More than payment solutions at 1337 Venture’s Alpha Startups Fintech Edition

• Top three fintech startups to receive up to US$30,000 in early-stage funding
• Fintech report by 1337 Ventures highlights market opportunities for entry

CONTRARY to common belief, fintechs are not all about e-wallets and remittances. The Alpha Startups Fintech Edition Demo Day by 1337 Ventures, in collaboration with MDEC and Innostart Capital, presented a spectrum of digital solutions ranging across microloans, debt collection, investor profiling, insurtech and even will-writing and funeral planning.

The Aug 2 event attracted around 50 to 60 investors to witness the 11 startups in action. Other attendees providing their support were regulators, major banks, other fintech market players and industry stakeholders.

Founding partner of 1337 Ventures, Bikesh Lakhmichand says, “The value proposition we offer is the ability for the startups in this programme to meet prominent figures from the fintech world in one location.”

MDEC chief operating officer Ng Wan Peng shared her thoughts after the demo session, “I am pleasantly surprised and happy with the quality of the Malaysian fintechs. Perhaps not all are ready for the market yet, but I see a lot of good and new ideas in addressing existing problems.”

Explaining the programme, Bikesh says, “Alpha Startups is essentially a five-day programme, but for fintechs we spent four weeks, to provide founders with everything they need to know about building their business.”

Following a competitive three-month long selection process with over 200 applications and a one-month long pre-accelerator programme, the cohort of 11 made up of Laterpay, Buku 555, Gurudian, Iimmpact, Mback, Riskifier, microLEAP, Orderutan, Diraku, Senang and Memori introduced their businesses to the audience.

Although yet to be announced, the Demo Day will result in the three best startups receiving early stage funding of up to RM125,000 (US$30,619) in exchange for equity. At the event, Bikesh also elaborated on The Malaysian Fintech Opportunity Report 2018 by 1337 Ventures.

“A lot of people have been trying to delve into fintech but don’t know where to focus, so we published this report which maps out areas people are working on and areas where blank opportunities still exist,” he says.

The report zones into areas of opportunity such as RegTech, consumer lending, artificial intelligence (AI), hedge funds and capital market. However, Bikesh also points out that, “although e-wallets are a saturated area, there’s still no one e-wallet that everyone uses – so there is still ample opportunity there.”

The many ways to do fintech

Kicking off the demo session was Laterpay, which as the name suggests, allows customers to buy now and pay later. The loan and interest-free solution caters mainly to millennials who do not have access to credit cards.

Laterpay adds value to businesses by bringing in more sales from customers, which may otherwise be forgone. According to founder Lim Kah Hoe, “we have our own risk analytics that assesses our customers’ repayment capability when they upload their payslip for verification.”

As for Buku 555, the solution was inspired by the widely-used Malaysian classic, a little notebook people used to jot down their spending and debt in. Sharing some shortcomings of the traditional method, co-founder Ariff Putera said, “There’s the issue of unresolved debts, absence of debtor-lender contracts as well as the awkward factor of asking for money owed to you.”

Putting a digital twist on debt collection, Buku 555 hopes to offer a social function too, in addition to debt recording and tallying. Co-founder Firdaus Putra shared, “Based on demand, we’d like to introduce this feature in September 2018 to allow debt management of users with friends and family.”

Another startup that stood out was Riskifier which offers investor-profiling for digital natives. “We turn the boring user experience of profiling into an engaging experience through gamification,” said co-founder and CEO, Gino Wirthensohn.

As one of the RegTech 100 world’s most innovative RegTech companies, Riskifier is seeking to break into the Southeast Asian market by offering risk profiling for banks’ traditional financial products and with Cryptoprofiler a product for cryptocurrencies.

Aiming to disrupt the microfinance sector, MicroLEAP hopes to address limited access to microfinance due to factors such as race, high customer-acquisition costs and few regulated sources of funds.

The chief executive officer, Tunku Danny Nasaifuddin said, “We are open to all races and microenterprises, as long as they meet the anti-money laundering and credit checks.”

Since most lenders in the market focus on the small medium enterprise (SME) sector, Danny believes MicroLEAP has a competitive edge, “There’s only Funding Societies that also does microfinance but we use group lending as a credit-scoring method.”

With the fintechs still being at the early stage, the support provided by 1337 Ventures is pivotal in shaping the businesses. “We show them different means of making money and also act as a bridge connecting the startups to ecosystem players,” Bikesh says.

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