Mapping the buy now, pay later survivors in SEA

In The Top Up this week, we map out the key BNPL players in Southeast Asia and look at BharatX’s acquisition of healthcare financing firm Zenifi. [Read from your browser]( The Top Up 💵 Welcome to The Top Up! Delivered every fortnight via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and trends in fintech. If you’re not a subscriber, get access by [registering here]( IN FOCUS In today's newsletter, we look at: - The [survivors]( of Southeast Asia’s BNPL funding drought - The [challenge Vietnamese fintech unicorn VNLife faces]( as it seeks an IPO abroad - Why Y Combinator-backed BNPL company BharatX acquired healthcare financing firm Zenifi --------------------------------------------------------------- Hello {NAME} Looking at Southeast Asia’s remaining buy now, pay later (BNPL) providers today, it is hard to fathom the exuberance of the industry several years ago. Just a handful of firms remain after several exited the industry in recent months and others pivoted to new offerings. In this week’s Big Story, my colleague Scott underlines the funding dry spell in Southeast Asia’s BNPL space. It’s been close to two years since we last updated the landscape map, which outlines key players and trends in this sector. While rising interest rates and inflation have played a significant role in taming consumer spending, the handful of players that remain appear to be going strong. Continuing the BNPL theme in this week’s Hot Take, I discuss why India-based BharatX’s acquisition of healthcare financing startup Zenifi makes sense. Pushing offerings beyond lifestyle goods and electronics is one way for BNPL firms like BharatX to stay in the race for the long haul. -- Melissa  --------------------------------------------------------------- THE BIG STORY [Mapping the survivors of Southeast Asia’s BNPL funding drought]( At US$136 million, funding into Southeast Asia-based BNPL firms year to date is under a third of 2023’s levels.  --------------------------------------------------------------- THE HOT TAKE BNPL ventures into healthcare in search for the next best thing Here’s what happened: - Last week, India-based BNPL firm BharatX [purchased]( healthcare-focused financing startup Zenifi to target the medical lending market. - BharatX CEO Mehul Jindal said the deal would allow the company to go deeper into healthcare, where “currently no fintech or traditional players are able to disburse credit instantly,” which is crucial in emergency healthcare. - Established in 2023, Zenifi works with healthcare providers to offer zero-cost and low-cost [equated monthly installments]( for medical treatments to make them more affordable. Here’s our take: With this acquisition, BharatX moves beyond shopping into the healthcare sector, where customers incur larger-sized bills, and where an affordable credit solution could make a big difference. Tying BNPL with medical payments isn’t entirely new. In the UK, patients facing long waiting lists at public healthcare institutions may opt to pay for for private healthcare [through BNPL solutions]( like Klarna. Payments can be made for diagnostic tests like [MRI]( scans and X-rays, and even hip replacement surgery. Likewise, US-headquartered Affirm has [quietly]( begun offering BNPL loans for [elective medical procedures]( in its home country since the middle of last year, marking an expansion beyond its core ecommerce offering. It has around 130 elective medical merchants as of the end of 2023. At US$2,000 and above, payments for such procedures “suit its installment products,” Affirm senior vice president of revenue Pat Suh said in an interview. A key criticism around the use of BNPL in its traditional use case - to fund shopping for fashion, beauty, and other lifestyle products - is that it encourages excessive spending on items that a person doesn’t need - think lipsticks at Sephora, or a pair of new kicks. But installment payments for essential goods - from [furniture]( [mobile phones]( to other electronic devices - much less healthcare, turns that argument on its head. That said, regardless of what the payments are made for, many criticisms of BNPL still stand. Many consumers in the US, particularly those from lower-income groups, are [struggling to keep up]( with their loan repayments as inflation creeps up. Without proper financial management, the availability of easy credit could also result in borrowers overextending themselves, pushing them into debt. BNPL firms, too, face an increased risk of defaults as the transaction size becomes larger. Still, this evolution may be much-needed for BNPL providers looking to capture a bigger share of the market. As things stand, BNPL’s share of total ecommerce transactions are forecast to remain constant, despite its popularity. A recent [Worldpay report]( predicts that the share of BNPL as a percentage of total online spending in Asia Pacific is expected to remain unchanged - at 4% between 2023 and 2027. In contrast, the share of digital wallet payments is projected to climb from 70% in 2023 to account for 77% of total online and in-person transactions by 2027. Southeast Asia’s largest BNPL players don’t appear to be making such moves just yet. A search on Atome’s site shows its installment payment method can be used across beauty, fashion, F&B, electronics, travel, and other lifestyle categories, but none in the medical space - at least not yet. As a payment method in the retail space, BNPL could be reaching its peak. But moving into adjacent sectors could be just the evolution BNPL needs.  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the fintech scene [here](. 1️⃣ [Grab to end e-wallet service in Vietnam from July 1]( Nguyen Xuan Viet Binh, Grab Financial Group’s acting country head for Vietnam, said the decision came after a thorough review intending to restructure the company’s services. 2️⃣ [Ambani’s financial services app to take on Google, Amazon]( A test version of JioFinance, Jio Financial Services’ new super app for digital banking and payment services, can be used for [UPI transactions]( bill settlement, as well as insurance-related services. 3️⃣ [HSBC, Temasek back Marketnode’s series A funding]( Marketnode, a joint venture between Singapore Exchange and Temasek, aims to build a multi-asset ecosystem, starting in Asia Pacific. 4️⃣ [Aeon Bank officially launches Malaysia's first Islamic digital bank]( The bank aims to offer Shariah-compliant digital banking solutions to Malaysians, from savings accounts, retirement savings plans, borrowing options, to payment services. 5️⃣ [Mekong-backed F88 bounces back with $1.2m profit in Q1 2024]( The Vietnam-based company made several strategic shifts in 2023, including focusing on higher-quality loans, imposing stricter risk controls, and improving loan collection methods.  --------------------------------------------------------------- FYI [VNLife boss deems IPO ‘too complex’ for Vietnam-based firm]( Regulatory hurdles and investor disinterest make IPOs difficult for Vietnam’s tech firms, said VNLife CEO Niraan De Silva at Tech in Asia’s Saigon Summit.  --------------------------------------------------------------- EVENTS HAPPENING You can also check out a curated list of trending tech events [over here]( and Tech in Asia’s signature events [here](. [Tech in Asia Conference Kuala Lumpur 2024 : Malaysia on The Rise on July 24-25]( We'll be joined by some amazing speakers, including Khailee Ng, managing partner of 500 Global, who will deliver a keynote speech on opportunities in Malaysia’s tech ecosystem; Kah Meng Wong, co-founder of Funding Societies, who will share his insights on the Islamic fintech industry; and Dione Song, CEO of Love Bonito, who will talk about business expansion beyond Asia. Don't miss out - [purchase your tickets]( today! [Product Development Conference (Jakarta, 25-26 June 2024)]( What's ahead at the Product Development Conference, coming up next month? We have these sessions lining up for you: scaling secrets from Grab's Head of Mobility, Samir Kumar, product development hacks for the retail industry from Kawan Lama Group's Chief Data and Digital Officer, Renaldi Tjahaya, and building product development strategy for every funding stage from Antler's Partner, Agung Bezharie. Last chance to get 25% off your PDC ticket; this offer ends on June 6th. [Snap up your ticket]( now or risk FOMO! [Tech in Asia x Airwallex Startup Night on June 19]( Forget the elevator pitches and forced smiles of typical networking events. Held on June 19, Tech in Asia x Airwallex Startup Night is about one thing: forging genuine connections that fuel real growth. This isn't for everyone, though. We're handpicking a select group of ambitious founders and startup leaders who are ready to move beyond the hype and achieve real impact. [Register for an invite today!]( ---------------------------------------------------------------  That’s it for this edition - we hope you liked it! Do also check out previous issues of the newsletter [here](. Not your cup of tea? You can unsubscribe from this newsletter by going to your “edit profile” page and choosing that option in our preferences center. 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