cards, loans and insurance. Providing such information in a localised mannerwill help to bridge the gap between complex financial services and people whohave never used them before. We also noted the rise of assisted payment inecommerce platform for unbanked population such as Kudo. the platform isgrowing exponentially in the rural area. none of this solution exist in the west.

How do you think the established financial institutions like banks would react to the Fintech advancement in SEA going forward?#4

Banks are definitely not blind-sided by the development - Citi is developing their ownCiticoin, DBS using IBM Watson, OCBC opening up the Open Vault - and they have thekind of resources that a Fintech startup would probably not have. However, amountbanks spent on IT was still 12x more than Fintech investments in 2014.

In the broader point of view, finance industry is wide and diverse, the pie is big andit's hard any one company to cover all the areas from the beginning. Therefore thereis definitely space for different Fintech ideas serving different niches of the financeindustry. Consumer and SME client segments involving payments and lending are theareas that banks face the most heat from Fintech startups, but banks could also havean edge when developing their own Fintech tools for corporate banking or their ownrobo-advisory arm. Such niches require more than just money, they require security,trust, customisations for each customer and capital intensive investments thatstartups might not be able to afford.

Unlike in the West where Fintech startups can take advantage of consumers' decliningtrust in their banks, Southeast Asian banks have one of the highest consumerconfidence ratings. Trust issues have been a problem, for example, for mPOS startupstrying to onboard traditional merchants in a cash culture - where merchants felt morecomfortable if there were at least partial association with a bank.


Q+A: Lenddo

194

Richard Eldridge, Co-founder and CEO of Lenddo

What have you been seeing in SEA Fintech startup scenario as oflate? How do you perceive the overall investment climate forFintech in SEA?

• Exciting times,

• Singapore becoming the hub for FinTech activities in SEA,

• Majority of activities are happening in payments space.

#1

As Lenddo has been operating in Philippines for quite long, howdo you see the market being different from other SEA countriesas far as online lending is concerned?

We divested ourselves from the Lending business in 2014 and now we serveboth online incumbent banks and alternative online lenders. There are 2 typesor market - Developed economies such as Singapore and developingeconomies such as Indonesia, Vietnam and Philippines. In developing marketseach market is similar. With similar profiles viz a viz:

- Highly digitally connected- Smartphone penetration very high- Low credit bureau penetration- Low % of population with access to formal credit. - Manual process for verification results

#2Lenddo is a provider of social network based credit scoring that empowersthe emerging class to use their online social connections to build theircreditworthiness and access local financial services. Users link their socialnetworking accounts to their Lenndo account and complete their profiles togenerate the LenddoScore. Lenddo enables businesses to simply andsecurely evaluate both the character and identity of customers usingalternative data in order to extend credit and deliver life-improving services.

Jeff Stewart, Founder and Chairman of Lenddo


Q+A: Lenddo

195

How difficult it has been for you to expand beyond SEA? Do youthink SEA is more challenging in comparison to other developingcountries like India?

We have put in a comprehensive plan for our expansion into South Americaand India which is going as per plan. As a SAAS provider, we have also beenable to deploy our solutions quickly and easily in the countries includingAfrica.

#4

How do you think governments or central banks can encourage thealternative way of evaluating the credit score from non-traditionaldata points given the increasing digital footprint of SEA?

From our experience, central banks are being proactive in allowing newtechniques for driving financial inclusion as long as it is done in a plannedapproach and ensures the stability of the financial systems. Certainly nothinghappens overnight, but the recent evolution observed in emerging marketsshow that they are embracing more and more modernisation as a compulsorystep to quickly support and help financial institutions, and especially newplayers such as P2P lenders to scale and become more competitive, moreregulated for the greatest benefit of the consumers.

#6

How has the experience been in expanding to other SEA countries (likeSingapore, Indonesia) from Philippines? Do they pose similarchallenges?

We only operate in Indonesia and Philippines in SE Asia today. These 2markets are very similar with similar challenges facing financial institutions inboth.

#3

How do you see the acceptance for alternative credit scoring model inSEA vis-a-vis the traditional credit scoring models from bank?

The feedback from the market has changed over the last few years. As more andmore success stories from around the world have been shared, Credit RiskOfficers are more open to using new types of data in building models and alsocomfortable using more advanced modelling techniques to build scorecards.These exciting developments must still be validated and managed using internalcredit management policies and frameworks.

#5


Similar to the development in UK and US, the advancement of technology hasenabled nimble players to provide better customer experience and gaintraction. This has prompted many banks to look at how they are able totransform and innovate their business to stay relevant for their customer. InSingapore there’s a concerted effort by the government bodies and eco-system partners to create an environment for innovation to thrive. This is butthe start of the journey and we will expect to see real innovative ideas arebeing implemented in this digital and shared economy.

Q+A: Altona Widjaja, VP OCBC Bank

196

Altona Widjaja works as Vice President withOCBC Bank, Singapore. He has beenassociated with OCBC Bank for more than 9years and presently runs all aspect ofoperations at The Open Vault at OCBC fromfixing coffee machines to curating Fintechstrategy for the bank.

What are the recent trends that you are observing inFintech in SEA - like online lending, mobile payment etc?

What is so unique about Singapore that is prompting manyestablished financial institutions to experiment new concept here -like Finlab from UOB, The Open Vault from OCBC etc.?

#1

According to you, how challenging would it be to replicate theseinitiatives from OCBC to other SEA countries like Indonesia,Malaysia?

Build and transfer has always been OCBC’s regional strategy, the approach inthese initiative would be similar. The market infrastructure and regulatorysupport would vary with each one but we believe there will be a convergencein approach and there’s a high chance of replicating the initiatives in other SEAcountries especially in Malaysia and Indonesia. However, there would stillneed to have local adjustment like any regional initiative.

#2

What do you think the future trend would likely to be - banksdeveloping their own tech-enabled solution or banks acquiring few ofthe startups out there?

I believe that it’s time for the banks to co-create with the external eco-systempartner like the Fintech startups. I think that the bank should be enabler ofsuch players. In this shared and open economy each entity should focus onwhat they do best and leverage on one another. I do not think there will be aone size fit all approach, be it own development or acquisition, differentorganisation have different culture and approach. But what is clear is thateveryone have to be a digital/technology company to stay relevant to theircustomers.

#3


Anjan Ash

Lead Analyst, Southeast Asia,Tracxn

Anand Kumar

Analyst, Southeast Asia,Tracxn

Team

197

Palash Agrawal


B Karthik


https://in.linkedin.com/in/anjanash

https://twitter.com/anjankash

https://in.linkedin.com/in/anand-baranwal-6b058347

https://twitter.com/anandkishu

https://in.linkedin.com/in/palash-agrawal-88803a88

https://twitter.com/agrawalpalas

https://www.linkedin.com/in/b-karthik-chandra-prakash-53872734

https://twitter.com/karthikbethi

tracxn fintech sea startup landscape, july 2016

Data & Analytics