A closer look into the layoffs at Oriente and Endowus

In The Top Up this week, we dive into the job cuts at two fintech firms, Hong Kong-headquartered Oriente and Singapore-based Endowus. [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](. Written by Budi Sutrisno Journalist Hello {NAME} As an Indonesia-based journalist, I find it challenging to keep track of all the online lending companies operating in the country. As part of my routine research, I recently came across an unfamiliar name that caught my attention: Finmas. Little did I know this local firm is connected to the troubled Hong Kong-headquartered Oriente, which my colleague Melissa reports on in this week’s Big Story. In 2019, Oriente and Jakarta-based conglomerate Sinar Mas launched Finmas, which then became one of the most downloaded personal loans apps under the finance category in Indonesia. Oriente was badly affected by the Covid-19 pandemic, and it retrenched over 20% of its staff between late 2019 and early 2020. As it now faces difficulties in raising funds, Oriente reduced its headcount again. Finmas slashed jobs in December 2022 while Oriente’s Vietnam unit closed down several months earlier. Affected employees in Vietnam are still owed their salaries and severance pay. While the company told them that it would explore options to secure funding, their ability to recover withheld salaries remains in question. Speaking of layoffs, Singapore-based Endowus recently trimmed its workforce as well. In this week’s Hot Take, I take a look at the firm’s job cuts and what it means for the wealthtech industry as a whole. -- Budi  --------------------------------------------------------------- THE BIG STORY [Oriente staff decry abrupt dismissal, unpaid salaries after Vietnam and Indonesia closure]( The fintech firm, whose CEO left last year, has struggled to bounce back after its offline lending business was hit hard by the pandemic.  --------------------------------------------------------------- THE HOT TAKE What Endowus’ layoffs mean for Southeast Asia’s wealthtech industry Here’s what happened: - Endowus, a Singapore-based wealthtech platform backed by Japan's SoftBank, has [shed]( less than 10% of its headcount. - CEO Gregory Van told Tech in Asia that Endowus’ growth trajectory had slowed amid the uncertain economic environment. - He said the company currently manages over US$4 billion in assets - a [twofold increase]( from August 2022. Here’s our take: The layoffs at Endowus portend the wider effects of market volatility and a looming recession for the region’s wealthtech industry. This is hitting global crypto firms like Coinbase and Blockchain.com as well as regional investment players such as [StashAway]( in Singapore and Indonesian unicorn [Ajaib]( which have also shed employees. Some of these apps have lost users. According to third-party estimates, Endowus’ active users fell to 15,000 in February from around 25,000 during the same period in 2022. Meanwhile, Ajaib went from having 4.5 million to 3 million users within the same timeframe. The current economic environment is causing investors to feel uncertain about the future. In addition, those who became jobless or had their working hours reduced may have reprioritized their immediate needs over investing. Nevertheless, Endowus’ layoffs may come as a surprise for some. When rival StashAway slashed jobs in 2022, Endowus said it had [no plans to follow suit]( and was in fact still selectively hiring. Until recently, Endowus was still splashing out on prominent out-of-home advertisements, including some that featured well-known Singaporean personalities. See also: [Mapping Southeast Asia’s key wealthtech players]( Despite these developments, it’s not the end of the road for the wealthtech sector. While investors are moving away from riskier assets, companies have the ability to adapt and innovate. Case in point: Ajaib, which started off as a mutual funds platform. Following the layoffs last year, its crypto arm eliminated transaction fees for Bitcoin purchases and sales, which contributed to a [600% surge]( in transactions. The move is aimed at luring users to the platform, but Ajaib still charges transaction fees for other crypto products. In a 2022 [report]( co-produced with KPMG, Endowus predicted a slowdown in investment performance and asset growth as well as significant changes in investor behavior amid an uncertain market. However, Endowus still saw opportunities, including a large segment of the affluent and the emerging affluent who are digitally native and seeking greater control over their finances. Now may be the time for the company to reassess its operating models and adjust to the changing trends in the relatively nascent space in order to retain users and attract new ones. Just like their [US counterparts]( wealth managers in Southeast Asia are facing the end of a period of painless growth that was fueled by easy money and favorable market conditions. Luckily for Endowus, it has raised over US$49 million to date and is based in a country that has a supportive regulatory environment and significant household wealth. -- Budi  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the fintech scene [here](. 1️⃣ [SG’s Alchemy Pay secures $10m to expand to South Korea]( The Singapore-based crypto firm’s valuation hit US$400 million after its recent funding. 2️⃣ [Swiss VC firm Tenity to expand SEA fintech investment]( The early-stage investment firm also runs an incubation program across three hubs: Switzerland, Singapore, and the Nordic region. 3️⃣ [SG, Malaysia announce payment system linkage]( This will enable customers of participating financial institutions to make retail payments to merchants in both countries through QR codes. 4️⃣ [Line, Mizuho put brakes on digibank project in Japan]( The companies had plans to establish a new bank under a joint venture entity called Line Bank Preparatory Company. 5️⃣ [TIA Startup Arena winner raises $1.6m to advance ‘family banking’]( The Singapore-based fintech company provides an all-in-one money management platform designed for families.  --------------------------------------------------------------- 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 in a fortnight! 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? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894