Wealthtech Endowus' $35MM round; Fasset exchange's 1 million user super app launch

Hi Fintech Futurists — 

Before we jump into this week's agenda, here is a quick reminder about our second Office Hours session:

🎙️ Topic: Startup Stories that Work Now

📅 Date: August 17th • 11am ET

⭐ Guest: Sarah Hinkfuss, Partner, Bain Capital Ventures

In this non-recorded session, Sarah will share key strategies to capture investor attention and ensure your startup's continued success in this increasingly competitive landscape.

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You’re the best, today’s agenda below.

1. WEALTHTECH: Singapore wealth management platform Endowus raises $35M
2. INVESTING: Fasset Launches “Super App,” Reports 1 Million Sign Ups in First Week
3. LONG TAKE: The trend behind PayPal's new Paxos stablecoin and acquisition of FundsDLT by $15T AUC Deutsche Börse (link here)
4. PODCAST CONVERSATION: How to be a great fintech venture capital investor, with Vintage Investment Partners General Partner Asaf Horesh (link here)
5. CURATED UPDATES

Digital Investment & Banking Short Takes

WEALTHTECH: Singapore wealth management platform Endowus raises $35M

Singapore wealthtech Endowus has raised $35MM in Series C funding, building on its Series A and B in June 2021 and February 2022 to bring total funding to $95MM. The round includes new investors Citi Ventures and MUFG Innovation Partners, in addition to existing investors, which includes UBS Next, Lightspeed Venture Partners, and Prosus Ventures. A strong effort considering that fintech funding is down 49% year over year in the first half of 2023. 

Endowus provides a platform for commission-free asset management and digital wealth advisory, solely within Hong Kong and Singapore. Instead of taking the robo-advisory route, Endowus relies on fund managers to create institutional-share class funds for retail investors. All revenues are from advisory fees, with all trailer commission fees rebated through cashbacks. This is the first fintech in Hong Kong or Singapore to rebate trailer comissions.

Endowus' AUM is over $5B, in addition to $40MM in savings, across 100K clients across both markets. Its pension assets platform alone accounts for SGD$1B (equivalent to $740MM), enabling Endowus to provide full coverage of service across the financial lives of its user base. Last year the company experienced 80% in organic revenue growth and tripled its group revenue, largely as a result of acquiring Carret Private, a multi-family office. At 90 basis points in fees, the company would generate about $45MM in revenue, and likely trades at a 3-8x valuation.

Endowus’ primary differentiator from other investment app competitors in the region, like Syfe and Stashaway, is that it serves both private wealth and public pensions through its digital advisory work for Singapore's Central Provident Fund investment scheme (CPF). Specifically for CPF, Endowus built its tech stack in-house to fully automate the digital process for investors and plans to do the same for Hong Kong's Mandatory Provident Fund. Additionally, Endowus has been launching new services like low-cost passive index funds and private wealth services for high-net-worth individuals. 

The opportunity for wealthtech players in the Asia-Pacific region is large. The region currently accounts for 40% ($218T) of global wealth. Endowus is already one of the largest players in the region and is well positioned given its focus on government funds and on advisory-driven services for retail clients. While roboadvisors have captured market share within their niche, this is a reminder that many clients — especially those with complex situations — still favor a human touch. 

👑Related Coverage 👑

Podcast Conversation: Altruist CEO Jason Wenk on WealthTech, financial planning, advice, and generally improving financial health

👉 Read full story

INVESTING: Fasset Launches “Super App,” Reports 1 Million Sign Ups in First Week

Fasset, a Dubai-based digital asset exchange for emerging markets, launched a super app and reportedly saw 1 million sign-ups in its first week, indicative of a broader trend in emerging markets where digital assets are experiencing greater adoption. Founded in 2019, the firm has raised around $27MM to date, backed by Fatima Gobi Ventures and Liberty City Ventures. 

For context, the Middle East is witnessing some of the fastest growth in crypto markets, taking up a 9.2% share of global transactions in the period from 2021 to 2022. This is likely a result of improved clarity on digital asset regulation in geographies like the UAE and the regulatory arbitrage firms are using to their advantage due to the lack of digital asset clarity across North America. Recall, exchanges like Binance and ByBit have ceased operations in Canada.

Fasset currently offers crypto trading of assets like Bitcoin, Ethereum, stablecoins, and gold. Beyond that, they plan to offer fractional shares and access to tokenized real estate, along with traditional fintech services such as remittance, lending, and borrowing. Real world assets are having a resurgence, and we can understand the appeal of offering so many products given that the guardrails to investing in emerging markets are coming down.

However, from an execution standpoint there will be challenges. Competition is heating up in the Gulf region — in the UAE alone, there has been a 400% growth in the number of registered crypto businesses between 2020 and 2022, leading to a surge in global digital asset trading. Additionally, players like Binance and Rain are already established in the region and have a dominant market presence. 

A challenging situation for fintechs and other digital asset providers in the region is the lack of disposable income among UAE citizens. According to a 2021 survey, 45% of residents have not started saving for retirement and 42% of those with at least $100,000 in investable assets said retirement won’t be an option. 

On the other hand, 60% of the UAE’s Gen Z population already uses digital/mobile wallets, which demonstrates a readiness for digital wealth and digital finance in the region. Additionally, Fasset is also focusing on less saturated markets like Indonesia, Pakistan and Turkey, where crypto meets remittance demands and acts as a hedge against local currency inflation, particularly with regard to stablecoins. Many of the 1 million sign-ups have come from these geographies.

With much of the world subject to rampant inflation, volatile domestic markets currencies, and capital-controlled environments, the traditional route to asset ownership is challenging. Perhaps tokenized and digital solutions like these take a meaningful share in the years to come — as long as they can maintain operations under local regulation.

👑Related Coverage 👑

DeFi: Court rules against SEC, tokens are distinct from investment contracts about them; Aave's GHO stablecoin gets only $4MM post launch

👉 Read full story

Blueprint Deep Dives

LONG TAKE: The trend behind PayPal's new Paxos stablecoin and acquisition of FundsDLT by $15T AUC Deutsche Börse

Technology often advances faster than we recognize, with minor inconveniences masking groundbreaking progress.

A Bank of America report highlighted a potential $16 trillion market in asset tokenization, pointing towards a digital finance future. PayPal's new USD stablecoin suggests a transformative shift in payment methods, potentially bypassing traditional payment giants. Deutsche Börse's acquisition of FundsDLT hints at a future where large asset classes are integrated onto digital blockchains. Such developments in fintech may be gradual, but they signal profound changes in the financial landscape.

Podcast Conversation: How to be a great fintech venture capital investor, with Vintage Investment Partners General Partner Asaf Horesh

In this conversation, we chat with Asaf Horesh - General Partner at Vintage Investment Partners.

Asaf specializes in Fintech, Crypto, Cloud/SaaS investments in Israel, EU and the US. Some of his notable deals include Wolt, Mirakl, Bluevine, Alooma and Datarails. Prior to Vintage, he was a Principal at Greylock IL (now 83North) where he worked on enterprise software and consumer deals across Israel and Europe. Before Greylock he was a consultant at BCG and an engineer at Elbit Systems.

👉 Listen to Podcast

Upcoming Webinar: Maximizing the Value of Your Customers: Better Data = Better Results

In this digital event, Al Periu, Bridget Hussain, Chris Martin, Kathy Stares, and Peter Renton will explore how the right data is key for lenders to generate revenue growth and maximize the value of both prospects and current customers.

Join us August 15 at 2:00PM ET.

👉 Register Now

Curated Updates

Here are the rest of the updates hitting our radar.

Neobanks

• ⭐ US fintech Greenlight launches credit builder tool for teenagers - Fintech Futures
• Entities Managed by Imran Khan to Acquire 2.5% Stake in Dave via Secondary Market Transaction - Dave
• ⭐ Mexican neobank albo acquires delt.ai for $20 million - Finextra

Payments

• ⭐ Amazon joins fintech fray in Brazil with debut credit card - Fintech Nexus
• ⭐ Ant Financial sells Paytm stake worth $628M to Vijay Shekhar Sharma in no-cash deal - TechCrunch

Digital Investing

• ⭐ Singapore central bank pledges $150 million to support new fintech projects - Finextra
• European fintech players are bracing for market consolidation - TNW

Lending

• ⭐ Castlelake, Neuberger Berman to Buy $700 Million of Loans from Fintech Oportun - Bloomberg
• ⭐ Sachin Bansal sells Navi’s microfinancing unit for $178.5 million - TechCrunch
• LoanPro Announces Strategic Minority Equity Investment in TrueNorth - PR Newswire

Insurtech

• Meet Lula, a startup that aims to be the ‘Stripe for insurance’ and just raised $35.5M - TechCrunch

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