Demand for ESOP management tools spurs revenue at Qapita

In The Top Up this week, we look at the FY 2023 results of equity management platform Qapita and Razer Fintech’s rebranding to Fiuu. [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: - How demand for ESOP tools drove Qapita’s [revenue]( in FY 2023 - Razer Fintech’s rebranding to Fiuu - The alleged [financial misconduct]( of Investree’s ex-CEO and co-founder --------------------------------------------------------------- Hello {NAME} Several friends of mine have been waiting it out for months at their firms, which are seemingly on the brink of an IPO. For many, the potential payoff of their employee stock ownership plans (ESOPs) far outweighs the present burnout or lure of a more exciting role. A report by Saison Capital in 2021 found that one in five companies dissolves all options, including vested ones, upon employee departure. As a result, many employees grit their teeth and stay on, especially when an IPO seems on the horizon. The same report found that on the whole, ESOPs at Southeast Asian companies tend to veer in favor of the companies, rather than the talent they’re meant to incentivize. It’s clear that companies in the region are a long way off from their US peers in implementing such options - if at all. Still, it seems like an increasing number are demanding equity management solutions, and the growing revenue of East Ventures-backed Qapita reflects that. In this week’s Big Story, my colleague Budi dives into Qapita’s financial results in its 15-month financial year ended March 2023. While the firm had grown its revenue to US$8.9 million in just 15 months, total costs had also increased 10x compared to 2021. On the topic of financials, Fiuu - previously Razer Fintech - has said that it is operating at a “profitable level” and that revenues have “doubled over the past four years.” I discuss the significance of Razer Fintech’s rebranding and what that bodes for its B2B payments business in this week’s Hot Take. -- Melissa  --------------------------------------------------------------- THE BIG STORY [Qapita’s revenue jumps to $8.9m in FYE March 2023, but losses widen]( The Singapore-based equity management platform aims to be profitable by March 2025, CEO Ravi Ravulaparthi tells Tech in Asia.  --------------------------------------------------------------- THE HOT TAKE Scaling fintech services fast and Fiuu-rious Here’s what happened: - Last week, Razer Fintech, the fintech arm of gaming hardware firm Razer, [rebranded]( to Fiuu. - Razer Merchant Services, the B2B payments unit under Razer Fintech, will also go by the new name. - This will allow the fintech business to “continue its path independently from the Razer brand,” said Lee Li Meng, executive chairman of Fiuu, in a statement. Here’s our take: It’s hard to think of Razer and not think of gaming - the name immediately calls to mind its lime green and black gaming accessories. While that has worked in the Singapore-born firm’s favor for the most part, its gaming roots can be a double-edged sword as it eyes further growth in the fast-growing payments space. Fiuu, established in 2018, was designed to serve a wide range of sectors from the start. In the first half of 2021, its payment volumes grew, driven mainly by ecommerce marketplace purchases, food deliveries, and e-wallet top-ups. Its merchants also hailed from all sectors including retail, F&B, and professional services. Distancing itself from its gaming-focused parent is apt considering its client mix through the years. Fiuu [continues to serve]( firms from ecommerce, fashion retailers, F&B, to financial services, with notable names such as Adidas, Starbucks, TikTok, and Foodpanda. This diversity also demonstrates Fiuu’s ambitions to scale further. As a B2B solution, Fiuu provides a payment processing gateway similar to services offered by Stripe or Adyen. It enables businesses to accept local and cross-border digital payments via over 110 payment methods, from e-wallet and bank transfers to credit card payments. Fiuu also has an offline payment network of over 1 million acceptance points, where consumers can make bill payments, telco reloads, or payments for ecommerce purchases. In its 2023 fiscal year, Fiuu’s total payment volume reached over US$6.6 billion - a 10% year-on-year growth compared to [US$6 billion]( in 2022. While large, it’s still a fraction of what payment giants are processing. For example, Stripe said that in 2022, it processed [US$817 billion]( in transactions for businesses, growing 26% from the year before. Still, Fiuu’s strength could lie in its regional connectivity in online and offline platforms. While most payment gateways operate in just one or two countries within Southeast Asia, as Lee noted previously, Fiuu sees an opportunity to be the one payments partner for Southeast Asian companies that want to scale regionally. The firm is certainly working hard to keep its offerings relevant. In January, it partnered with Philippines-based buy now, pay later (BNPL) platform BillEase so businesses that work with Fiuu can offer installment payments to their customers. Current macro conditions haven’t been cheery. Rising inflation and interest rates, coupled with a dip in ecommerce spending in 2023, led revenue to [slow sharply]( at rivals like Stripe, compared to pre-pandemic levels. In H1 2023, Adyen’s revenues grew 21% year on year - its [slowest growth rate on record](. While full-year revenue in 2023 was up 23% year to year to €1.6 billion (US$1.8 billion), this paled in contrast with [pre-pandemic levels]( Between 2018 and 2019, full-year revenue jumped 51%. Southeast Asia faces a similar challenge - between 2022 and 2023, ecommerce gross merchandise value [increased 6%]( to US$138 billion, but this was a decline from the 16% growth the region saw between 2021 and 2022. Now privatized, Razer no longer needs to publish its financial filings for all to scrutinize. Still, Fiuu has shared that it is now operating at a “profitable level” and its revenues have “doubled over the past four years.” Perhaps the rebranding will give Fiuu the added exposure it seeks.  --------------------------------------------------------------- NEWS YOU SHOULD KNOW Also check out Tech in Asia’s coverage of the fintech scene [here](. 1️⃣ [Insurtech firm Sunday expands SEA presence with KSK Indonesia acquisition]( KSK Insurance - which offers car, property, and cargo policies with a strong presence in key Indonesian regions - will gain access to Sunday’s tech, including its AI-powered risk assessment platform. 2️⃣ [Bukalapak discontinues BukaCicilan, adding to woes in BNPL space]( The decision, effective February 29, was aimed at streamlining payment options for customers, the company said. 3️⃣ [Thailand starts accepting virtual banking permit applications]( According to a Reuters report, applications are open for the next six months and there are no limits to the number of permits to be issued. 4️⃣ [Wagely banks $23m to widen earned-wage access reach in Indonesia, Bangladesh]( The firm, which lets employees in both countries collect their salary after a day’s work, has hit 1 million salary disbursements since its launch in 2020. 5️⃣ [OJK removes restrictions on Akulaku’s BNPL services]( In October 2023, Indonesia’s Financial Services Authority placed limits on Akulaku’s operations after the firm allegedly violated the supervisory obligations that BNPL operators must fulfill, including risk management and corporate governance.  --------------------------------------------------------------- FYI [Who is JTA, Investree’s lead investor in its $231m funding round?]( Tech in Asia could not verify some key facts about JTA, including its CEO Salemizadeh’s claim of having an MBA from Carnegie Mellon University. --------------------------------------------------------------- That’s it for this edition - we hope you liked it! 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