FoundersHK was created to strengthen Hong Kong’s startup community, which has weathered more than two years of political turmoil, along with the COVID-19 pandemic. Today the non-profit, which started as an events and mentoring network, held the first demo day of FoundersHK Accelerate, its equity-free accelerator program, which was created to help prepare Hong Kong startups to raise funding and scale globally.

Eleven startups (a full list is below) representing diverse sectors—pet care, fintech, insurance and education, to name a few—pitched an audience of about 500 mentors and investors. They were chosen from a pool of 150 applicants by FoundersHK’s creators, including Alfred Chuang, co-founder of BEA Systems, which was acquired by Oracle for $8.5 billion in 2008, Edith Yeung, former 500 Startups general partner and Phil Chen, founder of HTC Vive. All three are also partners in Hong Kong-based venture firm Race Capital.

One of FounderHK’s goals is to restore hope to Hong Kong’s startup ecosystem. When asked what that means to her, Yeung said, “In 2019, I landed at the airport in Hong Kong, where thousands of young people were protesting. I was overcome with sadness and even took a photo so I wouldn’t forget how I felt about the turmoil there. As a person born and raised in Hong Kong, I couldn’t just stand by and do nothing. I realized mobilizing entrepreneurship and helping founders build their startups was the best way to contribute and help, so FounderHK was born to do just that.”

One of its goals is to help Hong Kong startups secure more funding. “A lot of active investors in Hong Kong don’t invest in local Hong Kong companies. The part that is very ironic is that all unicorns in Hong Kong raised money from overseas,” Yeung said.

FoundersHK connects startups with mentors, many of whom are from Hong Kong, and work at major venture firms and tech companies like Facebook, Microsoft, LinkedIn, Apple and Grab. It held its first event in 2019, before the pandemic hit, and has since continued hosting educational events online.

One reason why FoundersHK is equity-free is because it wants to focus first on creating a culture change. “Hong Kong is a very money-driven place, so when you say that none of this will be money-driven, people are shocked,” said Chuang. “One of the things we really want to fix first is the networking issue, because people learn from other people, but they are not connected and it’s very hard to learn.”

Even though Hong Kong founders might be reluctant to talk about their challenges at first, they are eager for the opportunity, he added. “After the first person has shared what their biggest problem is, everyone else shares, because they now know they all have common problems. That brings a lot of teams together and that’s a culture changing thing.”

Chuang says that hundreds of startups have gone through FoundersHK’s mentorship program. One reason it started its accelerator program was because many teams wanted more support before approaching investors. Bonnie Cheng, a former venture partner at 500 Startups, was recruited to run FoundersHK Accelerate. The program includes weekly check-ins with FounderHK’s leaders, and a mentorship network that includes people from Sequoia Capital, Goldman Sachs, Alibaba, Monks Hill and Matrix Partners.

“We’re finding a lot of Hong Kongers from everywhere who want to help support the community and check out these companies,” said Yeung.

The past few weeks were spent prepping startups for demo day, and making sure they don’t sell themselves short in pitches, another culture change FoundersHK wants to encourage. “Fundraising is a really big part of this accelerator, really the main thing is to teach them what they need to do, what attractions do they have and how to do pitch it,” Chuang said. “A lot of our work is connecting them with investors to pitch.”

Part of FoundersHK’s work is helping startups find partners in the right markets. Since Hong Kong is a small market, most startups begin thinking about international expansion from the start, including Southeast Asia, the United States and mainland China.

More than 100 investors from those markets attended FoundersHK Accelerate’s demo day.

“To get 100 investors from around the globe in front of a bunch of Hong Kong startups, that’s never happened before,” said Chuang. “This is a first and we’re hoping this will lead into future programs. Bonnie is a mastermind and our goal is to spiral these kind of events and do more and more.”

People from FoundersHK Accelerate’s leadership team and first batch of founders

Meet FoundersHK’s first batch:

Sleekflow is a B2B sales platform created specifically for social commerce companies. Most social commerce sellers rely on WhatsApp and other messaging apps to talk to customers and close sales. Since they don’t have a centralized hub, that means social commerce sellers need to do a lot of busywork, while missing out on valuable data that can boost conversion rates. Sleekflow is a SaaS selling platform for businesses that enables them to build customer flow automation (for example, sending offers if a shopping cart has been abandoned) and analytics to keep track of sales performance. It integrates with messaging apps, social media networks and CRM software like Salesforce. Sleekflow, which works primarily with mid-market and enterprise companies, plans to expand internationally by working with channel partners.

DimOrder is a “super app for restaurant management” that says it is now used by 5% of restaurants in Hong Kong. Co-founder Ben Wong comes from a family of restaurant owners and said he wanted to create a solution to reduce the amount of labor spent on operations, while increasing profit margins. DimOrder’s frontend includes ordering, delivery with integrated logistics providers throughout Hong Kong and marketing tools. On the back end, it can handle inventory purchasing, payment and analytics. DimOrder plans to add central kitchen and school lunch box ordering for 108 schools in Hong Kong next year to its frontend, along with working capital loans, inventory management and an HR system to its back end. It will expand to Southeast Asia next year.

Spaceship is a logistics platform focused on the fragmented cross-border courier, express and parcel services market. With more than 100,000 customers so far, Spaceship lets sellers compare providers, declare shipment content, chose time slots for shipments, make payments and track packages end-to-end. It also offers consumer services like logistics booking and relocation and moving services, and will launch other verticals, including a marketplace and travel planning. Spaceship plans to expand into Taiwan before entering other markets like Singapore, Thailand and Japan.

FindRecruiter is a bounty recruiting platform to help businesses find talent much more quickly than traditional recruiting methods. Co-founder Lawton Lai was a recruiter for a decade before launching the startup, and said it typically takes about 52 days to fill an opening. FindRecruiter can reduce that to about 17 days by working with more than 500 on-demand recruiters across six Asian countries who specialize in particular fields. The platform broadcasts job openings and matches employers with recruiters based on their sector, expertise and needs. FindRecruiter says its recruiters can earn 25% more in commissions and save 30 hours on cold-calling every month. Its clients include startup unicorns and bluechip companies.

PowerArena is a deep-learning analytics platform to help monitor manufacturing operations. It currently focuses on the electronics and automotive sectors, with clients like Wistron and Jabil. Even on manufacturing floors with many automated machines, more than 72% of the work is still done by people, says PowerArena’s founders. To use PowerArena, manufacturers install 1080p cameras and connect them to the platform for real-time analytics. For example, if there is a sudden slowdown in production, PowerArena can hone in on the cause, like maintenance being performed in one part of the factory.

WadaBento helps restaurants expand their operations and increase profit margins with automated vending machines in well-trafficked areas. It has sold 140,000 bento boxes in Hong Kong so far. Restaurants that want to expand usually have two costly options—opening new locations or delivery apps. WadaBento takes lunch boxes prepared by restaurants and puts them into their patented vending machines. Food is kept above 65 degrees during delivery and while they are in the machines, and hygiene is monitored through IoT devices. WadaBento has received patents in Japan, U.S. and China and recently signed a deal with Hong Kong’s largest fast food chain. It also recently shipped a machine to Japan, its first overseas market. It plans to deploy more than 200 machines by the first half of 2022.

Retykle wants to reduce fashion waste by making it easier to resell maternity and children’s wear. Co-founder Sarah Garner, who spent 10 years working at luxury fashion companies including LVMH, said kids on average outgrow 1,700 of clothing by the time they’re 18, but only about 5% of children’s clothing reaches the secondary market. Retykle’s goal is to keep as many items in circulation as possible. Retykle carries items for babies to mid-teens. All items are sold on consignment: sellers send clothing to Retykle, which then inspects each piece before listing it on the site. When an item sells, users get an email alert and cash or credit transfers. The company plans to launch in Singapore next month and in Australia in 2022.

Preface Coding is a tech education platform that provides scalable but customizable coding classes. Students can make on-demand bookings with teachers, and either meet with them virtually or at an offline location. The platform helps train teachers and most classes are 1:1. It serves a wide range of students, including kids aged 3 to 15, university students (especially Asian overseas students in the U.S. and Australia) and senior professionals in the financial, management and consulting industries. It’s also made partnerships with universities and banks, and plans to scale globally.

ZumVet is a pet care startup that offers video vet consultations, house visits and pharmacy deliveries, including medication and home-based diagnostic tests. Co-founder Athena Lee said ZumVet was created to help pet owners who don’t have a regular vet or live in areas where there aren’t a lot of veterinarian clinics. Vets perform consultations, create treatment plans and offer support remotely, or make house calls. Zumvet works with a network of independent vets and offers subscription plans to make pet care more affordable.

Big Bang Academy was created to address increasing demand for STEAM education and wants to make learning as “compelling as a movie, fun as a theme park and educational as a classroom” for kids. Its accredited curriculum includes videos and personalized lesson plans for each student. It also encourages a hands-on approach with experiment kits that are delivered to kids’ homes. The platform currently has 200 interactive sessions and a 70% course completion rate, a high number for an edtech platform. It business models include B2B, partnering with educational organizations, and B2C subscription models, and about 80% of its customer base is recurring. Big Bang Academy plans to diversify its content and create learning toys, too.

YAS Microinsurance is an insurtech startup with policies that can be activated in as little as five seconds, including coverage for running, biking or hiking accidents. It also recently signed its first partnership with Kowloon Motor Bus, one of the largest public bus companies in Hong Kong, to cover its passengers, including loss or theft or accidental medical expenses. YAS Microinsurance launched four months ago and says it now has $800,000 in committed revenue. About 6,300 policies were activated over the past couple of months, and it currently activates about 600 new policies per week.

The Philippines is one of the most disaster-prone countries in the world, with geography that makes it vulnerable to typhoons, floods, volcanos, earthquakes and droughts. While working in IT, Felix Ayque began compiling cyclone reports and sending them as email alerts to communities. His work evolved into environmental intelligence platform Komunidad, which collects data from government and private sources, and turns it into customizable analytics to help clients react quickly to potential disasters.

The Manila and Singapore-based startup announced it has raised $1 million in seed funding, led by Wavemaker Partners with participation from ADB Ventures, the Asian Development Bank’s venture arm, to expand in Asia and add features to its platform, including a self-serve version that is slated for release in January 2022.

Founded in 2019, Komunidad has clients in the Philippines, India, Cambodia and Vietnam, and serves multiple sectors, including utilities, agriculture, mining, education, local governments and business outsourcing centers. Before launching the startup, Ayque worked as an IT developer at several weather agencies, including the state-owned New Zealand MetService. He began creating cyclone reports on his own as a consultant after Typhoon Haiyan in 2013, also known as Super Typhoon Yolanda, which killed at least 6,300 people in the Philippines.

The reports were meant to help businesses respond more quickly to natural disasters. Typhoon Haiyan hit at a time when the business outsourcing sector was growing rapidly in the Philippines, with many foreign companies setting up multiple offices in the country. During a typhoon, businesses typically transfer workload to offices in areas that are not affected. Ayque’s first emails contained manual analysis of potential cyclones.

Demand for his reports grew as companies, including energy providers, needed to respond to climate change. Komunidad began earning enough revenue to expand and for Ayque to hire employees, including meteorologists, data scientists, software developers and business development teams based in India and Southeast Asia. Its new investment will be used to build a scalable platform.

Komunidad’s data sources include major players like The Weather Company, acquired by IBM in 2015, weather intelligence platform Tomorrow.io, and several smaller environmental and weather data providers.

An example of Komunidad dashboards, created for a project in Mandaluyong City, the Philippines

The platform turns data into dashboards relevant to their customers’ needs, like severe weather, solar, marine, soil moisture or air quality. “We act as a system integrator that only brings the relevant data and tells customers that this is the most important data,” said Ayque. Komunidad also enables its customers to build their own alert systems. For example, in the Philippines, many customers send alerts through Viber, one of the country’s most popular messaging apps, or SMS to reach areas with unstable internet connections.

For customers in the energy sector, Komunidad’s tools help them predict things like power usage based on temperature. It’s also been used by local governments to decide school cancellations. During the pandemic, Komunidad helped cities monitor people density so they can decide what areas need more crowd control.

One of Komunidad’s competitive advantages is understanding what data is important in different areas. For example, it recently closed a deal with the Assam State Disaster Management Agency (ASDMA) to focus on lighting and thunderstorm alerts, because Assam is the one of the most lightning-prone states in India.

“Every country has a different profile, and we understand that our approach has to really focus on community, and then extend to business,” Ayque said.

Since Komunidad’s customers have to react quickly, it creates easy-to-understand visualizations from raw data reports, which are often incomprehensible to people without technical backgrounds. For example, that might be a simple bar graph, warnings in green, yellow and red, or maps that turn red if a major weather or environmental event is expected to occur within the next six hours.

Part of Komunidad’s funding will be used to launch self-service customizable dashboards next year that will allow clients to drag-and-drop widgets, similar to creating a website in Wix or WordPress. The seed round will also help Komunidad take on new business opportunities in India, Thailand, Cambodia and other markets, grow its sales teams and pay for more data sources.

Australia’s competition watchdog is the latest to push for legal powers to curb Google’s dominance in the adtech sector.

It has made the call as it published its final report on an inquiry examining competition concerns in the digital advertising sector. In the report, the Australian Competition and Consumer Commission (ACCC) concludes that new regulatory solutions are needed to address Google’s dominance and competition to the adtech sector — “for the benefit of businesses and consumers”.

The tech giant’s grip on first party data is a particular focus in the report, with the regulator floating the idea of special measures being needed to tackle Google’s dominance — such as data separation powers or data access requirements.

“We have identified systemic competition concerns relating to conduct over many years and multiple adtech services, including conduct that harms rivals. Investigation and enforcement proceedings under general competition laws are not well suited to deal with these sorts of broad concerns, and can take too long if anti-competitive harm is to be prevented,” said ACCC chair Rod Sims in a statement.

“We are concerned that the lack of competition has likely led to higher adtech fees. An inefficient adtech industry means higher costs for both publishers and advertisers, which is likely to reduce the quality or quantity of online content and ultimately results in consumers paying more for advertised goods,” he added.

In a specific finding against Google, the ACCC found the tech giant has used its position to preference its own services (aka self-preferencing) and shield them from competition — with the watchdog giving the example of how Google prevents rival adtech services from accessing ads on YouTube (which it said gives Google’s adtech services an “important advantage”).

More generally, it found Google has a dominant position in key parts of the adtech supply chain — estimating that more than 90% of ad impressions traded via the adtech supply chain passed through at least one Google service last year. 

Google’s dominance is underpinned by multiple factors, per the ACCC’s analysis — including access to consumer and other data; access to exclusive inventory; and integration across its adtech services.

The report also highlights key acquisitions by Google — including of DoubleClick in 2007, AdMob in 2009, and YouTube in 2006 — which the regulator said had helped Google entrench its position in adtech.

The lack of transparency in the sector is another target, with the report highlighting opaque pricing and operation which it said compounds the complexity of the market, making it difficult for advertisers and publishers to understand how the supply chain is functioning and detect misconduct.

The UK’s competition watchdog highlighted similar concerns in its own adtech sector report last year. And UK lawmakers are now working on a digitally focused reform of domestic competition law.

As well as calling for new legal powers to curb Google’s dominance in the advertising sector, the ACCC recommends that the industry establishes standards — such as requiring providers to publish average fees and take rates to enable their customers to easily compare fees across different providers and services.

It also recommends an industry standard to enable “full and independent verification of the services advertisers use in the supply chain”. And it flags Google’s refusal to participate in the publisher-led ‘header bidding’ push — an industry initiative, developed around 2014/15, which tried to boost competition for publishers’ inventory but was stymied by lack of support from Google — highlighting that Google previously allowed its services to have a ‘last look’ opportunity to outbid rivals, in another critical observation.

“Google has used its vertically integrated position to operate its adtech services in a way that has, over time, led to a less competitive adtech industry. This conduct has helped Google to establish and entrench its dominant position in the ad tech supply chain,” said Sims.

“Google’s activities across the supply chain also mean that, in a single transaction, Google can act on behalf of both the advertiser (the buyer) and the publisher (the seller) and operate the ad exchange connecting these two parties. As the interests of these parties do not align, this creates conflicts of interest for Google which can harm both advertisers and publishers.”

Perhaps the really striking point here is that none of the ACCC’s findings feel especially new. Rather these are problems that regulators and lawmakers all over the world have been fixing on — and considering how best to fix.

The Australian watchdog’s report follows a major penalty levied again Mountain View in France this summer, for instance, in a case also relating to self-preferencing in the adtech sector.

France’s competition authority also extracted a number of commitments from Google on interoperability in the adtech market.

The ACCC is recommending that the government Down Under creates rules to manage conflicts of interest; prevent anti-competitive self-preferencing; and ensure rival ad tech providers “can compete on their merits” — also echoing many of the concerns European Union legislators have similarly identified in a set of proposed ex ante rules aimed at tech giants like Google (aka, so-called “gatekeeper” platforms).

And, as mentioned above, the UK is also planning to update competition rules to give regulators bespoke powers to tackle platform giants. While — in Germany — legislators have already updated competition rules to target digital giants, passing an update to the law at the start of this year which gives antitrust regulator powers to intervene again Internet giants by, for example, banning self-preferencing.

The ACCC notes that it’s considering specific allegations against Google under existing competition laws. But the report emphasizes that new regulatory mechanism are essential to tackle its dominance.

“We have identified systemic competition concerns relating to conduct over many years and multiple ad tech services, including conduct that harms rivals. Investigation and enforcement proceedings under general competition laws are not well suited to deal with these sorts of broad concerns, and can take too long if anti-competitive harm is to be prevented,” said Sims.

Simultaneously, Australia is also considering broader regulations for the digital sector — with a report on that due in a year’s time.

The ACCC said that report should also consider how to implement sector-specific rules for adtech — and whether they need to form part of a broader regulatory scheme to address “common competition and consumer concerns” the watchdog said it has identified in digital platform markets.

“Many of the concerns we identified in the adtech supply chain are similar to concerns in other digital platform markets, such as online search, social media and app marketplaces,” added Sims. “These markets are also dominated by one or two key providers, which benefit from vertical integration, leading to significant competition concerns. In many cases these are compounded by a lack of transparency.”

Consultation on that piece of work will kick off in the first quarter of 2022 — with the ACCC saying it will “take into account” overseas legislative proposals to deal with these issues.

The EU presented its plan for grappling with Big Tech in the Digital Markets Act proposal at the end of last year, along with a broader set of rules for digital platforms (the Digital Services Act) that aims to dial up accountability more generally across Internet services, targeting areas like illegal content or the sale of dangerous goods online.

While in Germany — which is pushing ahead of any pan-EU measures — the FCO has opened a raft of procedures against tech giants (including Amazon, Apple, Facebook and Google), looking at whether their market power is significant enough for their businesses to fall under scope of its new law. So the competition authority there could soon step in to curb market abuses.

Asia has also been taking an increasingly active stance against regulating tech giants. Earlier this month, for example, South Korea fined Google $177M for market abuse related to how it operates its smartphone operating system, Android. While, in China, the regime is turning its guns on all big tech — even homegrown companies.

And even on home turf, US tech giants — including Google and Facebook — are facing regulatory challenges on a number of fronts, including over how they operate app stores, and on issues like self-preferencing and predatory market consolidation.

The tl;dr is there is now a global consensus that big tech must be cut down to size. The only questions are over how that happens — see, for example, Australia already pushing ahead with legislation for a news media bargaining code that targets Facebook and Google — and how quickly digital markets can be rebooted.

Responding to the ACCC’s report, a Google spokesperson offered this statement:

“Google’s digital advertising technology services are delivering benefits for businesses and consumers — helping publishers fund their content, enabling small businesses to reach customers and grow, and protecting people online from bad ad practices.

Analysis by PwC Australia for Google Australia found that three quarters of Google’s adtech customers are Australian small and medium businesses — and three in four businesses surveyed observed important benefits from using Google’s services including cost savings, time savings and business growth, compared to other services.

PwC also estimated that the existence and use of Google’s advertising technology directly supports more than 15,000 full-time equivalent jobs and contributes $2.45 billion to the Australian economy annually.

As one of the many advertising technology providers in Australia, we will continue to work collaboratively with industry and regulators to support a healthy ads ecosystem.”

For many financial institutions in Southeast Asia, verifying new customers takes a week or two, said the founders of Verihubs. The startup cuts that time down to as little as five seconds, using AI-based identity authentication technology and APIs that let companies continue verifying returning customers through SMS, WhatsApp or flash calls.

Verihubs announced it has raised $2.8 million in seed funding for its goal of becoming “the one-stop for verification in Southeast Asia.” The round led by Insignia Venture Partners, with participation from CCV (Central Capital Ventura, the investment arm of Bank Central Asia, the largest privately-owned bank in Indonesia), and Armand Ventures. The round also include angel investors from notable Southeast Asian startups like Shipper co-founder Budi Handoko; Payfazz co-founders Jefriyanto and Ricky Winata; Gotrade co-founder Rohit Mulani; Bukuwarung founder Chinmay Chauhan; and Modalku ex-chief product officer Pramodh Rai.

The startup recently finished taking part in Y Combinator’s summer 2021 batch and says it is the first YC-backed AI startup from Indonesia.

Based in Jakarta, Verihubs was founded in 2019 by Rick Firnando, who has more than 9 years of experience in the B2B industry, and Williem Williem, an AI researcher who holds a PhD in computer vision from South Korea’s Inha University. The company currently has 46 customers, including major banks and fintechs, and the founders say it is on track to hit 100 customers soon. While most of its current clients are in the financial space, Verihubs technology can also be used for e-commerce, rental marketplaces and hospitality (one of its clients is a hotel that uses Verihubs for its check-in process).

Before adopting Verihubs, many of its clients were still verifying customers manually, said Firnando. Verihubs serves as an end-to-end verification solution, “because integrating with multiple vendors is painful for developers to do,” he added. That is why it enables clients to perform KYC (know your customer), offers phone number verification using WhatsApp or SMS and also verifies customers’ financial data.

When end users log onto an app that uses Verihubs for the first time, they are prompted to take a selfie and then upload a photo of a government-issued photo ID. Then Verihubs AI-based technology compares the two photos to see if they match, and also cross-references the ID with telecom credit scores and Indonesian government databases, including criminal records.

Verihubs serves two kinds of end users—those who have traditional bank accounts and “unbanked” people. The startup’s new investment from Central Capital Ventura will help it develop its services for users with bank accounts, since it will be able to partner with BCA to access their customers’ data. For unbanked users, Firnando said Verihubs is working closely with Payfazz, which lets customers deposit money with local agents to use for online payments, and BukuWarung, a bookkeeping app for SMEs, to access transaction data.

The startup’s product pipeline also includes building its own credit scores, based on data like transactions and account balances. Verihubs is currently focused on Indonesia, with plans to expand into other Southeast Asia markets eventually.

“For the ID verification system, we found that there is already a product-market fit in Indonesia, but we would like to expand into new products,” Firnando said. “We consolidate financial data from multiple sources, not only for banks, but also unbanked populations. And we’re also exploring expanding into new markets, like the Philippines and Vietnam.”

After working as an investment banker in Canada for a decade, Halima Iqbal moved back to Pakistan in 2017 and quickly realized how difficult it is for women to access financial services. “I had a really hard time opening up a basic bank account. It took me about three and a half months,” Iqbal told TechCrunch. She began researching how Pakistani women deal with money—for example, how do they save or take out credit? 

Then she met product designer and entrepreneur Farwah Tapal, who had recently returned to Pakistan from Spain, and the two created Oraan in 2018 to help women access financial services. The startup announced today it has raised $3 million in funding, co-led by returning investor Zayn Capital and Wavemaker Partners, with participation from Resolution Ventures, i2i Ventures, Hustle Fund, Haitou Global, Plug and Play and angels like Claire Diaz-Ortiz, a former investing partner at Magma Partners and early Twitter employee. 

Oraan has now raised just over $4 million in funding. Iqbal and Tapal said they are the first women entrepreneurs in Pakistan’s fintech space to raise a seed round. 

Oraan founders Farwah Tapal and Halima Iqbal

“There was an opportunity, how can we understand the saving space and informal economy in Pakistan, and where can we capture that?” Iqbal said. 

Oraan decided to start with ROSCAs (rotating credit and savings associations), or committees of people who contribute money to a pool that is distributed to a member each month. It will expand into more financial services, with plans to become a digital bank. 

Based on Oraan’s research, only about 7% of Pakistani women are financially included, meaning they have at least a basic bank account. For many women, trying to access financial services means facing logistical and social barriers.

“When a woman goes into a bank, the first question we get asked is ‘why do you even need bank account?,’ especially if you’re a freelancer or micro-entrepreneur or unemployed homemaker,” Iqbal said, adding that women are often asked to provide their husband or a male relative’s information so they can serve as a guarantor. “These kinds of restrictions have hindered women from having the kind of financial mobility that they require to be able to contribute equally to the economic growth of the country.” 

Traditionally, ROSCAs are formed within communities, for example among family members, friends or neighbors. Then each person puts in a set amount of money per month. Who gets each month’s pool of money is decided by the committee, sometimes by a vote or random draw. 

Iqbal and Tapal decided to start with ROSCAs because almost everyone they know had participated in an informal one. Based on Oraan’s research, about 41% of the Pakistani population has participated in a ROSCA and $5 billion gets rotated through them on an annual basis. 

“The scale of use and what it provided to the user was just so fascinating,” Iqbal said. “This is a goldmine to create something valuable for the end user, as well as a business opportunity.” 

Oraan formalizes ROSCAs, offering five-month or ten-month plans. One of the main differences between Oraan’s ROSCAs and informal ones is that users can pick which month they want the pool of money, because the app’s treasury management backend forms committees based on members’ needs and ability to pay. 

By participating in ROSCAs through Oraan, users also have the opportunity to join committees with people outside of their communities and social networks. Before accepting people onto Oraan, the app vets them, and it also manages each ROSCA, collecting and disbursing funds. 

“Generally in Pakistan, there is no concept of credit scoring and that’s why financial inclusion or access to liquidity becomes a problem,” Tapal said. Oraan partners with other providers to assess creditworthiness based on verified IDs, where users live, proof of income and personal references.

Some of the reasons Oraan’s users have participated in ROSCAs include financing their children’s education, paying for IVF treatments or leaving abusive relationships, Iqbal said. 

As people participate in committees in Oraan, they also build a payment history, which can open the door to other financial services in the future. The startup’s ultimate goal is become an online bank, said Iqbal. 

“We take this culturally, religiously, socially acceptable tool, which is committees, digitize them and bring women into a more formal space where they can open bank accounts,” said Iqbal. Other verticals Oraan plans to launch include savings, credit, insurance and educational financing, as well as investment products that will allow women to save money in mutual funds and other different asset classes. It also plans to build online communities for its users. 

“We want to become a full-fledged neobank and very heavily based on community because that’s where we see that women want a sense of belonging,” said Iqbal. “When it comes to financial transactions, that’s one of the things they feel they lack, that sense of belonging.” 

Aspire, the Singapore-based neobank that wants to become an “end-to-end financial operating system” for Southeast Asian businesses, is moving closer to its aspirations with a $158 million Series B. The round consisted of $58 million in equity and $100 million in debt, and was led by an undisclosed growth equity investor, with participation from DST Global Partners, CE Innovation Fund, B Capital Partners, and returning investors MassMutual Ventures, Picus Capital and AFG. The debt capital was provided by hedge fund Fasanara Capital.

The round also included angel investors from some notable fintech startups, like Wise co-founder Taavet Hinrikus; Qonto co-founders Alexandre Port and Steve Anavi; Uala founder Pierpaolo Barbieri; Xendit co-founder Moses Lo; Payfazz co-founder Hendra Kwik; Clara co-founder Gerry Colyer; and Varun Mittal, the global emerging markets fintech leader of EY.

Aspire was founded in 2018 to provide working capital loans for small- to medium-sized businesses, but at the beginning of this year, it began to take a multi-product strategy. Its portfolio of services now include bank accounts for cross-border businesses, corporate cards and automated invoice processing, all of which are connected to financial management software. The company also operates an incorporation service for Singaporean companies called Aspire Kickstart.

About 10,000 business accounts have been opened on Aspire, and in total they transact about $2 billion annually.

“What we’re trying to do is connect traditional banking services with software because we realize the biggest problem is that these two are completely disconnected,” co-founder and chief executive officer Andrea Baronchelli told TechCrunch. “So you have access to accounts, cards, but those are not powered by software. By putting them together, our vision is to move beyond the concept of digital banking and basically create an operating system where this banking product and software will co-exist.”

In addition to Singapore, Aspire also operates in Indonesia and Vietnam and is laying the groundwork, including regulatory, to expand into other Southeast Asian markets, though Baronchelli said it’s too early to announce what markets Aspire is focused on.

Based on the company’s product research and interviews with businesses, Baronchelli said that the average SME uses seven providers for their bank accounts, credit solutions, foreign exchange, invoice and payroll management and accounting. Aspire’s goal is to become a one-stop, end-to-end solutions for SMEs. Most of Aspire’s customers sign-up when they need their first business account or corporate card, and then start using its other products as they grow.

For larger SMEs that already have business accounts, Aspire tries to capture their attention with value-added products, like its expense management software or credit solutions.

Aspire’s working capital loans usually start at around $50,000 and can go up to $300,000, but can be customized as businesses grow. “We had to do that because we realized our segment is a moving target by definition,” Baronchelli said. “We cannot be extremely tied with amounts because our businesses and clients grow.”

The company’s plans to build an end-to-end ecosystem is how it differentiates from other fintechs that offer business accounts, like Volopay, Wise and Revolut. Aspire is currently working on building out its payroll system, because many of its clients have employees in different countries. It is also adding more features to its invoice management tool to make reconciling payments with account balances easier.

LG Electronics, the Korean tech giant that once was a leading player in mobile phones but is now winding down that business, is making an acquisition that points to its ambitions in another, emerging area: next-generation automotive hardware and services. Today the company announced that it will be snapping up Cybellum, an Israeli automotive cybersecurity specialist that detects and assesses vulnerabilities in connected vehicle services and hardware by way of a “digital twin” approach.

The deal is coming in several parts, LG said. Initially, it is taking a 64% stake in Cybellum for $140 million, and it will contribute a further $20 million in the form of a simple agreement for future equity (SAFE) note, “upon conclusion of the trading process in the fourth quarter.” The remaining shares will then be acquired the “near future” (no specified date), which is also when the final valuation and investment will be confirmed. As it stands now, if the valuation remains consistent, the deal in total will be worth some $240 million (market forces or the company’s own business funnel could impact this).

For LG, the company has been building a profile as an investor in interesting automotive startups, but this is its first acquisition out of Israel — Cybellum is based in Tel Aviv — and points to the bigger company’s interest not just in hardware but in providing software solutions to the automotive industry.

“It’s no secret the critical role software plays in the automotive industry and with it comes the need for effective cybersecurity solutions,” said Dr. Kim Jin-yong, president of the LG Electronics Vehicle component Solutions Company, in a statement. “This latest deal will further strengthen LG’s solid foundation in cybersecurity, enabling us to be even more prepared for the era of connected cars.” This is an area that LG has been eyeing up for a while.

This is a good return for Cybellum’s investors, which included Blumberg Capital, Target Global and RSBG Ventures (the venture arm of German industrial giant RAG). Cybellum had raised just over $14 million prior to this.

The company — which was founded in 2016 by Slava Bronfman and Michael Engstler, two cybersecurity alums from the Israeli Defense Forces — has over the years picked up a number of big-name customers using its technology, including Jaguar Land Rover and Nissan, with its partners including Harman, Toyota Tsusho, and PTC.

Bronfman told us in an emailed interview that the plan will be to continue working with all of these companies for the time being, and to continue operating as an independent entity.

Cybellum’s approach, and LG’s acquisition of it, underscore some significant trends in the world of connected cars, cybersecurity. Connected vehicles represent a new attack vector for malicious hackers, and a very complicated one, when you consider the multiple components that go into vehicles, and the numerous OEMs and automotive companies at work in the bigger ecosystem of the vehicle. One of the big challenges has been having a joined up approach to cybersecurity across all of that. LG, as an existing player in the market with ambitions to grow its market position, is making an investment both in its future business, and to address a wider services need in the market.

“This is first and foremost a security investment,” Bronfman said. “Cybellum is a cybersecurity company. As one of the leading automotive suppliers, LG is prioritizing cybersecurity as they understand that it’s an essential part of the current era of connected vehicles and the transition toward autonomous vehicles.”

Cybellum’s approach is to create a so-called “digital twin” of the system (an approach also taken in the world of enterprise IT) and to monitor this as a way of capturing the full picture to identify and assess threats.

LG interestingly is not currently a partner of Cybellum’s but Bronfman said that the first integrations between the two are likely to come out in 2022.

Once the darlings of Wall Street and venture capital as recently as the beginning of this year, China’s edtech firms are now wondering if they will be able to remain solvent long enough to see the beginning of the next.

In a series of sweeping regulations, the central government has taken a wrecking ball to an education and test-prep industry worth billions, the collective value of both the schedules and wallets of the country’s urban, middle-class families.

The most impactful policies were introduced in July, and they include a ban on any for-profit tutoring services focused on the country’s core public school curriculum, oriented around the make-or-break high school and university entrance exams. Limits were also set on the times during which students could attend classes, restricting class schedules to no later than 9pm on weekdays, and allowing only extracurricular courses on weekends.

The regulations have been catastrophic for leading Chinese edtech companies. The stock of New Oriental Education and Technology Group (NYSE: EDU) is down 86% on the year, while that of rival TAL Education Group (NYSE: TAL) has seen over 93% of its value wiped out since hitting its all-time peak as recently as February. As much as 50 to 80% of such firms’ revenue came from tutoring — activities that have now been banned. Their executives are faced with the unpleasant task of turning around billion-dollar Titanics before they sink.

Though July’s ban on for-profit tutoring has rightly received much of the attention, there has been a consistent deluge of policies meant to restructure what it means to receive an education in the world’s most populous nation. English education, once highly prioritized, is now taking a back seat in the state curriculum, and a ban on hiring online foreign teachers has left some of the country’s most popular edtech firms wondering how they will survive. In case parents and tutors try to circumvent the rules by working with one another directly, regulators have also outlawed private tutoring online, or at unregistered venues such as hotels, cafes, or private homes.

What we are seeing now is widespread scrambling for all involved: parents re-drafting their plans for their children’s educational futures, educators moving underground, and edtech entrepreneurs trying desperately to overhaul their firms’ business models before burning through their limited time and capital. The economic forces of supply and demand around education have changed little. The question now is how regulation is redirecting those forces.

Of the seemingly infinite number of idiomatic couplets in the Chinese language, there are few that more consistently apply to discussions of political economy than “上有政策，下有对策 (shàng yǒu zhèng cè , xià yǒu duì cè),” loosely translated as “the rulers make the rules, while their subjects find loopholes.” As recent regulations have turned the country’s education industry on its head, the question so many are asking now is how and where the loopholes can be found.

The competitive crisis for the children of China

Though crackdowns, repression, and regulatory overhauls are an ongoing theme throughout today’s China, much of the recent education policy can be understood through the lens of the country’s demographic crisis. In May, the release of 2020’s census data revealed a birth rate slowdown more severe than even many pessimists anticipated, prompting what appears to be a greater sense of urgency from officials to remove burdens on families and encourage a baby boom.

In an intensely competitive system in which not all children can succeed, and yet are expected to support their parents and often two sets of grandparents into old age, many families have grown to feel trapped, obligated to invest ever-increasing time and money just so their children can keep pace. As a Beijing-based mother surnamed Yi explained, “I am one of millions of parents who has spent so much money for extra training for my child, in the hope that it will help them be outstanding. But the result is that if everyone takes this training, it is not different than before, except that the family has greater financial burden, and the child suffers from greater stress … thus, I support the government’s decision to close these schools.”

China’s demographic crunch also presents the country’s leaders with a potential shortage in vocational and technical skilled labor, threatening the long-term viability of the world’s dominant manufacturing superpower. As education policymakers seek to ease pressure on parents and children fighting to get one of the precious few spots at the country’s elite universities, they also aim to increase the appeal of vocational training and careers through greater emphasis and reform of that oft-overlooked part of the education system.

Picking up the pieces after edtech’s collapse

With U.S.-listed edtech giants seeing their value evaporate overnight, the U.S. financial media has understandably focused its questions on the industry’s future. Yet the fates of such firms and their remaining employees still looks rosier than those of others.

For smaller players unable to access a liquidity lifeline to keep themselves afloat, bankruptcy has been the only option. That’s the case with China’s subsidiary of Wall Street English, the high-end language-training centers which were once mainstays of Beijing and Shanghai’s upscale shopping malls. Rocked by consecutive shockwaves from the COVID-19 outbreak and travel restrictions that have complicated the recruitment and retention of native English speakers, these new regulations have scared off both customers as well as investors who could provide rescue capital. In the aftermath, the company abruptly closed its doors.

Such a sudden closing can be particularly hard on employees, especially if bankruptcy is involved. In China’s white-collar industries, layoffs can actually be tantamount to a small windfall for an exiting employee due to the country’s labor laws. In most situations, an employee will receive a severance package equal to one month’s salary, plus a month’s salary for each year that the employee worked for the company. It is not uncommon for companies to offer even more generous packages in an attempt to shed staff expeditiously and with minimal conflict.

Yet when companies face sudden demises, both employees and customers alike are often left holding the bag. For one woman who worked in sales for Wall Street English for over a decade explained, “when the ship is sinking slowly, there are many lifeboats available. But sometimes the boat sinks too quickly to even get in a lifeboat.” In her case, she is hoping her tenure at the company may place her towards the front of the line for a modest payout as the company’s bankruptcy proceedings moves forward. However, she says she will consider herself lucky to even receive the back pay she is owed, as one U.S.-listed edtech firm is rumored to be paying out severance packages worth only 2,000RMB (or roughly $300).

For Western-based educators who had been teaching virtually, confusion seems to be a dominant theme. One British teacher (we’ll call him “Ed”) who had worked for Beijing-based online education startup Whales English, the end came in the form of a roughly three-week whirlwind of anxiety. One of a number of firms who hired freelance overseas teachers to deliver remote English classes to children in China, July’s regulations meant its was no longer legally compliant.

According to Ed’s account of events, the company was continuing to expand, advertise, and hire until July 28, when management announced that they would be suspending all hiring of new teachers. By August 7, teachers were informed that Whales English would be cancelling all new courses, yet those which had already begun and been paid for would be allowed to finish. Teachers were also encouraged to free up as much of their schedules as possible, as parents scrambled to use their pre-paid classes while they still could.

Around this time, Ed says, rumors began to circulate that the company had laid off as much as two thirds of its workforce at its Beijing headquarters, and parents and teachers began to organize contingency plans for circumventing Whales’ online platform, against the company’s wishes. On August 18, Ed and the rest of the teaching staff were informed that all classes were to be immediately suspended, in response to what Ed suspects were updated orders from authorities.

Though frustrated with the company’s inconsistent communication, Ed counts his blessings. He reports that he has received full and timely payment for his work, and has already moved on, having accepted a teaching position at a school in Japan.

In the 14,000-plus member Facebook group for teachers of VIPKid, one of China’s most well-known edtech companies, stories like Ed’s are commonplace. Yet for many teachers, the flexibility and regularity offered by Chinese edtech platforms are not easily replaced. As the pandemic has placed additional childcare pressure on parents, many with education and teaching backgrounds have used these platforms to make ends meet while being able to remain at home with their children and limit their exposure to the virus. Equivalent work may prove difficult to find.

That doesn’t mean teachers aren’t trying. Loopholes and inconsistent enforcement are creating a grey market for tutoring and other teaching services, not dissimilar to that of the illegal sex trade or undocumented migrant labor. Demand hasn’t changed, but regulations have forced large corporate entities to avoid direct involvement with such business. Due to this, the trade will move underground and thus workers (in this case, teachers) have little option other than to freelance without protection of the law.

Parents, the state, and the Chinese Dream

For parents, responses to the education crackdown have been driven along lines of wealth and class. Reports have already begun to circulate of in-home “nannies” with teaching skills and qualifications, paid as much as 30,000RMB (roughly $4,600) per month, so as to be officially compliant with regulations while still receiving similar after-school tutoring as before. As always, new loopholes are just waiting to be found.

For many of China’s wealthiest and most well-connected families, the new regulations change little of their plans for their children’s education. For several parents spoken to for this article, circumventing the Chinese education system has long been a primary objective. For some, this has been achievable through acceptance into one of China’s many international schools, whose international baccalaureate (IB) curriculum prepares students for attending university overseas while also avoiding the country’s grueling entrance exams.

For others, success and privilege have afforded them the opportunity to send their children to school abroad. In some cases, this has meant moving themselves and their wealth out as well. “For more and more parents, studying overseas seems to be the best, or only option,” explained a retired executive surnamed Gao, who now lives in the U.S., where her daughter also studies.

From the wealthiest elite to the middle class, there appears to be a shared theme: for parents who came of age during China’s historic economic miracle, both social and economic advancement were not just seen as possible, but expected in order to simply keep pace with one’s peers. And if advancement is expected, stagnation is failure. If stagnation is failure, moving backward is disastrous.

As economic growth slows, Chinese president Xi Jinping calls for “common prosperity,” and vocational and industrial training are emphasized over higher education, some parents are finding that their dreams are at odds with the country’s new strategy. “Despite the state’s broader goal, would it be okay with me if my daughter couldn’t receive higher education? I think the answer is no,” a Shanghai mother surnamed Li shared bluntly. “The mindset change will take time. Maybe it’s a bit selfish, but it’s true. I’m very supportive of education equality, but only if my kid is one of the lucky ones.”

For all the talk of money, what many parents worry about their children missing out on is something less tangible: “suzhi (素质),” a term loosely translated as “human quality,” encompassing ethics, ambition, education, and social class. For a Beijing teacher surnamed Guo, it is this element that he worries about for his daughter. “I know that society needs vocational workers, and that they can even make more money than those who attend university. But even if she makes less money, I will still want her to attend a university.” To him, the education his child receives and the future salary she will earn are secondary in importance to the social circles she develops. “[Vocational school students] have a reputation for being lazy, for smoking and drinking, and misbehaving. The friends she’ll make in school are friends she’ll have her whole life. I want her to have high-quality friends,” he said.

As China’s regulators overhaul not just education but many of the country’s most central institutions in an attempt to address its most daunting challenges, many are finding that the expectations which they once held must now radically change. Yet amidst all the uncertainty, what is unlikely to change is the drive and ingenuity to advance one’s self, family, and ambitions. After all, the authorities will always have their rules, and the people will always find their loopholes.

Evermos’ founding team (l to r): Arip Tirta, Ghufron Mustaqim, Iqbal Muslimin and Ilham Taufiq

Evermos is an Indonesian social commerce startup with two goals: to let people earn extra income by opening online stores without spending capital and to help small brands grow into household names. The company, which focuses on halal products and other items for Muslim customers, announced today it has raised a $30 million Series B, led by UOB Venture Management’s Asia Impact Investment Fund II. Other participants included IFC, MDI Ventures, Telkomsel Mitra Innovation (TMI) and Future Shape, along with returning investors Jungle Ventures and Shunwei Capital.

The funding will be use on hiring, enhancing Evermos’ recommendation engine and other AI-based tech, and entering new regions in Indonesia. The company says it currently has 100,000 active resellers in more than 500 Tier 2 and Tier 3 cities, mostly in Java. Its goal is to reach more than one million resellers throughout Indonesia over the next five years.

On the supply side, Evermos works with more than 500 brands, primarily small Indonesian businesses, and sells fashion, halal health and beauty products, and food and beverages. The company says its total transaction volume has increased by more than 60 times over the last two years.

Evermos was founded in November 2018 by Ghufron Mustaqim, Iqbal Muslimin, Ilham Taufiq and Arip Tirta. Mustaqim told TechCrunch that the team was motivated by its dissatisfaction with many retail practices in Indonesia. For example, this includes multiple layers of distribution that hike up prices and the proliferation of fake products online, which makes many people wary of buying from e-commerce marketplaces.

“We’re trying to solve these problems by innovating with the social commerce model, so resellers can help customers pick the right products in a more efficient way,” Mustaqim said.

Almost 90% of Indonesians are Muslim, so “when you say we target the Muslim market, we are targeting almost all of Indonesia,” he added. “We carefully curate the products onboarded to our platform, and one of the most important aspects is whether it’s relevant to the Muslim market. For example, it has to be halal, if it’s fashion it has be modest fashion.”

Evermos does not require resellers to buy inventory. Instead, resellers market items picked from Evermos’ catalog to their social circles, including family, friends and neighbors, through WhatsApp, Facebook and other apps. Resellers have an online landing page created on Evermos’ app and can send links about products to customers, but Mustaqim says most sales happen through chat.

Evermos handles inventory, logistics and customer support. Like many other social commerce startups in Indonesia, including Super, KitaBeli and ChiliBeli, Evermos focuses on smaller cities, where e-commerce penetration is lower because of factors like higher shipping costs. To keep shipping costs down, Evermos resellers often group their customers’ orders into batches. Products are usually sent to them from the brands’ own warehouses via third-party logistics providers, but Evermos is currently building inventory analytics and a network of warehouses to stock products closer to resellers.

Mustaqim says brands usually pay 30% commission on products sold through Evermos, and the company shares most of that with resellers. Evermos’ top resellers earn about $200 USD a month, or about the monthly minimum wage in most Indonesian provinces.

Since most of Evermos’ resellers are selling online for the first time, it provides in-app training modules (and occasional offline training events, too). This includes advice on curating inventory, how to use Evermos’ platform to make orders and use its promotional programs and product copywriting.

So far, Evermos has focused primarily on Java, but plans to expand into other regions of Indonesia. Its strategies for reaching one million resellers in five years include running ads and a program where resellers get one-time commissions for referring new sellers to the platform. Mustaqim says over-penetration won’t be a problem because resellers usually focus on a handful of product categories, so even people located in the same community won’t necessarily be competing with one another.

Business, now more than ever before, is going digital, and today a startup that’s building a vertically integrated solution to meet business banking needs is announcing a big round of funding to tap into the opportunity. Airwallex — which provides business banking services both directly to businesses themselves, as well as via a set of APIs that power other companies’ fintech products — has raised $200 million, a Series E round of funding that values the Australian startup at $4 billion.

Lone Pine Capital is leading the round, with new backers G Squared and Vetamer Capital Management, and previous backers 1835i Ventures (formerly ANZi), DST Global, Salesforce Ventures and Sequoia Capital China, also participating.

The funding brings the total raised by Airwallex — which has head offices in Hong Kong and Melbourne, Australia — to date to $700 million, including a $100 million injection that closed out its Series D just six months ago.

Airwallex will be using the funding both to continue investing in its product and technology, as well as to continue its geographical expansion and to focus on some larger business targets. The company has started to make some headway into Europe and the UK and that will be one big focus, along with the U.S.

The quick succession of funding, and that rising valuation, underscore Airwallex’s traction to date around what CEO and co-founder Jack Zhang describes as a vertically integrated strategy.

That involves two parts. First, Airwallex has built all the infrastructure for the business banking services that it provides directly to businesses with a focus on small and medium enterprise customers. Second, it has packaged up that infrastructure into a set of APIs that a variety of other companies use to provide financial services directly to their customers without needing to build those services themselves — the so-called “embedded finance” approach.

“We want to own the whole ecosystem,” Zhang said to me. “We want to be like the Apple of business finance.”

That seems to be working out so far for Airwallex. Revenues were up almost 150% for the first half of 2021 compared to a year before, with the company processing more than US$20 billion for a global client portfolio that has quadrupled in size. In addition to tens of thousands of SMEs, it also, via APIs, powers financial services for other companies like GOAT, Papaya Global and Stake.

Airwallex got its start like many of the strongest startups do: it was built to solve a problem that the founders encountered themselves. In the case of Airwallex, Zhang tells me he had actually been working on a previous start-up idea. He wanted to build the “Blue Bottle Coffee” of Asia out of Hong Kong, and it involved buying and importing a lot of different materials, packaging and of course coffee from all around the world.

“We found that making payments as a small business was slow and expensive,” he said, since it involved banks in different countries and different banking systems, manual efforts to transfer money between them and many days to clear the payments. “But that was also my background — payments and trading — and so I decided that it was a much more fascinating problem for me to work on and resolve.”

Eventually one of his co-founders in the coffee effort came along, with the four co-founders of Airwallex ultimately including Zhang, along with Xijing Dai, Lucy Liu and Max Li.

It was 2014, and Airwallex got attention from VCs early on in part for being in the right place at the right time. A wave of startups building financial services for SMBs were definitely gaining ground in North America and Europe, filling a long-neglected hole in the technology universe, but there was almost nothing of the sort in the Asia Pacific region, and in those earlier days solutions were highly regionalized.

From there it was a no-brainer that starting with cross-border payments, the first thing Airwallex tackled, would soon grow into a wider suite of banking services involving payments and other cross-border banking services.

“In last 6 years, we’ve built more than 50 bank integrations and now offer payments 95 countries payments through a partner network,” he added, with 43 of those offering real-time transactions. From that, it moved on the bank accounts and “other primitive stuff” with card issuance and more, he said, eventually building an end-to-end payment stack. 

Airwallex has tens of thousands of customers using its financial services directly, and they make up about 40% of its revenues today. The rest is the interesting turn the company decided to take to expand its business.

Airwallex had built all of its technology from the ground up itself, and it found that — given the wave of new companies looking for more ways to engage customers and become their one-stop shop — there was an opportunity to package that tech up in a set of APIs and sell that on to a different set of customers, those who also provided services for small businesses. That part of the business now accounts for 60% of Airwallex’s business, Zhang said, and is growing faster in terms of revenues. (The SMB business is growing faster in terms of customers, he said.)

A lot of embedded finance startups that base their business around building tech to power other businesses tend to stay arm’s length from offering financial services directly to consumers. The explanation I have heard is that they do not wish to compete against their customers. Zhang said that Airwallex takes a different approach, by being selective about the customers they partner with, so that the financial services they offer would never be the kind that would not be in direct competition. The GOAT marketplace for sneakers, or Papaya Global’s HR platform are classic examples of this.

However, as Airwallex continues to grow, you can’t help but wonder whether one of those partners might like to gobble up all of Airwallex and take on some of that service provision role itself. In that context, it’s very interesting to see Salesforce Ventures returning to invest even more in the company in this round, given how widely the company has expanded from its early roots in software for salespeople into a massive platform providing a huge range of cloud services to help people run their businesses.

For now, it’s been the combination of its unique roots in Asia Pacific, plus its vertical approach of building its tech from the ground up, plus its retail acumen that has impressed investors and may well see Airwallex stay independent and grow for some time to come.

“Airwallex has a clear competitive advantage in the digital payments market,” said David Craver, MD at Lone Pine Capital, in a statement. “Its unique Asia-Pacific roots, coupled with its innovative infrastructure, products and services, speak volumes about the business’ global growth opportunities and its impressive expansion in the competitive payment providers space. We are excited to invest in Airwallex at this dynamic time, and look forward to helping drive the company’s expansion and success worldwide.”

The used car market is getting another major infusion of venture capital today, with one of the faster scaling startups out of India picking up a major round of financing to double down on growth: Cars24 — a site and app that sells users cars and used two-wheeled motorbikes — has raised $450 million, a Series F of $340 million and $110 million in debt. The investment values Cars24 at $1.84 billion post-money, the company said, making it one of the more valuable privately-held used car startups globally.

DST Global, Falcon Edge and SoftBank Vision Fund 2 co-led the Series F, with Tencent and existing investors Moore Strategic Ventures and Exor Seeds also participating. The debt round came from a mix of financial institutions. This fundraise, now confirmed and official, was rumored in past weeks, although at a smaller amount: it didn’t include the debt portion, and some reports were based on regulatory filings for less than the sum ultimately raised.

Vikram Chopra, the CEO who co-founded the company in Gurugram with Mehul Agrawal, Ruchit Agarwal and Gajendra Jangid, said that the plan will be to use the funds across a range of areas.

They include national and international expansion (it’s already operating in India, Australia and UAE, and has its eyes on more markets); technology (specifically areas like further expanding its virtual appraisal process, as well as more data science around pricing and other details related to sales and after-sales); and financing both to buy in vehicles, as well as to help consumers make purchasing a vehicle a viable economic option.

Cars24 is active in 130 cities in India, and it has sold 400,000 vehicles to date (both cars and motorbikes) with upwards of 13 million monthly visitors on its site. All this gives it claim to being the largest platform of its kind in India. But its ambition is to improve the inefficiencies of selling a car, or buying a used car, in many parts of the globe, not just its home market.

“Buying or selling a car is hard anywhere in the world,” Chopra said in an interview. “It’s just a broken experience everywhere, so we are trying to solve for this.”

This is also where the financing and technology figure significantly. When Cars24 first started out in 2015 in India, Chopra said, it faced the added issue (or opportunity?) of a tricky economic landscape with very low car ownership penetration overall — just 2%, or 2 cars per 100 people, compared to typically between 50 and 80 cars per 100 people in Europe.

“But buying a used car in India is a way for a person to own any car,” Chopra said. In a country like India, “we want to take the penetration to 10 or 15.” He added that the car resale market today in India is around $25 billion, but is on track to soon get to $100 billion.

Cars24 has been built around a “buying-in, fixing up, and then reselling” model similar to that of the real-estate juggernaut Opendoor: it appraises vehicles from individuals looking to sell them; buys them up if an agreed price can be reached; reconditions them; and then re-sells and delivers them to new owners. This model, Chopra said, gives Cars24 an edge over some of the shortcomings that exist with traditional players (both on and offline).

First, it provides a centralized platform, cars24.com and its corresponding app, where users can browse a one-stop-shop inventory that goes beyond their local areas (and local dealers). That inventory is curated and made discoverable using a number of algorithms, and pricing is also determined by Cars24’s technology.

“CARS24 is building a data-enabled tech platform that is organizing the fragmented used car market in India,” said Munish Varma, managing partner, SoftBank Investment Advisers, in a statement. “We have been closely tracking its approach and efforts that have disrupted the used car retailing in India.”

“We believe CARS24 is enhancing the customer experience in the used car industry with its sharp focus on technology,” said Sumer Juneja, partner, SoftBank Investment Advisers, in a statement. “We will continue to support this growth given our expertise in e-commerce businesses across markets”.

Second, when consumers do make a purchase, they can keep and try out a vehicle for up to seven days “and return it if you don’t like it.”

This, Chopra continued, is in contrast to other used-car sales sites, as well as physical dealers: either they don’t offer trial runs, or (in the case of physical dealers or individual offline sellers), they might give a driver 10 or 15 minutes tops, with someone attending you as you drive the vehicle around: not a great way to discover what you like or don’t like about a vehicle.

It’s also a model that investors believe will give Cars24 an edge over competitors.

“We have studied used car platforms globally and are struck by the similarities we see between CARS24 and analogous businesses that have scaled successfully,” said Navroz D. Udwadia, co-founder of Falcon Edge Capital, in a statement. “CARS24 has cemented its first-mover advantage by building wide-ranging supply side moats, which in turn drive demand liquidity on the platform. In positioning itself as a buying and selling solution for consumers, CARS24 drives immense top-of-mind recall. It is rare to find a business as focused on the consumer experience and as driven to ensure it is outstanding via the use of data science and technology. Finally, we are deeply impressed by the founders’ leadership, and are thrilled to back them as they transform the used car industry in India and scale internationally across MENA and SE Asia.”

A used-vehicle marketplace raising a huge amount of money is somewhat ironic given some of the bigger trends in the world of transportation.

Some have theorized that a wave of factors — they include the rise of ubiquitous e-hailing apps like Uber; on-demand car-sharing services like Getaround or Zipcar; a push in urban centers encouraging people to use a wider array of transportation options to offset traffic; and bigger environmental trends that are leading some to eschew gas guzzling autos — would push the world away from car ownership. Yet essentially, Cars24 (and others like it) are extending the life of a lot of older models to keep more vehicles in circulation and private hands.

But using Uber can get pricey and is not the same as having your own wheels, and the desire to have your own vehicle is perhaps at a high-point right now because of Covid-19 and people concerned about spreading or catching the virus, Chopra said.

“It’s definitely not the case in India that less people want to own cars,” he said. “During the pandemic, we have seen a lot of demand, in India specifically.” On new, greener vehicle technology, this is also interesting and will simply present another class of vehicles on Cars24 as adoption of electric vehicles increases, he added. But it’s not all quite there, yet.

The strength of the current opportunity is partly why it seems that we’ve found ourselves crowded with startups and scale-ups hoping to define the new generation of used-car-sale platforms.

Others in the same space that have recently raised money include close competitors like Spinny, also out of India; Cazoo in the UK, which has now gone public; InstaCarro out of Brazil; Kavak out of Mexico; and Carsome from Malaysia, among many others. Carvana, one of the biggest used-car platforms, is also publicly listed and is now valued at nearly $28 billion.

What has been interesting is that each of these big players have up to now carved out very strong markets for themselves in their home countries, and they are only more recently moving to expand internationally. Cars24 has attracted hundreds of millions of dollars in funding (it also raised $200 million less than a year ago) in part because its investors think it has what it takes to export, and thus scale, its model beyond the huge market of India.

“CARS24 is at the forefront of transforming the way consumers buy and sell cars by providing a unique end-to-end digital shopping and transaction experience,” said Rahul Mehta, managing partner at DST Global, in a statement. “They have emerged as the undisputed leader in the used car space in India and early traction in international markets is exceeding expectations. We love backing founders who are bold and ambitious thinkers and couldn’t be more excited to enter the second innings of our long-lasting partnership with CARS24.”

One of Gogoro’s battery swapping station

Gogoro is going public. The company, which is best known for its electric Smartscooters and swappable battery infrastructure, announced today it will list on Nasdaq through a merger with Poema Global, a SPAC affiliated with Princeville Capital. The deal sets Gogoro’s enterprise valuation at $2.35 billion and is targeted to close in the first quarter of 2022. The combined company will be known as Gogoro Inc and trade under the symbol GGR.

Assuming no redemptions, Gogoro anticipates making $550 million in proceeds, including an oversubscribed PIPE (private investment in public equity) of over $250 million and $345 million held in trust by Poema Global. Investors in the PIPE include strategic partners like Hon Hai (Foxconn) Technology Group and GoTo, the Indonesian tech giant created through the merger of Gojek and Tokopedia, and new and existing investors like Generation Investment Management, Taiwan’s National Development Fund, Temasek and Dr. Samuel Yin of Ruentex Group, Gogoro’s founding investor.

The capital will be used on Gogoro’s expansion in China, India and Southeast Asia and further development of its tech ecosystem.

Founded ten years ago in Taiwan, Gogoro’s technology includes smart swappable batteries and their charging infrastructure, cloud software that monitors the condition and performance of vehicles and batteries. Apart from its own brands, including Smartscooters and Eeyo electric bikes, Gogoro also makes its platform available through its Powered by Gogoro Network (PBGN), which enables partners to create vehicles that use Gogoro’s batteries and swapping stations.

Gogoro’s SPAC deal comes a few months after it announced major partnerships in China and India. In China, it is working with Yadea and DCJ to build a battery-swapping network, and in India, Hero MotoCorp, one of the world’s largest two-wheel vehicle makers, will launch scooters based on Gogoro’s tech. It also has deals with manufacturers like Yamaha, Suzuki, AeonMotor, PGO and CMC eMOVING.

With these partnerships in place, “we really now need to take our company to the next level,” founder and chief executive officer Horace Luke told TechCrunch. Gogoro decided to go the SPAC route because “you can talk a lot deeper about what the business opportunity is, what the structure, what the partnerships are, so you can properly value a company rather than a quick roadshow. Given our business plans, it gives us a great opportunity to focus on the expansion,” he said.

One of the reasons Gogoro decided to work with Poema is because “their thesis is quite aligned with ours,” said Bruce Aitken, Gogoro’s chief financial officer. “They have, for example, a sustainability fund, so our passion for green and sustainability merges well with that.”

Gogoro says that in less than five years, it has accumulated more than $1 billion in revenue and more than 400,000 subscribers for its battery swapping infrastructure. The company will launch its China pilot program in Hangzhou in the fourth-quarter of this year, followed by about six more cities next year. In India, Hero MotoCorp is currently developing its first Gogoro-powered vehicle and will begin deploying its battery-swapping infrastructure in New Delhi in 2022.

“We see the demand in China as a lot bigger than we first anticipated, so that’s all good news for us, and that’s one of the fundamental reasons why we need to go public’s because we need to raise the capital and resources needed for us to actually contribute in a big way to these markets,” said Luke.

When asked if Gogoro is planning to strike a similar partnership with GoTo to expand into Southeast Asia, Luke said the “important thing is to recognize that Southeast Asia is the third-largest market outside of China and India for two-wheelers. Gogoro has always had the vision to go after these big markets. GoTo, being a great success in Indonesia, their investment in Gogoro will start conversations, but there isn’t anything to announce at this point other than that they’re joining the PIPE.”

In a press statement, Poema Global CEO Homer Sun said, “We believe the technology differentiation Gogoro has developed in combination with the world-class partnerships it has forged will drive significant growth opportunities in the two largest two-wheeler markets in the world. We are committed with working alongside Gogoro’s outstanding management team to support its geographic expansion plans and its transition to a Nasdaq-listed company.”