Carsome doubles revenue in FY21, though losses widen

Malaysian used-car unicorn
Carsome
 has posted US$656 million in revenue for the financial year ending (FYE) December 31, 2021. That’s double the previous year’s figure, according to its latest regulatory filings available on VentureCap Insights.

Carsome co-founder and group CEO Eric Cheng / Photo credit: Carsome

Losses, however, widened by over 7x to US$138.6 million. But a Carsome spokesperson tells
Tech in Asia
 that a sizable chunk of its expenses came from
fair value adjustments
 that are non-cash expenses and are unrelated to the business’ operating performance.

The firm’s fair value loss on redeemable convertible preference shares, for one, totaled US$49 million.

“The operating
EBITDA
 of FY 2021 – excluding fair value adjustments, non-cash items, and non-operational corporate cost – was in line with the previous year’s EBITDA margin,” says the spokesperson.

This is Carsome’s first financial statement since becoming a unicorn. In September 2021, the company raised

US$170 million
 from Asia Partners, Gobi Partners, and 500 Southeast Asia, among other investors, bumping up its valuation to US$1.3 billion.

This fundraise was reflected in its significantly higher pile of cash and cash equivalents, which amounted to US$340.4 million – over 10x higher from the previous corresponding period.

In January 2022, the company raised another
US$290 million
, and it’s now eyeing a US IPO.

Thin margins

Carsome’s revenue growth came despite the impact of Covid-19 containment measures, which dampened demand for travel in Southeast Asia. For instance, the pandemic’s impact on the automobile industry was estimated to have slashed

Thailand’s vehicle output
 by almost half to a little over 1.1 million units in 2020, according to research firm IHS Markit.

A Carsome spokesperson shares that the firm’s wholesale unit posted a 190% rise in revenue from a year ago and that its retail unit jumped 20x in the same period. The company said its business in all markets demonstrated “strong growth,” with revenue in Thailand and Indonesia soaring 332% and 226%, respectively.

The company does not disclose revenue breakdowns by geography in its financial statements. It did announce recently that it sold
18,000 vehicles
 per month across its four core markets: Malaysia, Singapore, Indonesia, and Thailand.

Revenues, however, are just one part of the story in the thin-margin used-car business. After subtracting the acquisition costs of vehicles sold (i.e., cost of goods sold), Carsome has a gross profit of US$36.6 million, which is just 5.6% of its revenue figures.

This is par for the course in the industry: Close competitor Carro’s gross profit margin for FYE 2020 was
10%
. Compare that with an industry like logistics, which typically has higher margins. Ninja Van, for instance, posted a
61.6% gross profit margin
 for FYE 2021.

Carsome’s 5.6% gross profit margin is a slight dip from 6.5% in FYE 2020. But the revenue growth does mean that, in terms of absolute numbers, gross profit is up 71% from the previous year.

As for expenses, the company has recorded a 141% increase in employee benefits expenses. This appears to be a bid to lure talent with generous incentives.

In February this year, we reported that Carsome had poached about
13 junior and senior executives
from AirAsia’s marketing and tech divisions, as well as 12 junior and senior staff from rival MyTukar’s business development division in 2021. Carsome provided incentives including cash bonuses to dealers for selling used cars to the platform.

Zooming into profitability

It’s clear that Carsome’s focus before it lists is on scaling up. The company
expanded
 its Malaysian office and acquired three entities this year: auto classifieds firm iCar Asia, social media platform WapCar, and car dealership
CarTimes
. The firm then combined iCar Asia and WapCar into a new subsidiary called
WapCar AutoFun
.

It is also launching three additional refurbishment facilities – where the firm will recondition existing vehicles – by the end of 2022 to meet demand in Indonesia and Thailand.

While Carsome is accelerating its growth plans in FY 2022 even amid the pandemic, revenue in the first half of this fiscal year has already surpassed the previous year, says the company’s spokesperson.

Carsome has been reducing its losses every quarter since the beginning of the year and aims to hit EBITDA breakeven by the second half of 2023, the company tells
Tech in Asia
.

Competitor Carro, meanwhile, just announced that its revenue for FYE March 31, 2022 has also
doubled
 to US$464 million.

It’s a more modest figure compared to Carsome’s, but Carro says it has been profitable since FYE 2021.

As leading players in the Southeast Asian used-car market, Carsome and Carro are often neck and neck in capturing a sizable slice of the space.

The two companies run on similar models, but the main difference appears to be Carro’s focus on fintech. The firm’s fintech arm,
 Genie Financial Services
, provides its customers with credit options to purchase their cars. The unit saw its non-performing loans ratio remain at 0.1% and delivered about 30%
return on equity
 for FY 2022.

Singapore-headquartered Carro has also
invested
 in Indonesia’s Bank Index.

While Carsome also facilitates loans through its platform, including through its own Carsome Capital subsidiary, this strategy appears to be nascent. Revenue from financing of vehicles totaled just US$340,000 for 2021.

See also:
Inside Carsome’s and Carro’s all-out war in Malaysia

Together, however, Carro and Carsome have captured less than 5% of the pre-owned cars market in Malaysia, Thailand, and Indonesia as of 2021, according to Momentum Works. There’s still a significant opportunity for both companies to capture more market share, and new competitors like
India’s Cars24
 and
Indonesia’s Moladin
 may yet enter the scene.


Kopi Kenangan to enter Malaysia by Q4

Kopi Kenangan
, an Indonesia-based coffee tech startup, has picked Malaysia as its first market to operate in outside its home country. It plans to open around five to 10 stores in Kuala Lumpur and Bandar Sunway by the fourth quarter of the year,  the company told
Tech in Asia
.

Kopi Kenangan shop at a gas station / Photo credit: Kopi Kenangan

Edward Tirtanata, CEO and co-founder of Kopi Kenangan,
first announced
 these expansion plans while speaking at Nexticorn International Summit 2022. However, the company didn’t disclose the amount of investment it would put into the venture.

Kopi Kenangan added that along with the expansion plans, it looks to launch a new brand or product – which would depend on which country it’s eyeing to enter. The plans come as the word “
Kopi
” in its brand name, which translates to “coffee,” is understood only in Indonesia and Malaysia.

In May, Tirtanata had told
Tech in Asia
 that the firm plans to
open its first store
 outside Indonesia this year. He further said it aims to enter two or three countries in Southeast Asia soon.

The company didn’t give out other country names in its regional expansion plan when asked about it again. “We are still focused on our expansion in Malaysia and our domestic dominion in Indonesia,” said Tirtanata.

“We anticipate that consumer behavior in Indonesia will be similar to Malaysia, where online is as important as offline. We will leverage our tech capability that we have built (back-end and front-end), so that we could understand consumers’ behavior better and replicate our success in Indonesia,” he added.

See also:
Kopi Kenangan’s return to profits after a year in the red

In December 2021, Kopi Kenangan achieved unicorn status after it raised
US$96 million
 in the first close of its series C round.


Google to select up to 15 SEA, Pakistan firms for accelerator

Google has opened applications for its accelerator program that will help startups in Southeast Asia and Pakistan solve specific and technical challenges using the tech giant’s resources.

Photo credit: Google

The
Google for Startups Accelerator
 program is looking for 10 to 15 startups in the seed or series A stages and based in Indonesia, Malaysia, Pakistan, Singapore, Thailand, Vietnam, or the Philippines. It will accept applications from firms that operate in industries such as ecommerce, finance, healthcare, SME-focused B2B solutions, education, agriculture, and logistics.

Founders selected for the program will be paired with industry experts as well as mentors from Google to tackle the challenges that their startups are facing.

See also:
Series SEA: Who’s investing in the region’s AI startups?

According to the tech giant, Southeast Asia saw US$11.5 billion in deal activity for the first half of 2021. Startups in Pakistan raised US$350 million in funding last year, a 5x growth from 2020.

“One explanation for this acceleration is that Pakistan and Southeast Asia both have a thriving youth population,” Google said in a statement. “These young people tend to be tech-savvy, have an interest in entrepreneurship, and are more in tune with global trends.”

Startups that have previously participated in the Google for Startups Accelerator program include Shoplinks, Sehat Kahani, Kata.ai, and Rumarocket.


Lazada-backed TNG Digital struggles to meet its potential

Welcome to The Top Up! Delivered every Wednesday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in fintech. Get it in your email inbox by
registering here
.

Hello there,

In the early days of Indonesia’s digital payments scene, I – like many others – extensively used GoPay, Ovo, and Dana for food deliveries and other online transactions.

Offline payments, though, were a different story. Unless the cashbacks were particularly mouth-watering, my immediate instinct had always been to take out my trusty BCA debit card – something I didn’t have to continually top up.

But then my behavior changed in late 2019, when Bank Indonesia launched its nationwide QRIS system, which lets consumers pay with any e-wallet through one unified QR code. I found myself paying for offline payments both with e-wallets as well as through BCA’s mobile banking app much more frequently.

A similar thing happened in Malaysia. As my colleague Emmanuel writes in this week’s Big Story, the state-linked TNG Digital e-wallet has struggled to turn a profit despite being one of Malaysia’s top four players. Part of that reason is due to a national QR code system that has eroded the revenue streams of e-wallet operators in the country.

But that has turned out to be just one of TNG Digital’s many problems. Despite its links to Touch ‘n Go, CIMB Bank, Ant Group, and Lazada, bureaucratic influence and a mismatch of priorities between the e-wallet and its parent firm have become a key issue, insiders tell
Tech in Asia
.

In this week’s Hot Take, I also take a look at a seemingly burgeoning trend among fintech startups: debt financing. It’s an attractive option for founders in the current macro environment, but does its benefits outweigh the risks?

–
Putra

THE BIG STORY

Making sense of TNG Digital and Lazada’s hefty investment in the firm

Image credit: Timmy Loen

The Malaysian company’s parent firm may have a monopoly over key public services, but a staid bureaucracy stands in the way.

THE HOT TAKE

Move aside equity financing, venture debt is coming in hot

Atome is one of the fintech startups that has raised venture debt. / Photo credit: Atome

Here’s what happened:

Funding Societies announced this week that it raised
US$50 million
 in credit facilities from HSBC Singapore.

Earlier this month, the same bank provided a
US$100 million debt facility
 to buy now, pay later company Atome.

This year,
Lendable
, which provides capital to fintech firms in emerging markets, also extended US$20 million and US$30 million worth of debt financing to the Philippines’
BillEase
 and Indonesia’s
Alami
, respectively.

In India, fintech startups are
expected to lead
 in venture debt funding this year, continuing last year’s trend where 111 deals totaling US$538 million were struck.

Here’s our take:

Venture debt is on the rise.

While its appeal has always been clear – it lets founders raise funds without diluting their equity stakes – it’s become particularly attractive in the current macroeconomic environment.

Lower valuations have made equity financing less attractive to founders, with venture capitalists preferring more conservative deals. That said, the trend could also be born out of a desire to
avoid the VC trap
.

While the US is
seeing a surge
 in venture debt, a similar trend is playing out here in Southeast Asia.

InnoVen Capital SEA, a venture debt platform providing financing to startups and growth-stage companies in the region, tells
Tech in Asia
 that it is seeing “strong interest” for venture debt from both early-stage and later-stage companies.

But it’s important to note that not all debt financing is the same.

Lending firms typically partner with a bank or financial institution, which provides the source of funds, instead of extending credit from their own balance sheets. Take Funding Societies’ HSBC Singapore deal, for instance: the funds will be disbursed as loan products for the neobank’s SME clients.

But we’re talking about another type of debt financing here: venture debt that will be used for fueling operation and growth. In Atome’s case, the firm plans to use the US$100 million in fresh funds for expansion efforts in Asia.

Debt financing is by no means exclusive to fintech startups. Last year, at least two venture debt funds – from
Genesis Alternative Ventures
 and
Iris Capital Partners
 – were launched in Southeast Asia, and both of them professed to be sector agnostic. But a vast majority of this year’s debt deals have involved fintech companies.

Indeed, a
survey
 on Indian startups from venture debt provider Stride Ventures found that 45% of its respondents said that fintech startups will be most actively raising venture debt this year. They’re followed by consumer startups (14.3%) and agritech firms (11.9%).

According to Paul Ong, partner at InnoVen Capital SEA, there is a “natural business utility” for fintech startups and those with business models that are focused on lending to raise debt.

Shariah-compliant fintech startup Alami raised debt financing from Lendable. / Photo credit: Alami

But many use cases for venture debt – such as financing working capital, inventory, capital expenditure, or acquisitions – also apply to industries outside of fintech, he adds.

Lendable, which connects investors to fintech companies, has provided debt financing to online lending platforms like BillEase and Alami. But it has also provided a
senior secured loan
 of up to US$10 million to Workmate, a workforce management platform, to support the startup’s worker marketplace.

There may be multiple reasons why Lendable is drilling down on the fintech sector specifically. One may simply be the high demand for loans by online lending platforms. Given that its proprietary risk tech platform also helps assess potential deals involving fintech companies, it would make sense to continue focusing on that specific vertical.

As attractive as venture debt may be in a downturn, it does come with its own set of risks, the biggest drawback being repayment pressure, Ong notes.

In the US, the Federal Reserve is seeing
continued interest rate hikes
 as it fights inflation, which could, in turn, be passed on to firms in higher interest rates on their repayments. Would startups have the liquidity to withstand them?

Meanwhile, Armando Argueta, vice president for early-stage ventures at Silicon Valley Bank,
wrote
 that venture debt is designed for companies who “prioritize growth over profitability” – not necessarily a popular maxim in recent times.

Still, the risks may outweigh the benefits for founders, especially now that down rounds are becoming more of a reality. Singapore-based FinAccel is but one example: Just last week, the firm is
reportedly
 raising funds at a US$1.5 billion valuation – a 25% drop compared to its US$2 billion valuation last year.

–
Putra

NEWS YOU SHOULD KNOW

Also check out
Tech in Asia’s
 coverage of the fintech scene
here
.

1⃣
PayMongo CEO goes on ‘voluntary leave’
: COO Isabel Ridad has been appointed as acting CEO of the Philippine payment gateway.

2⃣
PayMongo’s former CFO: ‘I never stole from any company’
: Jay Olos posted the statement on LinkedIn, where he also apologized for remarks made toward female colleagues.

3⃣
Funding Societies scores $50m in debt funding from HSBC Singapore
: The fund will be disbursed through tailored loan products for SMEs across five countries.

4⃣
Indonesian regulator halts new crypto exchange registrations
: It remains unclear if the new rule is permanent, but the circular could be amended at any time.

5⃣
Vietnam’s Touchstone invests $1m in Credify
: The Singapore-headquartered fintech firm is building a platform that connects financial service companies with consumers through its ServiceX solution.

That’s it for this edition – we hope you liked it! Do also check out previous issues of the newsletter
here.

See you next week!


Making sense of TNG Digital and Lazada’s hefty investment in the firm

Malaysian e-wallet services provider TNG Digital (TNGD) was born from privilege: Its parent firm, Touch ‘n Go (TNG), has a monopoly over key public services. Meanwhile, CIMB Group, which owns TNG, is Southeast Asia’s fifth-largest bank by assets and is a government-linked company.

Pic credit: Touch ‘n Go

Over the past year, TNGD has been making headlines for courting a list of institutional investors. Recently, ecommerce giant Lazada led an equity funding round that saw the e-wallet provider
raise
 705 million ringgit (US$168.3 million).

This came after the company raised US$75 million from insurer AIA Malaysia and US-based private equity firm Bow Wave Capital Management in August 2021.

But the road to fintech hegemony for TNGD isn’t clear-cut despite its government ties, according to company insiders that spoke with
Tech in Asia
. They cite bureaucratic influence and a mismatch of priorities between the e-wallet provider and its parent firm as the key issues.

Bleeding red but in pole position

To be sure, the TNG e-wallet is among the top four e-wallets in Malaysia, together with GrabPay, ShopeePay, and BigPay, government sources tell
Tech in Asia
.

The sources were involved in a recent e-wallet initiative for the youth which required the participation of the four largest e-wallet providers in the country by market share.

Malaysian fintech chiefs and investors believe that TNGD could possibly “be in pole position by a large margin” due to its presence not only in the capital city of Kuala Lumpur but throughout major cities nationwide.

Despite its ubiquity, however, TNGD remains in the red as, according to company insiders, the firm does not make money on e-wallet transactions.

There are two reasons for this. First, the introduction of the national QR code effectively prevented e-wallet providers from making money from transactions.

Initially, users who wanted to make e-wallet payments had to download the specific e-wallet to make a transaction.

But with the national QR code, users can use any e-wallet service or bank app to make their purchases and are not charged a transaction fee for payments worth up to 5,000 ringgit (US$1,114).

Second, a TNGD insider tells us that the only time the company earns from e-wallet transactions is if the purchase went through a point-of-sale (POS) terminal. But in this setup, “most of the proceeds goes to the POS provider.”

The source didn’t divulge further information but added that TNGD is moving aggressively into financial services, especially microloans, to make up for the lack of revenue from e-wallet transactions.

TNGD’s current shareholders are TNG, AIA Malaysia, Bow Wave Capital Management (via ASP Malaysia LP), Ant Group, Alipay, and Lazada. The latter three are controlled by Chinese tech behemoth Alibaba.

Both TNG and TNGD are under CIMB Digital Assets, which is CIMB Bank’s portfolio of digital businesses and ventures.

Image credit: Timmy Loen

In 2017, Ant took up a
substantial stake in TNGD
 and proved to be a lifeline for the company. The Chinese fintech giant helped remake the e-wallet along the lines of Alipay, which has also grown from providing e-payments to insurance, investments products, and microloans.

TNGD rolled out GO+, an investment product available on the e-wallet, in March last year. TNG Group CEO Effendy Shahul Hamid told Malaysian business publication
The Edge
 in an April interview that GO+ had reached 2.2 million users at the end of February, with total assets under management of “just shy of half a billion ringgit (US$111.4 million).”

But TNGD only ventured into microloans in April this year when it launched GOPinjam. The product, however, drew flak from the public for imposing interests as high as 36% per year, depending on the loan amount and duration.

The Edge
 found that GOPinjam had
the highest interest or profit rate in the country
 when compared to licensed moneylenders and banks. Most institutions, it added, charged 18% a year at most.

Effendy, who is also the CEO of CIMB Digital Assets, defended GoPinjam and told the business publication that the product’s rates ranged from 8% to 36%, depending on various factors such as loan amount or creditworthiness.

The rates, he said, cover not only the costs to disburse the loans, which are “essentially very high,” but also the risk undertaken by the group.

“No one else in the market is giving out loans as low as 100 ringgit (US$22) and allows them to pay back as quickly as one week with an interest of only 69 sen (US$0.15),” he said in the report.

TNG and TNGD are regulated by Malaysia’s central bank – Bank Negara Malaysia – and the Securities Commission Malaysia.

Enter the problematic parent

Perhaps the most pressing hurdle that has hampered TNGD is its relationship with its parent firm TNG.

Dubbed Malaysia’s first fintech product, TNG was incorporated in 1997. In its debut, it offered a prepaid card for commuters to pay for rail fees and tolls.

Since then, the firm continues to have one competitive advantage: It is a monopoly. TNG is the sole electronic toll collector for all highways in Peninsular Malaysia and a common ticketing system for major public transport in the country.

Every citizen over the age of 12 carries a TNG card of sorts — the TNG payment feature is embedded into the chip of Malaysia’s national identity card, therefore turning these into something similar to a TNG prepaid card.

However, even if TNG and TNGD share the same CEO, there hasn’t been much collaboration between the two companies.

Even after TNG ventured into the fintech space with TNGD in 2017, it did not enable seamless prepaid card reloads from the e-wallet app.

This proved to be a thorn for users, who had to rush to a nearby kiosk to manually reload their TNG prepaid cards. To make matters worse, they could only reload their cards during a stipulated time period.

After some time, the firm introduced two features: PayDirect and RFID. PayDirect allows users to link their cards with the TNGD e-wallet for toll payments. In the event that there’s insufficient balance on the card, the toll fare is deducted from the e-wallet.

RFID, on the other hand, is a sticker with a radio-frequency chip that drivers need to attach to their front windscreen.

The RFID tag is unique to each user and is synced to TNGD’s e-wallet. So a driver simply needs to pass through the RFID toll gate, and the fees are deducted from the e-wallet directly.

However, take up has been slow. According to a July 18 parliamentary reply, only about 20% of toll users rely on the RFID. The government has set a target to introduce a multilane free flow system that is RFID-dependent by 2026.

Even so, toll companies have not increased RFID lanes. So far, there is only one RFID lane per major toll gate, leading to congestion during peak hours.

And despite being able to sync the e-wallet with RFID, the entire system doesn’t recognize a negative balance. This means that if your e-wallet is short on cash, you’ll have to manually pay the toll fee at the gate.

TNG only solved the prepaid card reloading issue this April when it introduced new prepaid cards with near-field communication. This followed the government’s announcement early this year that it would be
reviewing the entire setup
 to allow the public to pay tolls using any digital payment provider – though they would still need to sync up with an RFID tag.

The sluggishness to fix the reloading problem, according to sources in TNGD, was due to differences between the parent firm and the e-wallet provider. “The reload option has been the number one request for so long, but TNG failed to move quickly because they felt it wasn’t a priority,” one source said.

Rocky path to profitability

Moving forward, Lazada’s July investment in TNGD will likely be closely watched by market participants such as Angel Low, an associate principal with The Hive Southeast Asia.

The deal could be a move for both entities to turn a profit, Low tells
Tech in Asia
.

While Lazada has reached a “massive volume” in terms of gross merchandise volume and users, “they still have yet to turn it around to break even,” she said, citing disclosures in Alibaba’s 2022 (FY22) Annual Report.

Alibaba’s international commerce segment for FY22 recorded a negative adjusted
EBITDA
 for that financial year at a US$1.4 billion loss.

The tech behemoth said this was “primarily attributable to the increase in Lazada’s marketing and promotional spending for user acquisition and engagement,” among others.

TNGD insiders we spoke to, on other hand, see Lazada’s investment as more of a directive from Ant. They claim that current shareholders, including Ant, do not want to pony up more cash.

The aim for TNGD, the sources say, is to go regional. The firm is working with Visa to launch a prepaid card this year that will expand its acceptance worldwide, including the ability to cash out through an ATM.

Aaron Sarma, co-founder and general partner of accelerator ScaleUp Malaysia, tells
Tech in Asia
 that despite its privileges, TNGD will not crowd out the fintech space to the point that Malaysia is left “with a monopoly in the digital wallet space.” Newer fintech players or startups, he opines, will move in to target niche users.

In turn, incumbents will be pressed to stay ahead of the game, the Kuala Lumpur-based investor argues, as “there’s a potential threat of ‘being out-innovated’ by digital banks.”

Sarma says that Malaysia has already “done a good job” in getting banks to go online. And, arguably, incumbent banks “have the advantage of traditional banking infrastructure, capital, and a locked-in customer base.”

But the game changer, he adds, is innovation in reaching the underserved, which fosters financial inclusiveness.

TNGD isn’t a digital banking licensee as, according to CEO Effendy, the company couldn’t cobble up a compelling consortium. The CEO, however, told
The Edge
 that the unit would still be in the digital banking space.

But can TNGD compete with incumbents as well as newer digital banks?

Company sources we spoke to remain pessimistic. Many of the digital banks are run by entrepreneurs, have better talent, and aren’t bogged down by bureaucracy, they argue.

TNG’s owner, CIMB, is controlled by Khazanah Nasional, Malaysia’s sovereign wealth fund, which reports to the country’s prime minister and finance minister. Effendy, too, is a corporate man and has been with CIMB since 2014.

“TNGD, on the other hand, operates in a constrained, risk-averse environment. When your parent is a government-linked company, the fear of a deal gone wrong or a missed opportunity is heightened due to public scrutiny. Also, bureaucrats can’t pivot as quickly as entrepreneurs,” one company source adds.

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.4 ringgit.


SG fintech firm Fomo Pay banks $13m in series A money

Fomo Pay
, a Singapore-based fintech firm, has raised US$13 million in its series A funding round led by Jump Crypto – the digital assets arm of Jump Trading Group.

Investors including HashKey Capital, Antalpha Ventures, Ab Initio Capital, and Republic Capital also took part in the fundraise.

Fomo Pay founder and CEO Louis Liu (right) / Photo credit: Fomo Pay

Founded in 2015, Fomo Pay provides a one-stop solution for merchants in Singapore and Malaysia by facilitating a variety of payment methods such as WeChat Pay, Baidu Wallet, GrabPay, and Visa QR.

The latest investment will be used to ramp up hiring and develop its infrastructure. The startup will also diversify its product offerings and work with regulators on central bank digital currency projects.

In September 2021, Fomo Pay
secured new licenses
 from the Monetary Authority of
Singapore
 to operate three new regulated activities: a merchant acquisition service, a domestic money transfer service, and a digital payment token service.

See also:
Razer’s payments platform is profitable a year from launch, has global ambitions

“Our goal is to work in harmony with all stakeholders on both developmental and regulatory approaches to achieve the vision of Singapore as an innovative and responsible global digital asset hub,” said Fomo Pay founder
Louis Liu
.

Fomo Pay said it recorded higher transaction volumes in the first half of the year compared to its full-year levels in 2021. The company added that it has an “extremely strong” client pipeline.


Apple Pay lands in Malaysia

Apple
has launched
 its digital payment service in Malaysia. Starting today, Apple Pay is available for Mastercard and Visa cardholders of Maybank, AmBank, and Standard Chartered Bank. The service will be rolled out to users with American Express cards later this year.

Photo credit:
DenPhotos / Shutterstock

This marks the second Southeast Asian market for Apple Pay. The tech giant previously
released
 the payment service in Singapore in 2016.

With Apple Pay, customers can pay for products and services with their iPhone, Apple Watch, iPad, and Mac devices when making purchases in store or online. The payment service uses Apple’s Face ID and Touch ID features as authentication methods.

Currently, Apple Pay is accepted at retailers such as KFC, McDonald’s, Starbucks, and Watsons, as well as in ecommerce websites like Shopee.

Among Apple’s main rivals, Samsung provides
full services
 for Samsung Pay in Malaysia, while Google Pay is
limited
 to only online and in-app payments in the country.

See also:
How Axiata’s Boost stands out in SEA’s heated fintech race


Carsome reaches 18k cars sold a month as it reaches 7th year

Malaysian unicorn
Carsome
 said it has reached 18,000 cars sold per month across its four core markets.

Photo credit: Carsome

The company, which is celebrating its seventh year of operation, offers used-car refurbishment and sales, as well as vocational training in vehicle reconditioning. It’s active in Malaysia, Singapore, Indonesia, and Thailand.

A company statement highlighted the group’s retail business as its fastest growing unit, expanding from a single center in Malaysia to over 20 across its key markets in less than two years. The segment currently contributes a quarter of Carsome’s revenue.

Meanwhile, the startup’s refurbishment arm launched its first Carsome Certified Lab refurbishment facility this year, which can recondition over 2,000 vehicles a month. The company plans to launch three more facilities by the end of 2022 to meet refurbishment demands in Indonesia and Thailand. It already operates more than 120 inspection and retail centers in its four markets.

The company’s educational arm, Carsome Academy, has also reached over 1,500 students to date, and they have undertaken over 6,000 hours of training. The segment, which is accredited by the Malaysian Ministry of Human Resources, has also expanded to Indonesia and Thailand to provide vocational training and job opportunities.

Carsome, which recently
expanded
 its Malaysian office, also saw the acquisition of three entities, namely auto classifieds firm iCar Asia, social media platform WapCar, and car dealership
CarTimes
. Both iCar Asia and WapCar were then combined into a new subsidiary,
WapCar AutoFun
.

On the fintech side, Carsome recently obtained a
digital Islamic banking license
 as part of a consortium led by KAF Investment Bank. It is one of the first companies in Malaysia to hold such a license.

Carsome raised US$290 million in a
funding round
 in January, bringing its valuation to US$1.7 billion. While it initially said that it plans to go public this year, its dual IPO has been
delayed
, with the company citing “deteriorating macroeconomic conditions.”

See also:
Can Cars24 take on Carro, Carsome in SEA?


AirAsia to explore air taxis in Malaysia with UK firm

AirAsia
 has signed a one-year partnership with UK-based advanced air mobility (
AAM
) infrastructure developer
Skyports
 to explore the development of air taxis in Malaysia.

Vertical take-off and landing passenger aircraft / Photo credit: Capital A

AirAsia Aviation Group Limited’s dedicated AAM unit has inked an agreement with Skyports to establish a fully operational vertiport network.

Feasibility studies for integrating the network will be carried out, and the two firms will also identify potential sites and operational requirements to implement the project. Initial assessments will prioritize Kuala Lumpur, according to a statement.

While AirAsia brings its aviation expertise to the table, Skyports has extensive experience in creating electric vertical takeoff and landing gear for aircraft. Skyports will also engage local regulatory bodies and other such organizations.

Yun-Yuan Tay
, Skyports’ Asia-Pacific head, said the partnership highlights the steady progress of AAM development and interest in Malaysia and the wider APAC region.

See also:
Can AirAsia’s super-app ambitions take off?


Fave to provide BNPL service for CIMB users in Malaysia

Malaysian bank
CIMB
 has partnered with fintech platform
Fave
 to provide buy now, pay later services to its customers,
Digital News Asia
 reported.

The partnership will give CIMB’s 8.4 million cardholders a mobile-friendly and flexible payment option that is accepted at over 15,000 merchant locations across Malaysia.

In addition to the BNPL service, shoppers can earn up to 15% cashback at selected merchants.

According to
Samir Gupta
, CEO of group consumer banking at CIMB, the partnership marks a step forward for the company’s digital adoption efforts.

Despite recent
headwinds
 hitting BNPL players globally, the market is still flourishing in Southeast Asia, with many firms
saying
 they continue to see strong traction.

According to a
Google, Temasek, and Bain report
, digital lending transactions in the region, including BNPL, will reach US$116 billion in 2025, growing at a compound annual growth rate of 31% from 2021 to 2025.

See also:
Fave bounces back from Covid-19, cuts losses


1337 Ventures opens applications for 43rd cohort of digital accelerator

Malaysia-based
1337 Ventures
, a VC firm that focuses on early-stage startups, has opened applications for the 43rd cohort of its Alpha Startups digital accelerator program.

The 1337 Ventures ECF accelerator team / Photo credit: 1337 Ventures

The six-week program will guide entrepreneurs from the ideation stage of their firms to the minimum viable product phase. They can also seek consultations with industry experts and mentors to accelerate their business.

Participants may receive up to 50,000 ringgit (US$11,220) as pre-seed funding and up to 100,000 ringgit (US$22,436) in Amazon Web Services cloud credits, digital skills training, and job portal credits, among others.

Established in 2012, 1337 Ventures has served over 1,000 startups from five countries. The VC firm has launched accelerators for companies including FWD, NTIS, Bank Negara Malaysia, Khazanah Nasional, Telekom Malaysia, Digi, the Malaysia Digital Economy Corporation, CIMB Bank, RHB Bank, and Maybank.

See also:
Has Malaysia’s largest VC lost its luster?

Previously, 1337 Ventures mentored startups in Malaysia like BloomThis, ParkEasy, Eat Cake Today, and Maideasy, which were all part of its accelerators in the past.

The Alpha Startups digital accelerator program will close with a virtual demo day, where teams can present their concepts to investors and VCs. Past notable judges in the program include Suresh Thiru, former CEO of Seek Asia,
Syed Haizam
, managing director of The Hive Southeast Asia, and
Tony Yeoh
, CEO of Digital Penang.


Capital A sees major YoY gains in passengers, super app users as travel returns

Malaysia’s
Capital A
 is seeing the effects of the returning demand for travel, seeing a 633% year-on-year jump in passengers carried in the second quarter of 2022 with a
load factor
 of 84% – similar to its pre-pandemic numbers.

Photo credit: Capital A

Previously named AirAsia Group, Capital A said its consolidated airlines business – which includes its operations in Malaysia, Indonesia, and the Philippines – carried around 5.6 million passengers from April to June this year.

With people’s interest in travel rekindled, the company said the Airasia Super App saw record highs in the growth of average monthly active users. It hit 10.6 million in the second quarter of the year, climbing 236% compared to the previous year. The number of transactions through the platform also saw gains in the reported quarter, registering a 524% year-on-year growth to hit 4.9 million.

Additionally, the company saw a rise in ecommerce deliveries done through its logistics service, Teleport, with a 630% year-over-year increase to land at almost 1.2 million in the quarter.

See Also:
The C-suites powering Capital A

The firm’s boost in passengers mostly came from its home country of Malaysia, seeing a massive 1,276% year-on-year leap in travelers to hit almost 3.9 million. Its Indonesia operations saw around 715,000 passengers, and its Philippines arm flew almost 1 million people, logging year-over-year jumps of 132% and 480%, respectively.

In Thailand – which was not included in its consolidated airline numbers – the firm carried over 1.7 million passengers, representing a 133% rise.


Malaysia-based TNG Digital raises $168.3m led by Lazada

TNG Digital
 has raised 750 million ringgit (US$168.3 million) in its latest equity funding round led by ecommerce giant Lazada Group.

Touch ‘n Go Group CEO Effendy Shahul Hamid. / Photo credit: Touch ‘n Go Group

The funding round also included a follow-on investment by Touch ‘n Go, which is a TNG Digital shareholder and the firm’s parent company. This brings the total funding raised by TNG Digital over the last 18 months to over US$220 million.

Touch ‘n Go Group CEO Effendy Shahul Hamid said the strategic investment will bring new value propositions to the user and merchant bases of Lazada and Touch ‘n Go. He added that the funding will be used to expand all areas of digital financial services.

In 2017, TNG Digital was jointly founded by Touch ‘n Go and China’s Ant Group, which split ownership of the firm on a 51% to 49% basis, respectively.

TNG Digital
reportedly
 raised US$75 million from insurer AIA Malaysia and US-based private equity firm Bow Wave Capital Management in August 2021. Following AIA’s investment, Touch ‘n Go’s stake in TNG Digital was diluted to around 47% from 51%.

See also:
Org Chart: The people behind Boost

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.46 ringgit.


Touch ’n Go partners with PayNet for cashless campaign in rural Malaysia

Malaysian fintech firm
Touch ’
n Go Group
 has joined
PayNet
, a payments solution provider, to launch a cashless promotion campaign in the country’s Kedah state.

Touch ’n Go lane at a toll plaza in Malaysia / Photo credit: Touch ‘n Go

Called Mai Kita Cashless, which means “let’s go cashless” in Bahasa Malaysia, the campaign aims to boost cashless payments for merchants and consumers in rural communities via Touch ’n Go’s e-wallet and PayNet’s DuitNow QR service.

The program will last until the end of this year and will serve approximately 300 merchants in the area. As part of the campaign, users will earn 5 ringgit (US$1.12) in cashback for every cashless transaction.

Established in 1997, Touch ’n Go is one of Malaysia’s largest electronic payments providers. Its e-wallet, which now has over 16 million users and more than 550,000 merchants, was launched in 2017 via
a partnership
 with Ant Group.

Meanwhile, PayNet is Malaysia’s national payments network that develops central infrastructure for the country’s financial markets. Its largest shareholder is the Central Bank of Malaysia.

According to
a 2022 study by Visa
, 74% of Malaysian consumers have adopted digital payment methods, making the country only three years away from becoming a cashless society.

See also:
Has Malaysia’s largest VC lost its luster?

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.45 ringgit.


Indonesia’s Doku buys Malaysian fintech firm for $7.5m

Indonesia-based fintech firm
Doku
 has acquired Malaysian payments gateway
SenangPay
 for US$7.5 million, the companies said in a joint statement.

(From left) SenangPay founders Al’dilah Yunus, Mansor Abdul Rahman, and Khairul Azizi Mohd Razali / Photo credit: SenangPay

Doku financed the deal with the funding it received last year from Apis Growth Fund II, a private equity fund managed by Apis Partners.

The acquisition will help SenangPay adopt new services – such as e-wallets, remittances, and offline transactions – that can help its merchants go from brick-and-mortar models into digital businesses, which is in line with the Malaysian government’s
“Malaysia Digital” initiative
.

Established in 2015, SenangPay helps Malaysian businesses accept payments through credit cards, debit cards, internet banking, and all major e-wallet providers in the country. The company is also registered with Mastercard International as a payment facilitator for the Asia-Pacific region.

See also:
Pleasant surprise in Malaysia’s digibank race

Meanwhile, Doku provides online and offline payment solutions, serving over 150,000 merchants, including TikTok, Google, Garuda, Prudential, and Traveloka. It has five licenses from the Bank of Indonesia, which enables its payment gateway, domestic fund transfers, cross-border remittances, biller payments, e-money and e-wallet services, and QR code payments.

“We believe the opportunity to enter Malaysia is all the more attractive given the similar socio-cultural backgrounds of our two countries,” said
Nabilah Alsagoff
, Doku’s CEO.

Recently, SenangPay launched SenangZakat, a platform where users can make donations in Malaysia.


Bank Islam Malaysia to launch digibank app this month

Publicly listed
Bank Islam Malaysia
 is set to officially launch its digital banking app called Be U in the middle of this month,
The Edge Markets
 reported, citing a statement from the bank’s CEO
Muazzam Mohamed
.

The news comes two months after the country’s central bank
awarded digital banking licenses
 to five applicants, including consortiums led by Grab and Sea Group. Bank Islam was not one of the awardees, but it will
use its existing Islamic banking licenses
 for its offering.

Bank Islam said that it has invested 34 million ringgit (around US$7.7 million) to set up the digital bank, and it aims to acquire up to 400,000 users in the next 12 months.

According to Mohamed, Be U focuses on university students, fresh graduates, and gig workers, so it will not compete with Bank Islam’s existing market in the SME sector.

In the first quarter of this year, Bank Islam’s revenue hit 774 million ringgit (around US$174.6 million), a slight increase of 0.4% compared to last year. However, its net profit dropped 33% to 105.9 million ringgit (around US$23.9 million) in the same period.

See also:
Pleasant surprise in Malaysia’s digibank race

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.43 ringgit.


Has Malaysia’s largest VC lost its luster?

Malaysia Venture Capital Management (Mavcap) is the largest government-owned venture capital firm in Malaysia, with a total portfolio value of about 5 billion ringgit (US$1.29 billion).

Mavcap CEO Shahril Anas Hasan Aziz / Photo credit: Mavcap

Founded in 2001, Mavcap’s mission was to invest in
ICT
-related companies across the entire funding spectrum, from pre-seed to late stage.

But after around two decades, Malaysia-based investors and founders have begun questioning Mavcap’s role in stimulating the tech space, especially after it stopped direct investments in 2011 to solely focus on being a fund of funds (FoF).

Frustrations, uncertainty, and doubt

Four investment professionals who spoke to
Tech in Asia
 on condition of anonymity flagged a host of issues.

Firstly, they say it’s difficult to directly engage Mavcap with proposals, claiming that they have to go through intermediaries to get the attention of the agency.

Secondly, they highlight that Mavcap’s funding has become too small, making it difficult for the agency to make meaningful investments.

The sources add that not much is known about Mavcap’s investment returns, aside from press statements announcing new funds and investments and information available on its website.

A government official familiar with Mavcap told
Tech in Asia
 that they only knew details about the agency’s investment through Teak Capital, a boutique VC firm headquartered in Kuala Lumpur, which was appointed as Mavcap’s outsource partner in July 2008.

Teak would fetch a premium for its investee company, GroupsMore, which was acquired by ecommerce platform Groupon in January 2011.

The government official said that the deal helped Mavcap get a 2x return on its investment. However, they couldn’t divulge more details as the information has not been made public.

Thirdly, the investors that
Tech in Asia
 spoke to question Mavcap’s relevance in light of Penjana Kapital, a newer government agency that has not only been making headlines but also has the same mandate as Mavcap in being an FoF.

The sources argue that success stories of foreign funds being domiciled in Malaysia like Thomas Tsao of Shanghai-based Gobi Partners and of raising a Malaysian VC class such as Victor Chua of Vynn Capital are rare cases.

Tsao opened Gobi’s Southeast Asian headquarters in Malaysia in 2012, and he also relocated to the country. Chua, on the other hand, worked in Mavcap and then moved to Gobi before setting off on his own with Vynn Capital.

Lastly, the investors expressed concern over the mood in government agencies across the board. These entities may be adopting a wait-and-see approach to deals because of an impending general election.

Ismail Sabri Yaakob, Malaysia’s current prime minister, has until the third quarter of 2023 to call for national polls, according to the country’s constitution.

Yes, but…

In an email reply to
Tech in Asia
, Mavcap answered the concerns that the investors had mentioned, especially over its track record.

A Mavcap spokesperson said that aside from Teak, US-based Ethos Capital and a few of the agency’s funds have “successfully yielded returns from their investment.” However, the spokesperson didn’t drill down to specifics.

Ethos partnered with Mavcap and
launched a fund
 in 2007. This initiative was part of Mavcap’s 80 million ringgit (US$18 million) allocation for its outsourced partners’ program.

As for internal rate of returns, these “would be determined by the respective VC fund managers and the key industries they are focused on,” the spokesperson said. The gestation period for VCs is around eight years “to ensure attractive return on investment.”

The spokesperson also pointed out that Mavcap has so far created more than “50 local fund manager personnel and several local VC firms,” which has led to “an increased participation by the private sector” in Malaysia’s startup ecosystem, among other results.

Grappling with systemic difficulties

But how and when did all these problems bubble to the surface? To get a better picture, one needs to recall that Mavcap was established in 2001. At the time, Mahathir Mohamad was on his first term as Malaysia’s prime minister (1981 to 2003).

Back then, the goal was to have an agency that provided alternative financing for budding ICT firms in order to make the landscape more competitive.

To that end, the government provided Mavcap with an allocation worth 970 million ringgit (US$219.1 million) with the mandate of funding startups as well as seed and early-stage firms in ICT-related industries.

Like many government agencies, Mavcap has been led by bureaucrats. Many of its current directors are from the civil service. For example, Shahril Anas Hasan Aziz, the agency’s current CEO, is an economics graduate who worked with various government investment agencies before joining Mavcap in 2015.

Some of the companies that Mavcap directly invested in during its early days include JCBNext, which runs the
JobStreet.com
 platform, as well as Censof and Aemulus, which are both Bursa Malaysia-listed tech firms.

Apart from managing its own funds, Mavcap also partners with others such as 500 Startups, Gobi, and telco giant Axiata, to name a few. Through these investments, Mavcap supported unicorns such as Singapore-headquartered Grab, Indonesian ecommerce player Bukalapak, and Malaysia-based Carsome, among others.

As of 2021, Mavcap is among
the three largest VCs
 in the country in terms of funding secured, according to the latest data from capital markets regulator Securities Commission Malaysia (SC).

But despite its influence and seniority, Mavcap is being eclipsed primarily due to a high concentration of government-backed VCs, leading to a duplication of roles and mandates.

The SC also reported that 45% of capital in Malaysia’s VC space came from government agencies and investment companies.

For instance, government-backed Cradle funds pre-seed and seed companies, which taps into the same pool of investments as Mavcap.

Other government agencies that operate in the same universe as Mavcap include Malaysia Debt Ventures, which provides alternative financing to ICT-related companies, and the Malaysia Technology Development Corporation, which focuses solely on tech companies, as its name indicates.

In fact, the Malaysian government
halved
 Mavcap’s annual budget under the 11th Malaysia Plan (11MP), a government development roadmap. The 11MP ran from 2016 to 2020.

The move effectively forced Mavcap to seek partnerships with the private sector in deploying investments.

Mavcap was also missing in this year’s government budget allocation. Instead, it was Cradle that received an
20 million ringgit allocation
 (US$4.5 million) for startups.

Outshone by a younger rival

That said, it’s Penjana Kapital that has been giving Mavcap a run for its money. Penjana Kapital’s FoF is similar to Mavcap’s and also targets the same pool of tech companies.

It’s also a relatively young agency. Though Penjana Kapital was established only in 2020, it oversees a 1.2 billion ringgit (US$271 million) fund where the government provides 600 million ringgit (US$135 million) with the rest being matched by private investors.

Two consultants familiar with how Penjana Kapital was set up told
Tech in Asia
 that the FoF has an upper hand because it reports to the Finance Ministry while Mavcap is under the purview of the Science, Technology and Innovation Ministry. The former has greater heft and bureaucratic influence than the latter.

Taufiq Iskandar, Penjana Kapital’s chief information officer,
said
 in a May 16 interview with business publication
The Ken
 that the FoF had closed 1.3 billion ringgit (US$293.6 million), or 8% above the original target of 1.2 billion ringgit (US$271 million).

From the 1.3 billion ringgit, Penjana Kapital committed 581.7 million ringgit (almost US$131.4 million) at end-April, with the rest matched by private VCs. This leaves the agency with 19 million ringgit (nearly US$4.3 million) to be matched with newer investments.

Penjana Kapital has also launched Kapital X, a VC talent development program in partnership with Sunway iLabs, the innovation arm of local conglomerate Sunway Group.

Taufiq also told
The Ken
 that Kapital X saw 30 participants – from final-year undergraduates to junior and mid-level public market analysts – working on investment deals alongside analysts from local and regional VC firms.

Ng Wan Peng, the former COO of the Malaysia Digital Economy Corporation, tells
Tech in Asia
 that programs like Penjana Kapital, with its FoF, incentives, and talent development initiatives, are what the country needs at the moment.

“Hopefully, this gives us success stories. We lack that,” she says.

At least a billion ringgit

Ng opined that the government needs to put in policies or incentives that encourage funds, especially foreign ones, to set up shop in Malaysia. Some of these include making it easier and quicker for a foreign fund to be domiciled in the country.

Unlike many others, however, she doesn’t see multiple government agencies competing for the same pool of startup talent as a problem because Malaysia has yet to reach a saturation point. Instead, greater allocation of funds is what’s needed.

Mavcap, in her opinion, has to set aside “at least” a billion ringgit if it wants to push the needle.

Kevin Brockland of Kuala Lumpur-based Indelible Ventures, also thinks that there should be more money on the table. The current amount that government agencies shell out “are not the type that would get startups results” he tells
Tech in Asia
.

Brockland cites Cradle’s MyStartup’s accelerator program, which promises to fund companies anywhere between 50,000 ringgit and 250,000 ringgit, which is hardly enough for a seed-stage company. He believes that the funding needs to be bumped up to US$250,000 or 1.1 million ringgit for each startup.

“Malaysia needs more institutional capital and value-adding investors,” he says. The lack of such support, he observes, has led Malaysia to fall behind its peers, particularly in seed investing.

Recalling his experience domiciling his company in Malaysia, Brockland said the entire process “took a lot” of money and time.

If agencies including Mavcap could address these issues, then the funds will follow, he adds.

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.42 ringgit.


Malaysia’s Speedhome falls victim to SEA’s layoff bug

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Hi readers,

Renting a home in Malaysia can be a tedious process. You’ll have to deal with an agent, whose primary goal is to earn a commission and not finding you a proper unit.

But before you can even do that, you first have to dodge the racism here. While our consitution prohibits discrimination on based on grounds including sex, religion, and race, we don’t have anti-discrimination laws per se. Malaysia had that chance in 2018 to ratify the International Convention on the Elimination of All Forms of Racial Discrimination but we didn’t.

So prepare yourself for questions like, “What is your race?” or “Which country are you from?” And you can bet that locals and foreigners will be treated differently. You can also count on the fact that not all locals are treated fairly, too.

I’m a mixed-race brown man, and yes, I have been on the receiving end of this treatment despite being Malaysian. Most of the time I have landed a unit because it’s my wife who does the negotiating – she is of a different ethnicity.

Let’s say you have earmarked a unit. The agent will then start to get pushy and rush you to sign a rental agreement and collect – here comes the best part – a so-called deposit that can amount to four months’ rent.

The deposit supposedly acts as some sort of “insurance” in case the tenant goes rogue, trashes the place, or worse, turns it into a crime den.

Of course, you have to sign a tenancy agreement. The terms will not be in your favor, save for the fact that in case  the landlord breaches the agreement, they will return your deposit.

So in order to rent a space, you have to pay not only a deposit that protects landlords against your potential future bad behavior but also the legal fees for a lopsided tenancy contract.

Luckily, my landlords have been great and I’ve also been a good tenant. But the entire process and the upfront cash can be stressful.

This is where Speedhome comes in. The company promises to do away with the middlemen and the hefty upfront deposits. It also offers insurance for landlords.

This sounds great, but tackling a systemic issue like the rental market can be perilous. Maybe that’s why the company is downsizing so it can better allocate resources.

It’s a sad story. If you drive by major highways in and around Kuala Lumpur, you’ll find huge digital billboards of Speedhome CEO Wong Whei Meng trumpeting perks and such. It was an entirely different picture when Wong took to LinkedIn on July 1
to announce
 that he is starting a talk show on Facebook where viewers can tip him.

Wong wrote that four years after putting up Speedhome, he is worth millions on paper. But “that’s just a facade; it doesn’t pay the bills.” The reality is, his family’s  “savings are dwindling,” so they “started to set a strict daily meal budget.”

Somehow all that marketing spend, the seemingly pro-tenant perks as well as funding (it secured a Series A round last year) did not pay off.

What truly happened? I don’t know. For now, Malaysia has caught the layoff bug. But as I cover some of these stories, I ask myself, “Why did such a great idea like Speedhome, which could have benefited a lot of middle-income families, just couldn’t take off?”

—
Emmanuel Samarathisa
, journalist at
Tech in Asia

Top stories this week

Image credit: Timmy Loen

1.
Malaysian proptech firm Speedhome to cut workforce

The company has decided to downsize despite securing series A funding last year from two Malaysian investors.

2.
Lazada’s chief strategy officer set to leave post

Magnus Ekbom is the last member of the founding team to depart the firm.

3.
Zilingo’s Ankiti Bose resigns from the company’s directorships

Bose’s resignation comes more than a week after co-founder Dhruv Kapoor filed a management buyout proposal to the Zilingo board.

4.
Can ShopBack’s $80m reinvention take it to IPO?

A plain-vanilla cashback platform may not be very exciting to investors, but one with a fintech spin may be a different story.

5.
What the Russia-Ukraine crisis spells for spacetech in SEA

Spacetech know-how and talent are exiting Russia and Ukraine because of the war, but Southeast Asia seems too slow to capitalize on the opportunity.

6.
Ex-Binance CFO has big plans for Coins.ph, Gojek’s ‘underloved,’ ‘orphaned’ business

Wei Zhou, the former chief financial officer at Binance, plans to transform Coins.ph into a Web3 powerhouse.

7.
EU tech crackdown a warning shot for SEA’s big tech companies

Southeast Asia’s big tech companies are safe from the European Union’s new regulations for now, but they should start preparing for future challenges.

8.
China is embracing Web3 without crypto

China is preparing to export its version of Web3 to the world. But will it gain mainstream acceptance?

9.
Terra, Celsius raise prospects for crypto insurance

Investors are looking to put their money behind crypto insurers who can cut through the red tape of the traditional insurance sector.

10.
BNPL struggles amid global recession – except in Southeast Asia

Rising interest rates, inflation, and a looming recession have cast doubt on the viability of the BNPL model. But SEA’s players may be an exception.


Exclusive: Rocket Internet-backed Flash Coffee bags $33m in first series B tranche

Rocket Internet-backed
Flash Coffee
 has raised US$32.8 million in the first close of its series B funding round, the company’s founder and CEO
David Brunier
 told
Tech in Asia
. However, details of the lead investor in the round remain undisclosed.

Other investors in the round include Delivery Hero, Columbus Holding International, White Star Capital, Conny & Co, DX Ventures, and Al-Dhow Engineering General Trading & Contracting, according to Flash Coffee’s regulatory filings.

Photo credit: Flash Coffee

Currently, the company is in the final stages of hitting the second close of its series B round.

Founded by ex-Foodpanda chief marketing officer David Brunier and former Bain & Company executive
Sebastian Hannecker
 in 2020, Flash Coffee offers premium coffee at prices more than 50% lower than Starbucks.

Compared with other coffee startups like Luckin Coffee and Kopi Kenangan, which often focus on one market, the Rocket Internet-backed firm has aimed to be a regional player since its launch.
It now operates in Indonesia, Singapore, Hong Kong, South Korea, Japan, Thailand, and Taiwan. It plans to expand into the Philippines, Malaysia, and Vietnam by this year.

In 2020, when Flash Coffee last revealed its financial statements, the company recorded a loss of US$2.2 million while posting revenue of nearly US$247,000.

From early 2021 to August 2021, Flash Coffee opened 90 new coffee outlets. The company targets an additional 350 new stores across Asia by the end of 2022.

See also:
Fore Coffee brews its way to profitability

In April 2021, Flash Coffee
landed US$15 million
 in a series A round led by White Star Capital. DX Ventures, Global Founders Capital, and Conny & Co also participated in the round, boosting Flash Coffee’s total funds raised to US$20 million at the time.


Grab rolls out intercity travel services in Singapore, Malaysia

Grab Malaysia has rolled out intercity travel services in Malaysia and Singapore, giving users the ability to purchase bus and ferry tickets for direct routes between the two countries.

Photo credit: Grab

Grab Intercity was adapted onto the super app’s platform via a team-up with
Splyt
, an service integration solution provider, and
Easybook
, a regional transportation booking platform. The new service also allows users to pay for tickets with GrabPay and earn points for Grab’s reward system.

With Grab Intercity, users can choose from over 15,000 available routes and buy travel tickets on the app. The feature will also allow Grab users to purchase bus tickets to over 30 destinations in Singapore from 11 different states and cities across Malaysia.

“It’s only through collaboration with industry leaders across different sectors that we’re able to simplify routine errands such as planning for a holiday,” said
Rashid Shukor
, director of country operations and mobility at Grab Malaysia.

Having direct routes between the two nations will also support economic recovery as it would make travel more convenient, according to Wee Ka Siong, Malaysia’s transport minister.

See also:
How GrabMaps plans to beat Google Maps in $1b sweepstake for SEA dominance


ScaleUp Malaysia to pour $1m into 10 startups in 2022 cohort

Startup accelerator
ScaleUp Malaysia
 is looking to invest US$100,000 into each of the 10 startups in its 2022 cohort.

ScaleUp Malaysia Team / Photo credit: ScaleUp Malaysia

Startups in Malaysia, Southeast Asia, and globally that are already generating revenue
can apply
 for the program. Firms must be able to show a “strong” product value proposition, a sizable market, and a “compelling” go-to-market plan, ScaleUp Malaysia said.

The program, which starts in the fourth quarter of this year, will include a one-month investor readiness bootcamp, along with access to venture capital networks. The program will also offer two-year support from an external management team.

Within five weeks of submission, applicants will know if they are accepted into the program.

“We recognize that this is a very precarious time for founders with so much uncertainty with the economic situation in the region and around the world,” said ScaleUp Malaysia managing partner Andre Sequerah. “This is why we have streamlined our process to make sure that exceptional startups get funded quickly so they hit the ground running and scale effectively.”

In the company’s previous cohort, which saw startups apply from 26 countries, the 11 participants received US$60,000 in funding.

See also:
Malaysian proptech firm Speedhome to cut workforce


MyTukar changes brand lane, adopts Carro’s color scheme

MyTukar
, a used-car marketplace based in Malaysia, has changed its brand identity to align with the appearance of its parent company, Singapore-based Carro.

The update includes a revised logo and a new color scheme to replace the shade of teal that MyTukar used. It has now adopted an orange color palette, which mirrors Carro’s signature tint.

(From left) MyTukar founder and chairman Fong Hon Sum and company CEO Derrick Eng with Aaron Tan, Carro’s co-founder and chief executive officer / Photo credit: MyTukar

MyTukar also announced that its first Carro-powered campaign will be rolled out in the coming weeks.

Customer service is another area that MyTukar plans to improve. It is eyeing a new fleet of flatbed trucks that will deliver vehicles directly to customers’ homes. In addition, it plans to offer buyers an interest rate that can go as low as 1.88%, along with same-day loan approval and vehicle collection.

As part of its rebranding, MyTukar is hosting
an automotive fair
 at its flagship showroom in Malaysia. It will feature over 1,000 MyTukar-certified pre-owned cars and can accommodate more than 6,000 guests.

See also:
Can Cars24 take on Carro, Carsome in SEA?

Founded in 2018 by
Fong Hon Sum
, MyTukar aims to transform the used-car trading process through its full-stack, digitized platform. Since its inception, the company’s transaction volumes soared by 63% for wholesale and 260% for retail while its net revenue increased by 89%.

A year later, Carro set up shop in Malaysia by
investing
 US$30 million in MyTukar, adding to its list of subsidiaries.

A
global chip shortage
 and deteriorating economic conditions have fueled higher demand for used vehicles in Malaysia. In the first quarter of 2022, demand for pre-owned cars in the country
shot up
 by 8% while prices also rose by 5%.


Malaysian proptech firm Speedhome to cut workforce

Speedhome, a Malaysia-based property rental platform, will be laying off staff.

Employees have begun looking for jobs after learning of an impending retrenchment at the company, several industry insiders told
Tech in Asia
.

Photo credit: Speedhome

A Speedhome spokesperson also confirmed the matter with
Tech in Asia
, saying that job cuts were “inevitable” as the proptech firm had recently embarked on a “cost optimization” exercise.

The number of affected staff was not disclosed. Speedhome has 99 employees, according to its
LinkedIn
 page.

The spokesperson said the company was advised to “recalibrate” its business plan, citing “higher interest rates, economic uncertainty and funding environment.”

However, the move is not expected to affect Speedhome’s customers or services, the Speedhome representative added.

Founded in 2015, Speedhome’s sales pitch is connecting landlords directly with tenants, removing the need for real estate agents or the collection of hefty security deposits.

The platform also provides rental protection and insurance through a partnership with Allianz General Insurance.

Last year, Speedhome
announced plans
 to enter Bangkok and to pursue a super app for property investors after it raised 7 million ringgit (US$1.5 million) in series A round from two Malaysian institutional investors: insurer Allianz Malaysia and venture capital firm Gobi Partners.

Malaysian startups have not been exempted from the layoff wave that recently hit tech companies in Asia.

Shopping aggregator iPrice
dismissed
 20% of its employees while services marketplace Kaodim
ceased operations
 today.

Track all the layoffs across Asia
here
 and help us help us maintain this list by
filling this form
 with any information on job cuts and affected employees.

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.41 ringgit


Payments major Wise posts 33% YoY jump in revenue for FY22 as costs rise

Global payments firm
Wise
 recorded strong growth in revenue and profit right after its CEO
Kristo Kaarmann
 was said to be under investigation by UK authorities due to his
tax affairs
.

Photo credit: Wise

Wise posted a 33% year-on-year increase in revenue to almost 560 million pounds (US$
683.6 million)
 for its 2022 financial year ended March 31, the company said in its first financial report as a publicly listed firm.

The growth was mainly driven by rising transaction volumes. Total volume transferred in FY22 was US$93.2 billion, up 40% from FY21.

Adjusted
EBITDA
, meanwhile, saw a 12% year-on-year rise to US$
148
.1 million for the period. The company reported a reduced adjusted EBITDA margin – from 26% to 22% – as it planned to invest back into its teams, products, and marketing.

Its gross profits registered a 43% increase to US$453.7 million during the same period.

However, Wise’s growth in these areas came with 48% and 31% increases in the company’s administrative and employee costs, respectively. The company spent US$392 million on the former and US$225.4 million on the latter.

The payments firm said it will continue to invest sustainably into its infrastructure, with a target adjusted EBITDA margin at or above 20%. It’s also looking to hit revenue growth of between 30% to 35% in FY23.

In July 2021, Wise
listed
 on the London Stock Exchange at a valuation of US$11 billion.

The financial report comes after Kaarmann came under investigation by the UK’s Financial Conduct Authority for failing to pay over US$878,000 for the 2017 to 2018 tax year, resulting in a US$446,000 fine.

The regulator has the power to deem Kaarmann unfit to be a senior manager of an investment firm, a role he occupies as Wise offers stock trading in addition to international payments.

Currency converted from pound sterling to US dollar: US$1 = 0.82 pounds.

See also:
Series SEA: Who’s investing in the region’s fintech startups?


Ikea taps 2C2P for Southeast Asia payments

Singapore-based payments platform
2C2P
 said it will handle payments for Ikano Retail, a franchisee of retail giant Ikea, for customers in Singapore, Malaysia, Thailand, and the Philippines.

Ikea store in Singapore / Photo credit: Wikipedia

The payments firm’s services will cover online transactions through credit cards and available e-wallets in each market. This includes DBS, OCBC, Standard Chartered, and UOB accounts via eNETS for Singpore, as well as FPX for Malaysia, PromptPay for Thailand, and GCash for the Philippines.

Additionally, 2C2P’s payment platform will also offer Ikano Retail with customized features that automatically reconcile multiple business streams and provide accurate data reporting.

“By offering a full-suite solution that integrates Southeast Asia’s differing payment methods, we hope to provide Ikea with a competitive advantage and help them keep pace with their customers’ changing payment preferences and needs,” said
Agnes Chua
, executive director at 2C2P.

The deal comes amid increased spending in Southeast Asia’s ecommerce market, which is expected to hit
US$179.8 billion by 2025
.

In March, 2C2P
teamed up with ShopeePay
 to process digital payments in Southeast Asia, while it
partnered with BillEase
 last year to boost buy now, pay later services in the Philippines.

In April,
Ant Group became the majority stakeholder in 2C2P,
 linking the latter’s merchants to AliPay+.

See also:
These are the most active investors in Southeast Asia’s startups


Gojek confirms no plans to enter Malaysia (Updated)

Update (June 24, 11 a.m. SGT): This article was updated with comments from a Gojek spokesperson.

Gojek has confirmed to
Tech in Asia
 that the ride-hailing giant has no plans to enter the Malaysian market after reports of a car with the company’s logo sparked rumors of its expansion plans.

The company said that the vehicle spotted was being filmed as part of an upcoming campaign that is expected to be released later this year. A black Honda City car with a Gojek sticker on the side was
reportedly
 seen filming in Kuala Lumpur while a traffic policeman was guarding the shooting spot.

There are
33 e-hailing companies registered
 with them as of June 2022, according to Malaysia’s Land Public Transport Agency. The list does not include Gojek.

In 2019, the Indonesian firm
considered running
 pilot trials in Malaysia after the government agreed to give the company’s motorcycle ride-hailing services a principal approval in the country. Gojek had also
announced plans
 to enter the Malaysian market by 2020.

However, Malaysia’s government
made a u-turn
 on motorcycle ride hailing in 2021, citing high death rates involving motorcyclists in road accidents.

See also:
GoTo Group’s financial health in 4 charts


Gobi and Malaysian social finance firm to launch $20m Shariah fund

Malaysia-based social finance platform
Ethis Group
 has teamed up with VC firm
Gobi Partners
 to set up a US$20 million Shariah-compliant seed fund.

Representatives from Gobi and Ethis / Photo credit: Ethis

The joint fund will invest in startups that comply with Shariah law, initially focusing on startups in the ASEAN and Middle East and North Africa regions.

Set to have its first close by year-end, the investment vehicle aims to support startups that produce goods for the Muslim community.

“The establishment of this joint fund will allow us to channel investments into tech startups driving change and making an impact,” said Ethis COO
Mohamed Shehzad Bin Mohamed Islam
. “Venture capital is in high demand and suitable for ethical investment.”

Based in Malaysia and Hong Kong, Gobi Partners supports early- to growth-stage startups in emerging and underserved markets. So far, the VC firm has invested in more than 320 startups.

The companies expect the joint fund to benefit from Gobi’s network of startups and Ethis’ relationships in Shariah-compliant funding.

Although the Muslim community could make up nearly a third of the world’s population by 2060, its “digital needs are largely unmet or underserved,” said Gobi co-founder
Thomas Tsao.

“Through this partnership with Ethis and the creation of this dedicated fund, we will now be able to fund, nurture, and support even more Muslim entrepreneurs,” he added.

See also:
A new digital bank could instill VC faith in Indonesia’s sharia fintech


East Ventures leads Malaysian D2C ecommerce firm’s $29m series B

RPG Commerce
, a Malaysia-headquartered ecommerce firm, has raised US$29 million in a series B funding round led by East Ventures. Other investors that participated in the round include UOB Venture Management, Vertex Ventures Southeast Asia & India, and RHL Ventures.

RPG Commerce founders / Photo credit: RPG Commerce

Founded in 2017, the direct-to-consumer ecommerce company acquires brands and develops its own. The company runs an end-to-end brand development, production, and delivery process to sell products. It has offices in Singapore, Malaysia, and the Philippines.

To date, RPG has more than 10 in-house international brands offering consumer products like clothing and homeware. These include Thousand Miles, Bottoms Lab, Montigo, and Cosmic Cookware.

“RPG takes a multi-category, multi-brand approach while retaining the roll-up model as an option, making them a unique and successful player in the ecommerce landscape,” said
Willson Cuaca
, co-founder and managing partner of East Ventures.

The funds raised will be used to improve the company’s technology and development processes as well as to expand its portfolio of brands.

See also:
Shopee layoffs hit payments, food delivery and LatAm teams


Org Chart: The people behind Boost

Org Chart
 maps out the people at the top of Asia’s most prominent tech companies. Who are the key decision-makers? How are the teams organized? What does it tell us about the company’s priorities? We continue this series with Malaysian fintech company Boost.

Boost, the fintech arm of Kuala Lumpur-based telco giant Axiata, recently made headlines when it bagged the highly coveted digital banking license in Malaysia together with RHB Bank.

Launched in 2017, Boost was initially under Axiata Digital as the subsidiary’s e-wallet arm. This was when parent firm Axiata ventured into the digital space with a mandate to grow Malaysia’s first tech unicorn.

That ambition was somewhat realized in June 2020 when life insurance firm Great Eastern invested US$70 million for a 21.8% stake in Boost, valuing the company at US$320 million at the time. But it was used-car platform Carsome that beat Boost to the punch in being crowned Malaysia’s first unicorn.

The Great Eastern deal, more than just providing capital, also saw Boost become a holding company. It now had four core businesses: lifestyle app Boost Life, merchant solutions platform Boost Biz, microinsurance and microfinancing arm Boost Credit, and cross-border payments gateway Boost Connect.

At the helm of Boost is group CEO Sheyantha Abeykoon, an Axiata veteran who joined the telco giant’s Sri Lankan unit in 2013. Abeykoon then became the CFO of Axiata Digital in 2017 before taking on the CEO mantle in 2021.

Among the four aforementioned subsidiaries, only Boost Credit doesn’t have a CEO.

Eric Chong, a sales veteran, heads Boost Biz. His work experience revolves around the telco space, particularly in enterprise sales. Chong also has experience working in key telco multinationals including Malaysia’s Axiata and Digi.Com, Indonesia’s PT Smartfren Telecom, and Australia’s Syniverse.

Raja Mansukhani, who also comes from a telco or teleservices background, leads Boost Connect. He joined Axiata in 2009 as its assistant vice president overseeing group operations. Before that, he worked in Indian-based firms such as Tata Teleservices and Tech Mahindra. He joined Boost as executive director in charge of revenue prior to working his way up to becoming the Boost Connect chief.

Meanwhile, Ungku Norliza Ungku Halmie, an auditor by training, is Boost Life’s CEO. She debuted at Axiata in 2010 as an assistant vice president for business and planning performance and would go on to become Axiata Digital’s CFO in 2014. She joined Boost as finance operations director in 2017.

Currently, Boost tells
Tech in Asia
 that it has more than 10 million users and a merchant base of nearly 500,000 touchpoints in both Malaysia and Indonesia.

But despite having a government-linked company as its parent firm, it still has a lot of ground to cover especially in cementing itself as a dominant player in the fintech space. Axiata is majority owned by Malaysia’s sovereign wealth fund Khazanah Nasional.

Notably, Boost was missing from a recent government initiative that channeled credits to Malaysian youth between the ages of 18 and 20. The eligible e-wallet providers chosen for the program were Grab, Shopee, BigPay, and Touch ‘n Go.

That said, some Kuala Lumpur-based banking analysts that
Tech in Asia
 spoke to say that Boost has a chance in the SME segment due to its exposure in the space. However, they also noted that the sector is familiar territory for the Grab and Sea consortiums, which makes winning market share “an uphill battle.”

Boost chief Abeykoon tells
Tech in Asia
 that digital banking “is not a green field but more a brown-field venture” for the group, providing it with an “incumbent advantage.”

He points to Boost’s track record in SME financing, among others, as a differentiator. According to Abeykoon, the fintech group has already disbursed about 1 billion ringgit worth of loans in Malaysia, with “almost 42% of our customers having never received credit from other financial service providers before.”

Boost’s non-performing loan ratio “remains at below 4% on average in Malaysia,” he adds. Malaysian ratings agency Ram Ratings’ A1/Stable
rating
 for Boost’s maiden tranche of medium-term notes backs this claim.

Here are some other observations:

Despite being owned by a parent firm in the telco industry, some of Boost’s C-suite executives come from a tech background. For example, Boost CTO Norman Noble previously worked at Seek as its director of engineering, while Boost chief business officer Gurpreet Kheera had stints as country head at proptech firm SmartBuild Asia and a consultant at Bain & Company.

Diana Boo’s role as chief marketing officer was newly created when Boost Holdings was formed in June 2021. She was previously Lazada Malaysia’s chief marketing officer.

Four Boost department heads are also AirAsia alumni:

Edwin Ng, Boost’s head of engineering, was a senior manager at AirAsia’s software engineering department from May 2020 to September 2021. He joined Axiata Digital as its head of engineering that year and retained the same role at Boost.

Gary Foo, who joined Boost as its head of sales and merchants marketing in June 2018, served as AirAsia’s regional head for ancillary marketing.

Yap Poh Peng was hired as Boost head of analytics and loyalty after she served as chief analytics officer at AirAsia’s Big unit, which manages the airline’s loyalty program, from July 2018 to October 2020.

Karen Kow, Boost’s cluster head (loyalty), also worked as head of commercial and strategic partnership at AirAsia’s Big unit from March 2019 to December 2020.

Boost Indonesia is led by Stefanus Warsito who joined Axiata Digital in 2019 as a director. He is a finance veteran with stints at HSBC and Modalku, among others. Stefanus reports to CEO Abeykoon.

Boost has only verified with
Tech in Asia
 the data on its C-suite executives and not the heads of its departments. We also checked our information with sources familiar with Boost and publicly available information.

You can also check out our coverage of Boost
here
. If you find any missing or inaccurate data, do reach out to tianwen@techinasia.com so we can fill in the gaps

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.39 ringgit

Update (June 17, 10:56 a.m.): This article was updated to accurately reflect Karen How’s, Gary Foo’s, Shang Tan’s, Dina Seikh Salleh’s and Feruz Razak’s positions as well certain facts about Boost and its parent, Axiata.

Credits
Graphics:
 Timmy Loen
Editing:
 Putra Muskita, Tay Tian Wen, and Jaclyn Tiu


TreeDots to shut down group-buying service this month

TreeDots
, a Singapore-based food marketplace, is set to shut down its group-buying service by June 27, 2022, with its last delivery scheduled for the day before.

TreeDots co-founder and CEO Tylor Jong / Photo credit: TreeDots

In a message to hosts and buyers through Telegram, the firm also said that it would immediately reduce the availability of products on the group buy platform until June 24.

The message said the decision to cease the group-buying service “was not easy.”

Instead of tapping into its B2B infrastructure, the B2c or group buy presented ” more differences, meaning separate infrastructure to build, than areas of synergies,” Tylor Jong, co-founder and CEO at TreeDots, told
Tech in Asia.

The development comes almost half a year after the platform, which offers surplus food products at lower prices, raised
US$11 million in series A money
 and announced plans of expanding in the region. It is not yet known how many jobs will be affected by this closure.

TreeDots’ main selling point is connecting buyers to produce rejected for looking imperfect. With operations in Singapore, Malaysia, and Indonesia, the firm claims to have saved
2,500 tonnes of food
 by diverting surplus food. It also has 120 employees as of March this year.

The firm is looking at internal hiring for affected employees, and has shared their resumes to other companies with their permission, added Jong.

Singapore saw a boost in
group-buying services in 2021
 amid a growing trend of
bulk purchasing
 in China. Such services generally
lower product prices
 for individuals by ordering huge quantities before splitting the costs among buyers.

Asia has been seeing a series of layoffs, with more than 13,000 workers getting the boot in March alone. Shopee, for one, is
trimming teams in Southeast Asia,
 while
cryptocurrency
 and
logistics
 players are also affected.

See Also:
Shopee layoffs hit payments, food delivery and LatAm teams

Track all the layoffs across Asia
here
 and help us maintain this list by
filling this form
 with any information on job cuts and affected employees.

Update: (June 17, 2022, 3:30pm SGT): TreeDots side on the issue has been added.


AirAsia CEO seeks New York listing in 2023

Capital A
 is looking to list low-cost carrier AirAsia and its proprietary super app on the New York Stock Exchange, believing the time is right for the IPOs,
reported

the Financial Times.

Tony Fernandes, AirAsia Group’s chief executive / Photo credit: World Travel & Tourism Council

According to Capital A CEO Tony Fernandes, the group has already begun its compliance work. He said the AirAsia listing will be slated for “sometime next year,” and the AirAsia super app will follow after that. He also believes he will be able to bring on investors based on his past success when he went from an entertainment industry executive to an airline operator.

During the pandemic, the group – which primarily operated the low-cost carrier – moved to ecommerce and other digital businesses like ride-hailing and fintech.

See also:
Org chart: The C-suites powering Capital A

Capital A’s shares on the Malaysian stock exchange are still under
Practice Note 17
 – a sign of a listed company in financial distress. However, Fernandes insisted that it is an accounting issue that “doesn’t reflect the fundamentals of the company.”


Carsome names Nick Nash, others to new advisory board

Malaysia-based car marketplace
Carsome
 announced that it has appointed a new advisory board, which aims to help accelerate the company’s regional expansion and growth.

Photo credit: Carsome

The board currently has four members:
Nicholas Nash
, managing partner and co-founder of Asia Partners;
Harish Bahl
, founder of Smile Group;
Pandu Sjahrir
, managing partner of Indies Capital; and
Dan Neary
, vice president of Meta Asia Pacific. Nash will also serve as board chairman.

Carsome said the advisory board’s experience in scaling tech companies across Southeast Asia will help it refine its decision-making capability as well as place the company’s next step on firmer ground.

“We are confident that their expertise, experience, and network will invaluably help in Carsome’s mission to deliver trust, choice, and transparency to our customers across the car transaction and ownership experiences across Southeast Asia,” said
Eric Cheng
, Carsome co-founder and CEO, in a statement.

See also:
Inside Carsome’s and Carro’s all-out war in Malaysia

Founded in 2015 by Eric Cheng and
Jiun Ee Teoh
, Carsome is the
first tech unicorn
 in Malaysia. It is one of Southeast Asia’s largest automotive ecommerce platforms, having already expanded to Indonesia, Thailand, and Singapore.

In January, it
raised
 US$290 million in a round led by 65 Equity Partners, SeaTown Holdings, and Qatar Investment Authority, which brought the car marketplace’s total valuation to roughly US$1.7 billion.


Malaysia’s iPrice Group sacks 20% of employees

Malaysia-based iPrice Group, a shopping aggregator, has laid off 20% of its employees.
Tech In Asia
 has verified that the company has let go of 50 employees.

Photo credit: iPrice

The firm said that the measures were taken to focus the business on its core mission “to help people save money” shopping online. Currently, the firm is following legal and contractual requirements and helping laid-off staff find new opportunities, according to a statement.

Founded by
David Chmelař
 and
Heinrich Wendel
 in 2014, iPrice helps users shop for products online by providing price comparisons, seller discounts, and promotions.

“Whilst we proved these new services all resonated with online shoppers, they each required further investment with a longer-term payback,” Chmelař said. He added that given the uncertain economic environment, the company will strive to be “hyper-focused” on its core product.

See also:
Tracking layoffs across Asia’s startup ecosystem

The company
said
 that two-thirds of Southeast Asian shoppers overpay by 10% when online shopping and its site publishes 7.5 billion offers to help its 100 million users find cheaper deals.

The job cuts come three months after iPrice Group received a US$5 million investment from Japanese firms KDDI Corporation and Itochu Corporation.


J&T Express buys $136m land in Malaysia for logistics center

J&T Express
, an Indonesia-based logistics firm, has acquired a 30-acre parcel of land in Malaysia for 600 million ringgit (US$136.4 million).

Photo credit: J&T

The land is located in Bandar Rimbayu, a township around 30 kilometers away from Port Klang, the main gateway by sea into Malaysia. It will be used to build an integrated logistics center for express distribution, logistics, transportation, and warehousing to meet J&T Express’ business needs in the country.

Roy Zeng, CEO of J&T Express Malaysia, called Bandar Rimbayu “the golden triangle of Selangor,” believing in the future development potential of the area.

“The new facility will be fitted with our advanced technology, which enables us to better tap on our existing networks to meet the growing demands of the burgeoning ecommerce industry in Southeast Asia,” said Charles Hou, group vice president of J&T Express.

See also:
The keys to J&T Express’ rapid global expansion.

Founded in 2015, J&T Express now has localized express networks in 12 countries: China, Indonesia, Vietnam, Malaysia, Thailand, the Philippines, Cambodia, Singapore, Saudi Arabia, the United Arab Emirates, Mexico, and Brazil. The firm serves over 2 billion people.

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.40 ringgit.


Binance to work with Malaysian cryptocurrency exchanges to expand locally

Global cryptocurrency exchange
Binance
 is open to working with Malaysian cryptocurrency exchanges to accelerate adoption of the digital asset in the country.

Changpeng Zhao, CEO and founder of Binance / Photo credit: MX Global

Binance CEO and founder
Changpeng Zhao
 said the plan was to “go global by going local.” This would involve working with partners and regulators to shape safe ecosystems that would encourage mass adoption.

“Protecting users costs a lot of money in the short term, but in the long run it will be a big win,” he said at the recent Crypto Market Trends and Future Opportunities conference organized by Malaysian crypto exchange MX Global.

Binance on March 1 invested an undisclosed amount in
MX Global
, which also received funding from Bursa Malaysia-listed tech company Cuscapi.

MX Global CEO
Fadzli Shah Anuar
 said that beyond equity investment, Binance would also be assisting the company through technology and talent transfer.

Anuar and Zhao – who both spoke in the same conference session – said that instead of competing, crypto exchanges should work together to spread awareness of crypto.

See also:
The tech mogul backing Binance’s Malaysia breakthrough

In July 2021, the Securities Commission Malaysia issued a cease and desist against Binance and Zhao for operating without a license, effectively barring the company from directly setting up shop in the country.

The firm was believed to be working on a collaboration with a local digital asset exchange operator at the time, but the deal did not materialize due to the ban.

Currency converted from Malaysian ringgit to US dollar: US$1 = 4.21 ringgit.


Malaysian ecommerce enabler partners with TikTok Shop

Malaysia-based
Momentum Commerce
, an ecommerce enabler, has been authorized as a TikTok Shop partner in the country.

Photo credit:
Ascannio / Shutterstock

This collaboration lets Momentum Commerce launch its brands – such as Eucerin, Nivea, Al-Ikhsan Sports, and Wardah – on the platform.

“We initially explored the potential of TikTok Shop by testing the waters with a select number of our brands and, as shopper interest snowballed quickly, we were able to garner significant gross merchandise value for our brands in a single livestream, over time strengthening their dominance in the market,” said
Hans-Peter Ressel
, co-founder and CEO of Momentum Commerce.

Since partnering with Momentum Commerce, Indonesian beauty brand Wardah has seen a 36x growth in its number of followers in 30 days due to its livestreaming and short video content. This has nudged Wardah’s sales conversion up to above 5%, the ecommerce enabler said in a statement.

See also:
Explaining TikTok’s ecommerce bet in Southeast Asia

Founded in 2019 by Ressel and Eddy Yap, Momentum Commerce provides its clients with a suite of solutions that include content creation, end-to-end livestreaming services, talent management, PR and brand partnerships, AI analytics, logistics, fulfillment, and store management. The firm also provides a production studio and team to its brands for creating short-form video content.

According to the company, social commerce is projected to grow over 45% year on year.


Microsoft, Malaysia gov’t team up to boost digital literacy

Microsoft and the Malaysian government have entered into a partnership to provide digital skills training to civil servants, reported
Digital News Asia
.

The tie-up will bring 80% of the government’s data storage to the cloud and 80% of its end-to-end service transactions online. It will also aim to have all civil servants become digitally literate.

Microsoft will be working with government agencies MyDigital Corp and the Malaysian Administrative Modernisation and Management Planning Unit (Mamput). The US company had earlier signed a cloud framework agreement with Mamput to invest in the country’s digital transformation.

Last year, Microsoft announced that it would be building its
first data center in Malaysia
 to cater to local customers in the public and private sectors.

The global tech giant also launched its
Microsoft for Startups Founders Hub
 program
in Asia
 earlier this year, offering up to US$300,000 in benefits and credits.

See also:
Malaysia bans Dickheads NFT


HK think tank’s edtech venture bags $1m in pre-seed round

Gift.ed,
 an edtech startup incorporated in Singapore, has bagged US$1 million in pre-seed funding from investment holding company
IMC Pan Asia Alliance
.

Janet Teo (CEO, GIFT.ed) and Chandran Nair (Global Institute For Tomorrow Founder and GIFT.ed Chairman) | Photo credit: GIFT.ed

The online education platform is a venture of Hong Kong-based think tank
Global Institute for Tomorrow
 (GIFT) and will be set for beta launch in the second quarter of 2023. It will incorporate the think tank’s existing publications and executive education curriculum, which is based on 15 years of leadership programs and workshops.

Gift.ed’s educational content will also be based on insights from GIFT’s projects in agribusiness, fintech, and healthcare, among others. To personalize corporate education, the platform will match the client’s organizational goals and interests with relevant content.

Gift.ed CEO
Janet Teo
 is leading the company’s operations out of GIFT’s regional office in Kuala Lumpur. The platform will be launched amid a growing corporate e-learning market, she said.

GIFT plans to tap its existing client pool to test the platform, with some already involved in platform design and course development.

See also:
 Why Southeast Asia’s edtech sector is in a class of its own


Funding Societies launches Shariah-compliant financing products

Funding Societies
, a digital financing company headquartered in Singapore, is launching new Shariah-compliant trade financing products for MSMEs in Malaysia.

The financing solutions are based on
Commodity Murabahah (Tawarruq)
, or the practice of buying commodities with deferred prices before selling to a third party.

Wong Kah Meng, co-founder and CEO of Funding Societies Malaysia / Photo Credit: Funding Societies

The zero-collateral financing is available for Malaysian MSMEs that have been operating for at least a year. Funding Societies offers a credit line of up to 1 million ringgit (US$228,000).

The Islamic fintech (iFinTech) solutions have no hidden fees and can be repaid through flexible options, the company website said. Businesses that are Shariah-compliant – or those that do not primarily work in the tobacco, liquor, or gambling sectors – can apply.

The fintech company partnered with
Masryef Advisory
 for guidance on Shariah principles.

These financing products are aimed at benefiting both Muslim and non-Muslim investors and will give underserved MSMEs more access to Islamic financing, says
Khairil Anuar Mohd Noor
, principal at Masryef Advisory.

See also:
Are Malaysia’s startup efforts finally paying off?

Currency converted from Malaysian Ringgit to US Dollar: US$1 = 4.39 ringgit


Malaysia-based Cradle Fund’s group CEO steps down

Cradle Fund
, an early-stage startup venture fund owned by the Malaysian government, announced that
Rafiza Ghazali
 will step down as group CEO with effect from May 31. Ghazali was leaving her role to pursue other opportunities, the firm said.

Photo credit: Cradle Fund

The board has appointed Norman Matthieu Vanhaecke, currently senior vice president of corporate services, as interim group CEO starting June, until a permanent replacement is found.

The company said that Ghazali helped Cradle develop into a startup ecosystem builder and become the coordinating agency for the
Malaysian Startup Ecosystem Roadmap
 during her tenure.

Cradle is Malaysia’s “early-stage startup influencer,” incorporated under the country’s ministry of finance to fund tech startups through its Cradle Investment Program. Currently administered by the Ministry of Science, Technology, and Innovation, Cradle has supported over 1,000 startups so far.

The firm recently launched its first
accelerator program
, coaching 36 startups on subjects such as funding and implementing business strategies.

See also:
These are the most active investors in Southeast Asia’s startups