Technological Silver Linings Amid Covid Havoc
There is a silver lining in every dark cloud. We are currently in the depths of despair in the coronavirus inflicted health and economic meltdown. In the United States, there were 5 million Covid cases and over 163,000 deaths as of August 2020 on the health front and record 10.8% unemployment of 16.3 million unemployed Americans as of July 2020.
Over in Asia, Singapore narrowly averted its first legal strike since 1986, when aerospace company Eagles Services Asia metered out unfair retrenchment on its unionized workers. This was in the face of massive losses and retrenchment from household names in aviation (e.g. Airbus) and tourism (e.g. Resort World Singapore). Strikes are usually among the first sparks of civil unrest across societies and history. Therefore, it could be said that Singapore had a close shave economically and on the wider social fabric.
Beyond these sobering realities, we are observing multiple votes of confidence in the application of technology. Digitization had shifted from being a buzzword to basic necessity in the post-Covid world. While this disruption had upended certain traditional business models, technology business models have been shining brightly.
1. US$80 Million Acquisition of TradeGecko by Intuit
TradeGecko is a software as a service (SaaS) company that develops online inventory and order management system. TradeGecko provides a strategic service as Covid has disrupted supply chain globally due to restraints in global transportation. TradeGecko was designed and built for small businesses since 2012 and based in Singapore.
Source: TradeGecko
TradeGecko provides a strong and robust inventory management system, without breaking the bank for small business, which improves cash flow and profitability. Cash flow is king to Small and Medium Enterprise who unlike their larger counterparts, have lesser access to the credit and equity markets to raise funds. They had been extremely successful with customers from 100 countries and processed over $5 billion worth of inventory over the past 8 years.
One of their strategic moves had to be their full integration with Quickbook which provides bookkeeping and accounting software. These combinations are invaluable for any small business owners. The owners of TradeGecko themselves would be joining Intuit (Parent company of Quickbook and acquirer) to develop their products further. On the financial side, this US$80 million represents a strong validation of TradeGecko’s business model and payday for its founders and venture capitalists.
2. US$10 Million Funding for AyoConnect
AyoConnect is an Indonesia based company that specialize in providing bill payment services through their open bill network. For offline services, they serve the underbanked consumers through postal service company POS Indonesia and convenience chain store Indomart. For online services, they work with financial institutions such as Bank BRI and ecommerce platforms such as Lazada.
This fintech company had been founded in November 2015 and had recently seen strong growth of 400% in the first six months due to the surge in e-commerce demand due to Covid. They had over 100 employees and had raised US$5 million before their recent US$5 million Pre-Series B fund raise.
Source: Ayoconnect
Ayoconnect had processed over 4 million transactions and they are tapping the rising trend of e-commerce. By building the payment infrastructure, they position themselves for the long run. Savvy institutional investors such as Strive and AC Ventures returned to back them alongside new investors such as BRI Ventures, Kakaku, and Brama One Ventures.
3. HK$3 Million Expansion into Hong Kong by 3E Accounting
3E Accounting is a Singapore based company which is known for implementing technology to boost the productivity in the traditional field of accounting. 3E Accounting made the unconventional choice to commit 18 months and HK$3 Million to expand into Hong Kong amid civil unrest and Covid-19 disruption.
Source: 3E Accounting Hong Kong
They chose to leverage on the power of digital marketing in their decision-making process to enter this controversial market. 3E Accounting’s global headquarters gave the green light in July 2019 after their marketing team had achieved considerable traction over their competitors after 6 months of intensive digital marketing efforts.
3E Accounting opened their Hong Kong office officially on 08 July 2020 in the most expensive city in the world. They are confident that their enhanced productivity with their use of technology would allow them to scale rapidly and offset the high operating cost in Hong Kong.
Capital Vote of Confidence
We have seen how three different fintech companies had received significant capital injection in these challenging times. They were in different phase of growth in their fintech journey from the most established TradeGecko to the youngest 3E Accounting Hong Kong. Nonetheless, the unifying factor continue to be that all of them utilized cutting edge technology to stand out of the market.
Their financial backers had shown that they are in for the long run and would outlast the Covid pandemic after the vaccine has been found and widely distributed around year 2022. Nevertheless, our life will continue, and we will adapt to this change with digitization. The aftermath of 9/11 meant more stringent airport security checks. The aftermath of Covid would likely be radically different from before January 2020.
