Southeast Asia’s up-and-coming wealthtech players

In The Top Up this week, we map out the key wealthtech players in Southeast Asia and examine the valuation spike of Indonesia’s Cermati. [Read from your browser]( The Top Up 💵 Welcome to The Top Up! Delivered every Wednesday 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](. Written by Budi Sutrisno Journalist Hello {NAME} Since becoming a quarter-of-a-century-old, I’ve noticed that I can spend hours with my friends talking about how to manage our income. Many of us have started investing in stocks and crypto in order to achieve savings milestones before turning 30. However, I’ve also learned that financial management is a lifelong hustle. Whether you’re planning a wedding or looking to retire, budgeting is crucial. And with the help of tech-enabled wealth management platforms, we can do it more easily and efficiently. In this week’s Big Story, my colleague Qishin maps out notable wealthtech players in Southeast Asia and further categorizes them into digital brokerages, advisories, decentralized finance (DeFi) platforms, and others. Singapore and Indonesia are two bright spots for wealthtech in the region, with the former seeing a 7x increase in such investments between 2017 and 2021. The enthusiasm of millennials and Gen Z - like my friends and I - for investing is one of the driving forces behind the rise of wealthtech. Meanwhile, for this week’s Hot Take, I analyze Indonesia-based Cermati and what could be powering the financial aggregator’s fast-growing valuation. – Budi  --------------------------------------------------------------- THE BIG STORY [Mapping Southeast Asia’s key wealthtech players]( Asia’s wealthtech scene is on the rise, with Singapore taking the lead in investments and deal numbers.  --------------------------------------------------------------- THE HOT TAKE  Why is Cermati’s valuation growing so fast? Here’s what happened: - Cermati, a financial aggregator based in Indonesia, has secured over US$17 million in a series D round, DailySocial [reported](. - The round was reportedly led by existing investor MDI Ventures, which also [took the lead]( in Cermati’s series C fundraise in May 2021. - The latest funding brings Cermati’s valuation to over US$344 million, according to VentureCap Insights. Here’s our take: It’s no secret that the pandemic was a test for companies in the travel sector. The same goes for insurtech firms, which saw sales of travel insurance plunge. GoBear in Singapore was no exception. Despite just raising funds, the firm [shut down]( in January 2021 after a costly decision to launch its own travel insurance products. On the surface, Cermati shares a similar story with now-defunct GoBear. Both started out as financial marketplaces that compared products like credit cards before diversifying into insurance plans and loans. According to VentureCap Insights, Cermati has raised over US$58 million to date. Its post-money valuation of US$344 million is almost 10x of what it was worth in 2018. Cermati, which was founded in 2015, has not publicly confirmed these figures.  See also: [Behind GoBear’s surprising and sudden closure](  Why the huge discrepancy in valuation? What many may not realize is that Cermati has grown past its financial aggregator days and is now an all-round fintech firm. Today, it operates a holding company called the Cermati Fintech Group (CFG), which offers lending via a buy now, pay later platform that it [partly owns]( called Indodana. CFG also has a insurtech platform. In 2019, Cermati acquired local insurance broker and consultancy Fokus Solusi Proteksi and rebranded it to Cermati Insurance. Eventually, it became [Cermati Protect]( which has teamed up with over 50 insurance companies to provide employee, logistics, and other types of insurance for businesses. The group has started underwriting microloan and insurance products, along with loan distribution and digital ID verification. CFG is working towards becoming a full-stack insurtech platform, which could put it in the league of traditional insurance companies. A [banking-as-a-service (BaaS)]( offering that it launched in 2021 could also be a reason for investor optimism. The BaaS unit was launched in partnership with digital bank BCA Digital and ecommerce platform Blibli. Both are part of the conglomerate Djarum Group, a Cermati investor. The integration allows BCA Digital users to avail of banking services such as opening an account, transferring funds, and making payments through the Blibli app. It has also enabled Blibli to launch its own BNPL solution, Blibli PayLater. BaaS startups are having a moment. US-based Unit, which helps companies embed financial services into their products, raised [US$100 million]( in May. This pushed the firm’s value to US$1.2 billion. In Asia Pacific, the BaaS industry is [worth US$7 trillion]( according to research by Finastra. Companies looking to migrate to BaaS solutions are also expected to grow at a rate of more than 70% per year globally. That said, it’s unclear how big Cermati’s BaaS business is relative to its loans or insurance verticals. But for now, what’s certain is that Cermati will benefit from its deep pockets and the network of major investors like Djarum. – Budi  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Check out Tech in Asia’s coverage of the fintech scene [here](. 1️⃣ [WeLab, Indonesian conglomerate close $518m deal to build local digibank]( WeLab raised US$240 million through a consortium to buy a 24% stake in Bank Jasa Jakarta last December. Since then, the stake has increased to 49.56%. 2️⃣ [Singapore, India fintech regulators sign cross-border sandbox agreement]( Under the new agreement, companies in the Monetary Authority of Singapore’s regulatory sandbox can test their use cases in India and vice versa. 3️⃣ [Ant Group may see IPO comeback after Shanghai land purchase]( Upon completion, Ant will acquire roughly 60,000 square meters of office space that can accommodate “thousands of employees.” 4️⃣ [MAS lays down new roadmap for SG’s financial services sector]( Singapore’s central bank projects that the country’s financial services industry will grow at an average of 4% to 5% per year until 2025, creating 3,000 to 4,000 new jobs each year. 5️⃣ [Tiger Global-backed fintech firm raises $100m series C round]( Fazz will use its new funds to expand in Southeast Asia. The company offers two main products: Fazz Agen for small retailers and Fazz Business for startups and corporates.  ---------------------------------------------------------------  FYI [Indonesia’s Dana joins unicorn club]( This comes after Sinar Mas Group and Lazada invested in the e-wallet player.  --------------------------------------------------------------- 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. In the meantime, if you have any feedback or ideas, feel free to get in touch with Terence, our editor-in-chief, at terence@techinasia.com. See you next week! P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? 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