In The Top Up this week, we look at social commerce platform Mapanâs fast growth and buy now, pay later firm Zipâs unwinding. [Read from your browser]( The Top Up ðµ 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 youâre not a subscriber, get access by [registering here](. Written by Melissa Goh
Fintech Journalist Hello {NAME} Being based in Singapore all my life, the concept of arisan is one that I needed to wrap my head around. Those who live in Indonesia would be familiar with this practice of rotational savings, where groups of women - usually housewives between the ages of 30 and 45 - routinely pool a nominal sum of savings. Each month, a lottery determines a winner, who takes home the entire pot of funds. The social component and the âgame of chanceâ element are key attractions of arisan. In this weekâs Big Story, my colleague Jofie dives into this traditional practice - that many in Indonesia still partake in today - in his profile of Mapan. The firm, which was acquired by Gojek in 2017 and later spun out to become an independent company, applies the concept of arisan to social commerce. Instead of receiving money, participants choose from Mapanâs catalog of 1,000 household and other products and contribute an âinstallmentâ payment. The winner takes home their product of choice and the cycle repeats. The firm is certainly on to something: last year, it saw a 5x growth in revenue. Things are looking less certain over at buy now, pay later firm Zip, as I discuss in this weekâs Hot Take. Following an aggressive acquisition spree, it is now looking to shed most of its assets in several markets to achieve positive cash flow by the first half of 2024. Zip, Australiaâs second largest BNPL firm following Afterpay, has seen its share price fall from its 2021 highs of A$14.5 (US$9.74) to A$0.53 (US$0.36) as market sentiment shifts away from the once red-hot sector. With rising interest rates, inflation, and macroeconomic uncertainty dampening spending, as well as more regulation to come in its home market, is Zipâs downsizing enough to turn things around? -- Melissa
 --------------------------------------------------------------- THE BIG STORY [This social commerce firm digitalized âarisanâ and grew revenue 3x]( GoTo-backed Mapan adds a digital spin to the practice of âarisan,â a traditional rotating savings and credit scheme in Indonesian culture.
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--------------------------------------------------------------- THE HOT TAKE Zipping up a past chapter Hereâs what happened: - Australian buy now, pay later provider Zip is [preparing to exit]( most of its markets as it aims to become cash-flow positive by the first half of 2024.
- The firm owns a stake in Philippines-based TendoPay and also has operations in India, Turkey, Czech Republic, and several other markets.
- Following its divestments, Zip will focus on Australia, New Zealand, the US, and Canada. Hereâs our take: Zip, Australiaâs second largest BNPL player following AfterPay, had plans to become a global business. At the height of BNPL fever, it jumped into the deep end - sweeping up targets in markets such as Dubai, India, and Africa. Then, the pandemic-fueled spending boom eased. In its place, rising inflation and economic uncertainty have dented spending, while rising interest rates are weighing on funding costs. Now, Zip is looking to offload a majority of those acquired assets, including in the Philippines, India, and Turkey. In June 2022, the firm [exited Singapore]( citing âsignificant and swift changes to the broader macro economy.â Since then, it has also deprioritized a cryptocurrency offering and bowed out of the UK. The company had also been contemplating an acquisition of US-based Sezzle last year, although that eventually [fell apart](. Analysts said that the deal would have slowed Zipâs near-term cash burn. To Zipâs credit, it wasnât the only BNPL player snapping up these firms when the market was on an upturn. Payments major PayPal [bought]( Paidy in 2021 in a move to gain market share in Japan and in the region. There was also Blockâs [US$29 billion]( acquisition of Afterpay. But back to Zipâs acquisition spree. Joining forces increases transaction volumes, and proponents of such acquisitions [claim]( this can more efficiently train algorithms and improve the credit decision process. While these purported benefits remain unproven, whatâs certain is that combining two loss-making firms, each tackling rising bad debts, will only lengthen the path to profitability. Zip has enough problems of its own: Net losses [grew to A$241 million (US$162.5 million)]( in the six months ending December 2022, up from A$170 million (US$115 million) in the same period the year before. Net bad debt in Australia, measured in payments more than 180 days overdue, also [grew from 3.4% to 3.8%]( of receivables between March and June 2022. As tides shift against the once red-hot BNPL sector, it raises the question of whether Zip might struggle to offload its assets at a fair value. That said, things appear to be picking up for the firm, with the group reducing its cash burn [from A$48 million]( (US$32.2 million) in the June quarter to A$30 million (US$20.2 million) in the December quarter last year. Zip also said itâs on track to report positive cash earnings on a group basis in its 2024 fiscal year. Even then, its troubles are far from over. In its home market, Zip will have to battle [stricter regulations]( on the BNPL industry, which could see the offering being regulated like traditional credit products. The firm has voiced opposition to this in favor of a [middle-ground approach]( which would requires BNPL providers to hold an Australian credit license and conduct suitability checks. -- Melissa Currency converted from US dollar to Australian dollar: US$1=A$1.5.
 --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asiaâs coverage of the fintech scene [here](. 1ï¸â£Â [VN lender F88 gears up for domestic IPO with $50m raise]( The firm will pour the new funds into its data analytics and data science efforts, as well as in acquiring new customers and hiring more staff. 2ï¸â£Â [Vietnam police to investigate IPO-bound lender F88]( The company was under investigation for alleged extortion of users in its debt collection activities. 3ï¸â£Â [Fintech firm Fazz slashes jobs, freezes co-foundersâ salaries]( The layoffs took place on March 1 and impacted staff from all of the companyâs offices across the region. 4ï¸â£Â [Akulaku shareholders seek $100m sale at up to 30% discount]( This comes after the BNPL firm raised US$200 million from Mitsubishi UFJ Financial Group in December 2022. 5ï¸â£Â [ILex gets $4.5m to tackle inefficiencies in corporate lending]( The Singapore-based startup, which has raised US$8.5 million to date, aims to help banks, asset managers, and debt advisors achieve operational efficiencies in the corporate lending process.
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