Island Fintech Weekly (5 September)

Sep 05, 2021

Greetings Islanders,

As you may know, I’ve been away for a while! I had national service obligations in Singapore, as well as some life ones. A lot of exciting things coming up for IFW, including a guest writer! Anyway, I hope you haven’t missed me too much 👋🏽

The term ‘first mover advantage’ was a popular one to describe how entrants in a space were able to ride an initial wave of change. The term ‘last mover advantage’ was popularised by Peter Thiel, but I saw it recently being used by Jungle Ventures to describe the opportunity in SEA - where companies have the benefit of learning from the successes and failures of their peers in the U.S., China and India. One of the many advantages of operating in SEA 🌏

Also, I am going to curate a collection of Island Fintech appropriate pictures to accompany every post now, to add some colour to this fairly B&W newsletter. Here goes the first one!

Note: Want to get in touch with me about content, angel investing or anything to do with Wise? Reach out to me at vinay.palathinkal@gmail.com or connect via LinkedIn.

🎣 Dips

Singapore startups raised $5.3b in the first half of 2021, up from $3.4b in 2020. Recent Singapore unicorns like Carro, Nium and Patsnap are among the drivers of this 60% growth in the country.
The Central Banks of Indonesia and Thailand have introduced a cross border payments linkage initiative. It is fairly niche - focused on merchant payments for residents of one country who would like to buy goods or services from the other, doing the linkage with a QR code. The catch is that it involves banks setting the FX rate and marking up a spread.
Hong Kong-based brokerage platform, Futu Holdings reported that total client assets hit $64.8b at the close of Q2 - more than triple last year’s figures. Futu operates under a custodial scheme and provides access to US securities amongst others, and has relied on sign-up incentives to grow traction - I am interested to see how it may build its existing base with more sustainable initiatives.
Singapore’s stock exchange, SGX, is looking to clear the path for SPACs in the country. Special Purpose Acquisition Vehicles have been a popular model for companies to indirectly list on exchanges, and Asian exchanges have typically not held favourable ground for SPACs to grow. Among some of the modifications promised by MAS, the minimum $223.2m market value proposal for SPACs may be relaxed - simplification of such regulation can be a great step forward for fintechs and indeed, other fast growing companies in the region who often see Singapore as a stable base to grow from.
Ayoconnect, an Indonesian open finance platform, has raised a total of $15m in its Series B round, following successful deals with banks like Bank BRI, Bank Mandiri, as well as wallets and platforms like DANA, Indomaret, Bukalapak, Home Credit and Pegadaian. The news is encouraging as we’re seeing more actual deals being done with banks, fintechs and lenders in the region who are accepting alternative data models for providing underwriting for loans in Indonesia. As Ayoconnect mentions, this movement is a step forward towards the 90% population financial access target set by the Indonesian government, and for financial inclusion on the whole.
Not exactly SEA, but interesting… Paidy is a new Japanese unicorn in the BNPL space. If you don’t know what BNPL is, pray tell, which rock have you been living under? Buy Now Pay Later is probably the hottest thing in fintech right now and the valuations reflect this. Paidy was born out of the challenges in acquiring credit in Japan, a tricky place for foreigners especially to get access, a firsthand problem for their founder, Russell Cummer. It’s notable that Cummer was also able to be cognisant of the Japanese preference to cash as a payment method, and also decouple Japanese payment regulation to build out a compliant solution. As we keep seeing, simplification + awareness + product compliance = win!

🐋 Dives

The ‘Grab effect’ is inspiring a new generation of Asian entrepreneurs (Fortune)
Better on the Cloud: Financial Services in Asia Pacific 2021 Report (Google)
God, Money, YOLO: How Cathie Wood Found Her Flock (New York Times)
Does decentralized finance really help the underbanked? (American Banker)

🍹 Twitticisms

(P.S. Again, if anyone has SEA or Asia focused fintech Twitter accounts I should be following, tweet me. The accounts I see on my feed are overwhelmingly 🇺🇸 focused)