Southeast Asia

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Aspire Capital offers fast finance for SMEs in Southeast Asia

Southeast Asia’s digital economy is tipped to grow more than six-fold to reach more than $200 billion per year, according to a report co-authored by Google, with e-commerce accounting for the dominant share. The emergence of e-commerce platforms like Alibaba’s Lazada and U.S.-listed Shopee have enabled online entrepreneurship across the region, but still financial support for online sellers, who are basically SMEs, is lagging.

That’s where Singapore-based Aspire Capital, a six-month-old organization focused on speedy SME lending, is hoping to make a difference.

The company certainly has opportunity. With a cumulative population of over 600 million consumers and a rising middle class, Southeast Asia is increasingly an attractive market for businesses of all kind, and online companies in particular. Chinese giants Alibaba and Tencent have long devoted significant resources to the region where, like India, they see significant growth potential. E-commerce is the clear winner, in terms of size, with the e-Conomy SEA report — a joint research project between Google and Singapore sovereign fund Temasek — forecasting e-commerce revenue will hit $88 billion by 2025 from $10.9 billion in 2017.

Data from the e-Conomy SEA report

The crux of its problem is that online sellers who use Lazada, Shopee or other platforms that are forgoing profit in order to grow, are ironically less able to scale their business since there are few ‘e-commerce friendly’ financing options.

That problem became apparent to Aspire founder and CEO Andrea Baronchelli during a four-year stint with Lazada Singapore where, as CMO, he identified a financing disconnect for Lazada merchants.

“I saw the problem while trying to rally small businesses trying to grow in the digital economy,” Baronchelli told TechCrunch in an interview.

“The problem is really about providing working capital to small business owners. We started with online sellers, but we have expanded a bit as we see demand. There are 65 million small businesses in Southeast Asia, that’s ten times more than the U.S. so we see so much potential,” he added.

Aspire founder and CEO Andrea Baronchelli pictured while at Lazada

Today, Aspire Capital covers Singapore where it has expanded beyond e-commerce merchants to cover other things of SMEs who seek loans, primarily for working capital as Baronchelli explains. So far, he added, it has served loans to over 100 businesses. Typically, its spread goes from as low as SG$5,000 to up to SG$100,000, that’s around $3,600-$73,500 in U.S. terms.

The company was founded in early 2018 and already it has done plenty. It was part of the Y Combinator Winter 2018 cohort and it has closed a $9 million seed round to kick its business off with the working capital that it needs itself.

That round included a range of investors such as Europe-based Hummingbird, New York’s Mark II Capital, ex-Sequoia partner Yinglan Tan’s Insignia Ventures Partners and Y Combinator.

The principle behind the business is to make business financing quick and simple, Baronchelli said.

So rather than stacks of paperwork, SME owners fill out online forms and get a response the same day. Large parts of the application and review process are automated using a proprietary risk assessment engine, but Baronchelli said that ultimately a human makes the final call on whether to accept the application or not.

“We want to really be fast,” Baronchelli explained. “SMEs need quick decisions, they cannot wait three months for a bank. They need super quick, fast and no paperwork.”

The application process for companies seeking loans from Aspire Capital

He paints an example of online merchants who typically buy inventory from China which is sold customers within three to six months. If the business has a track record, it can take a loan to increase its stock and grow its revenues and profit, he explained.

Singapore may be a key market in Southeast Asia, but with a population of just over five million expansion is top of mind for Aspire. Baronchelli said he is doing due diligence on the first market expansion which he expects will happen before the end of this year. He expects that the business will raise further capital, perhaps towards the tail end of this year, which would be used to expand more aggressively across Southeast Asia in 2019.

He is also occupied building out the team. Right now, Aspire has ten people but he is keen to bring in ten to fifteen more staff, particularly on the tech side of the business.

oBike is closing its dock-less bike-sharing service in Singapore

Singapore’s upcoming licensing for dock-less bike-sharing services has claimed its first scalp after oBike — a Singapore-based company run by Chinese founders — announced that it would cease its service in the country ahead of the implementation of regulations.

The Land Transport Authority (LTA) is introducing measures to protect Singapore’s streets from a glut of bicycles left all over the place, as photo essays from China and beyond have cautioned can happen.

oBike launched its service at the beginning of 2017, and it claims over one million registered users but still it will end its service today, June 25. oBike said it will continue to run operations in other markets, although it hasn’t said if/when it will refund Singapore-based users with the deposits that they paid upon registration.

“oBike strongly believes and is committed to provide [sic] dock-less bicycle sharing service that would benefit users’ commuting and Singapore’s transportation system, however it is with regret that the new regulation measures do not favour this belief of ours,” the company said in a statement that posted to Facebook.

This move comes weeks after oBike exited Melbourne in Australia following issues with regulation.

oBike has directed its customers to the newly-launched bike service from ride-hailing giant Grab, which went live in March, although that service has temporarily paused new user sign-ups. Other alternatives in Singapore also include services from Chinese duo Ofo and Mobike.

Grab is actually an investor in oBike, as TechCrunch reported last year, after taking part in its $45 million Series B round that was announced in August 2017.

Shared housing startups are taking off

When young adults leave the parental nest, they often follow a predictable pattern. First, move in with roommates. Then graduate to a single or couple’s pad. After that comes the big purchase of a single-family home. A lawnmower might be next.

Looking at the new home construction industry, one would have good reason to presume those norms were holding steady. About two-thirds of new homes being built in the U.S. this year are single-family dwellings, complete with tidy yards and plentiful parking.

In startup-land, however, the presumptions about where housing demand is going looks a bit different. Home sharing is on the rise, along with more temporary lease options, high-touch service and smaller spaces in sought-after urban locations.

Seeking roommates and venture capital

Crunchbase News analysis of residential-focused real estate startups uncovered a raft of companies with a shared and temporary housing focus that have raised funding in the past year or so.

This isn’t a U.S.-specific phenomenon. Funded shared and short-term housing startups are cropping up across the globe, from China to Europe to Southeast Asia. For this article, however, we’ll focus on U.S. startups. In the chart below, we feature several that have raised recent rounds.

Notice any commonalities? Yes, the startups listed are all based in either New York or the San Francisco Bay Area, two metropolises associated with scarce, pricey housing. But while these two metro areas offer the bulk of startups’ living spaces, they’re also operating in other cities, including Los Angeles, Seattle and Pittsburgh.

From white picket fences to high-rise partitions

The early developers of the U.S. suburban planned communities of the 1950s and 60s weren’t just selling houses. They were selling a vision of the American Dream, complete with quarter-acre lawns, dishwashers and spacious garages.

By the same token, today’s shared housing startups are selling another vision. It’s not just about renting a room; it’s also about being part of a community, making friends and exploring a new city.

One of the slogans for HubHaus is “rent one of our rooms and find your tribe.” Founded less than three years ago, the company now manages about 80 houses in Los Angeles and the San Francisco Bay Area, matching up roommates and planning group events.

Starcity pitches itself as an antidote to loneliness. “Social isolation is a growing epidemic—we solve this problem by bringing people together to create meaningful connections,” the company homepage states.

The San Francisco company also positions its model as a partial solution to housing shortages as it promotes high-density living. It claims to increase living capacity by three times the normal apartment building.

Costs and benefits

Shared housing startups are generally operating in the most expensive U.S. housing markets, so it’s difficult to categorize their offerings as cheap. That said, the cost is typically lower than a private apartment.

Mostly, the aim seems to be providing something affordable for working professionals willing to accept a smaller private living space in exchange for a choice location, easy move-in and a ready-made social network.

At Starcity, residents pay $2,000 to $2,300 a month, all expenses included, depending on length of stay. At HomeShare, which converts two-bedroom luxury flats to three-bedrooms with partitions, monthly rents start at about $1,000 and go up for larger spaces.

Shared and temporary housing startups also purport to offer some savings through flexible-term leases, typically with minimum stays of one to three months. Plus, they’re typically furnished, with no need to set up Wi-Fi or pay power bills.

Looking ahead

While it’s too soon to pick winners in the latest crop of shared and temporary housing startups, it’s not far-fetched to envision the broad market as one that could eventually attract much larger investment and valuations. After all, Airbnb has ascended to a $30 billion private market value for its marketplace of vacation and short-term rentals. And housing shortages in major cities indicate there’s plenty of demand for non-Airbnb options.

While we’re focusing here on residential-focused startups, it’s also worth noting that the trend toward temporary, flexible, high-service models has already gained a lot of traction for commercial spaces. Highly funded startups in this niche include Industrious, a provider of flexible-term, high-end office spaces, Knotel, a provider of customized workplaces, and Breather, which provides meeting and work rooms on demand. Collectively, those three companies have raised about $300 million to date.

At first glance, it may seem shared housing startups are scaling up at an off time. The millennial generation (born roughly 1980 to 1994) can no longer be stereotyped as a massive band of young folks new to “adulting.” The average member of the generation is 28, and older millennials are mid-to-late thirties. Many even own lawnmowers.

No worries. Gen Z, the group born after 1995, is another huge generation. So even if millennials age out of shared housing, demographic forecasts indicate there will plenty of twenty-somethings to rent those partitioned-off rooms.

Southeast Asia’s Carro raises $60M for its automotive classifieds and car financing service

Carro, an automotive classifieds service and car financing startup based in Singapore, has closed a $60 million Series B round to scale its business in Southeast Asia.

The deal was co-led by SoftBank Ventures Korea, Insignia Ventures — the firm from ex-Sequoia Asia partner Yinglan Tan — and Facebook co-founder Eduardo Saverin’s B Capital Group. Other participants include IDG Ventures India founder Manika Arora (via his family fund) and existing Carro backers Venturra,
Singtel Innov8, Golden Gate Ventures and Alpha JWC.

Carro raised a $12 million Series A round in March 2017. This latest capital takes it to $78 million from investors to date, according to Crunchbase.

The 2.5-year-old company said in an announcement that $250 million of vehicles were sold last year across its three markets: Indonesia, Thailand and Singapore. That’s more than double the $120 million it claimed in 2016. Last March, Carro introduced its Genie Finance underwriting business, and over its first year, it claims to have originated over $100 million in loans while amassing a loan book of nearly $40 million.

Carro CEO Aaron Tan previously spent time at Singtel Innov8 and is one of a trio of co-founders. Tan told TechCrunch that the capital will initially be spent growing Carro’s business in Indonesia, Thailand and Singapore, but further down the line, there’s a plan for expansion.

“The exact markets are still to be determined but it may be a small setup in Japan and other sources of cars,” he added.

Carro has already expanded in terms of services. Initially a vehicle marketplace, it launched Genie Finance and has also forayed into insurance brokerage and road-side assistance. It recently introduced a service that completes vehicle sales in 60 minutes — Carro Express — which it said is now available in 30 locations across Southeast Asia.

“We will double down on our online marketplaces and financing in emerging markets this year. Ultimately, we want to improve the experience of selling and buying a car, as well as provide access to capital to the next billion people, which will improve the quality of lives,” Tan said in a statement.

Carro is rivaled by a number of startups, including BeliMobilGue in Indonesia, Carsome, iCar Asia and Rocket Internet’s Carmudi, although with its new raise in the bank Carro is the best-funded by some margin.

iCar Asia, which is managed by Malaysian venture builder Catcha, raised $19 million last November. This year has seen Carsome — which covers Malaysia, Singapore, Indonesia and Thailand — raise a $19 million Series B, BeliMobilGue — Indonesia-only — raise $3.7 million and Carmudi land $10 million.

In the case of Carmudi, the business has retrenched itself. At its peak it covered over 20 markets worldwide across Asia, the Middle East, Africa and Latin America, but today its focus is on Indonesia, the Philippines and Sri Lanka.

Carro’s monster raise follows another notable deal in Southeast Asia today which saw Carousell close a Series C round worth $85 million. The firm added backing from new investors DBS, Southeast Asia’s largest bank, and EDBI, the corporate investment arm of Singapore’s Economic Development Board.

Southeast Asia’s ShopBack moves into personal finance with its first acquisition

Singapore-based e-commerce startup ShopBack came on the radar when it raised $25 million last November, and now the company is making its first acquisition.

ShopBack said today it has picked up Seedly, a fellow Singaporean startup that offers a personal finance service, in an undisclosed deal. The entire team will move over and Seedly will continue as a business under ShopBack’s management.

The ShopBack service is an e-commerce aggregator that helps online sellers reach customers and incentivizes consumers with cash-back rewards. Seedly, meanwhile, is designed to simplify finance for millennials and young people across Southeast Asia. It was founded two years ago and raised seed funding from East Ventures (also a ShopBack investor) and NUS Enterprise in 2016, it also graduated Singapore bank DBS’s “hotspot” pre-accelerator program.

The deal is a fairly rare example of a smaller startup in Southeast Asia being acquired by a larger one for more than just talent, and there seems to be plenty of potential synergies between the two services.

ShopBack aspires to have close touchpoints with how young consumers in Southeast Asia spend their money online, so helping them to manage it plays into that focus. Meanwhile, Southeast Asia isn’t blessed with many local consumer finance services — despite more than 330 million internet users — so the Seedly business can benefit from ShopBack’s regional presence for expansion.

The announcement of the deal comes 24 hours after ShopBack rival iPrice, which aggregates e-commerce in Southeast Asia, picked up a $4 million investment led by chat app company Line’s VC arm.

ShopBack has raised over $40 million to date from investors that include Credit Saison, AppWorks, Intouch, SoftBank Ventures Korea and Singtel Innov8.

Alibaba doubles down on Lazada with fresh $2B investment and new CEO

Alibaba is increasing its control of Lazada, its e-commerce marketplace in Southeast Asia it acquired control of in 2016, after it injected another $2 billion into the business and replaced its CEO with a long-standing Alibaba executive.

Alibaba’s first investment came in April 2016 when it bought 51 percent of Lazada for $1 billion, and it added another $1 billion last summer to increase its equity to around 83 percent. With today’s news, Alibaba has invested $4 billion to date which it said will “accelerate the growth plans” and help further tie the Lazada business into Alibaba’s core e-commerce service.

There’s already been plenty of evidence of increased ties between Alibaba and Lazada. The latter began offering products from Alibaba’s Taobao marketplace across Southeast Asia last year, and Alibaba has replaced Lazada’s tech team leadership with executives of its own. The latest shakeup is the appointment of Lucy Peng as Lazada’s new CEO to replace Max Bittner, who was installed by former owner Rocket Internet back in 2012.

Peng, who is one of Alibaba’s original 12 founders, has been Chairwoman of Lazada and is executive chairman of Ant Financial, Alibaba’s fintech affiliate company. Bittner will remain involved as “senior advisor to Alibaba Group” and apparently involved in future strategy, including further international expansion opportunities.

Lazada has progressed significantly since Alibaba’s first investment — which came at a time when the business had been close to running out of money — but the reality in Southeast Asia is that e-commerce in the region is a loss-making industry with plenty of competition.

Amazon entered the foray last year, but it remains only in Singapore, while Shopee is a two-year-old entrant bankrolled by Sea, formerly Garena, which raised over $1 billion in a U.S. IPO last year.

Alibaba hasn’t just limited its Southeast Asia approach to backing Lazada. The firm also invested $1.1 billion in Tokopedia which competes with Lazada in Indonesia, Southeast Asia’s largest economy and the world’s fourth most populous country.

Is Uber selling its Southeast Asia business to Grab?

 If you read the tech press, you might have seen reports that Uber is pursuing a sale in Southeast Asia that would see Grab, its Singapore-headquartered rival valued at $6 billion, acquire Uber’s business in the region. Rumors of such a tie-in have been rife for a while. Uber sold its China business in exactly such an arrangement in 2016, and it made a similar exit from Russia last year.… Read More

Google confirms investment in Indonesia’s ride-hailing leader Go-Jek

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Tryb Group raises $30M to develop fintech platforms for Southeast Asia

 Tryb Group, a Singapore-based organization focused on fintech services in Southeast Asia, has landed a $30 million investment from Makara Capital. The investment comes from Makara’s $770 million joint fund with the Intellectual Property Office of Singapore (IPOS), which is focused on finding valuable IP in the tech and startup space. TechCrunch understands that Tryb is talking to a… Read More

Techstars is launching its first accelerator program in Asia in partnership with Rakuten

 Techstars is bringing its global accelerator program to Asia for the first time in partnership with Japanese e-commerce giant Rakuten and its chat app Viber. The companies will run a three-month program in Singapore starting in July, according to a joint announcement made today. The focus will be on social messaging and, in particular, technologies and startups that align with Viber, the… Read More

Uber’s new Asia chief wants to work with governments and taxi firms not against them

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Grab, the Uber rival in Southeast Asia, is now officially also a digital payments company

 Grab is best known for rivaling Uber in Southeast Asia, but today the company took a major step into becoming a fintech player, too.
That’s because the ride-sharing firm, which recently raised $2 billion from SoftBank and China’s Didi Chuxing, rolled out support for its GrabPay service among third-party merchants for the first time today.
Grab is present in seven markets across… Read More

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Southeast Asian e-commerce startup Carousell closes $70-$80M Series C round

 Singapore-based startup Carousell is in the money this week after it closed a Series C round of between $70-$80 million, two sources with knowledge of the deal told TechCrunch. Started by three graduates from the National University of Singapore in 2012, Carousell operates a mobile-first listings service for second-hand goods and services in Southeast Asia, Taiwan and Hong Kong. Prior to this… Read More

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Zilingo raises $18M for its fashion e-commerce service in Southeast Asia

 Southeast Asia-based fashion marketplace Zilingo has closed an $18 million Series B funding round led by Sequoia Capital India and Burda Principal Investments. Zilingo was founded less than two years ago by ex Sequoia analyst Ankiti Bose (CEO) and former Yahoo engineer Dhruv Kapoor (CTO). The basic vision is to help Southeast Asia’s thriving independent fashion sellers and… Read More

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Chatbot startup founder sees Southeast Asia potential despite slow start worldwide

 Chatbots may have underwhelmed thus far, but the impact of the technology still has bags of potential in international markets where mobile messaging has been mainstream for years. That’s the view of one startup that’s working to bring the benefit of bots to the mainstream in Indonesia, the world’s fourth most populous country and the largest economy in the growing region… Read More

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Uber’s Asian rival Grab loses its head of engineering

 Grab may be in the process of raising a huge $2.5 billion investment round, with SoftBank, Didi and Toyota confirmed as participants, but Uber’s Southeast Asia-based rival has lost its head of engineering.
Arul Kumaravel, VP of engineering at Grab, has left the company for person reasons, according to a source. It’s not yet clear what his next plan is. Grab confirmed the… Read More

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Uber suspends its service in the Philippines following ban over unregistered drivers

 Uber has suspended its services in Philippines after the national regulator banned it from operating for one month. The country’s Land Transportation Franchising and Regulatory Board (LTFRB) ordered a cease and desist against the U.S. ride-hailing firm on Monday over its apparent flouting of a ban on new drivers. The company initially lodged an appeal and continued with its service,… Read More

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Burda brings its global investment fund to Southeast Asia

 German media giant Hubert Burda is diving into Southeast Asia’s startup ecosystem after its investment arm opened an office in Singapore. Burda, founded in 1898, is anchored in print media. Despite publishing more than 250 titles across the world, it has forayed into digital with some success through acquisitions and new business units. Unlike other print giants, its digital… Read More

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Dymon Asia announces first close of its debut $50M fund for fintech

 Hedge fund Dymon Asia is getting into the venture capital game after it announced its maiden fund.
Dymon Asia Ventures is focused on fintech deals and it is targeting a $50 million raise. Today, its founding partners disclosed a first close of $20 million from a range of LPs that include Thai bank Siam Commercial (SCB), which invested an undisclosed sum via its Digital Ventures arm. Dymon… Read More

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Rocket Internet’s Zalora is retreating from two more countries in Asia

zalora Zalora, the Rocket Internet-backed online fashion store, is continuing its retreat from Asia. The firm sold off its businesses in Vietnam and Thailand last year, and now it is withdrawing from the Philippines and Indonesia.
Yesterday it transpired that Zalora sold 49 percent of its Philippines-based operations to local real estate firm Ayala, as E27 reported, but it is in the process of… Read More

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Indonesia’s Kejora announces first close of $80M fund for Southeast Asia

money cash money cash Indonesia-based early-stage investment firm Kejora has announced the first close of a second fund which is targeted at $80 million for investments in Southeast Asia. Kejora, which is known for its Ideabox accelerator program in Jakarta, has secured one-third of its target, with investment from LPs that include Indonesia’s Barito Pacific Group, Thai conglomerate Charoen Pokphand Family… Read More

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mClinica raises $6.3M to map healthcare data in Southeast Asia

Scattered colorful medical pills and capsules Health startups are pulling in money in Southeast Asia. A week after wellness-focused insurance brokerage CXA drew $25 million from investors, fellow Singapore-based startup mClinica has announced a $6.3 million Series A raise. mClinica was founded in 2012 and its mission is to provide healthcare data in Southeast Asia, much like Nielsen and other traditional analyst houses, through an… Read More

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Grab is investing $100M in startups to help it battle Uber in Southeast Asia

grab2 Grab is upping its battle against Uber in Southeast Asia by announcing a flurry of new initiatives in Indonesia, the region’s largest economy and world’s fourth most populous country, which include setting aside $100 million to invest in startups. Today the Singapore-based company, which is valued at $3 billion and claims 33 million downloads, announced what it is dubbing… Read More

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