It is an all most familiar pattern, as Singapore banking enterprises have been picking up assets and acquiring wealth management and retail banking arms of foreign players that have retreated the rough terrain of the Singapore market.
But as much as Singapore banks are locked in a race to expand their wealth management businesses, they are also competing with larger Western rivals such as UBS Group AG. Furthermore, Singapore banks also have to keep up with the city-state financial ambitions of being the key financial hub in Asia.
In this scenario, Keith Pogson, a senior partner for financial services at Ernst & Young said, “You either bulk up or you go niche. For the banks here in Singapore, the obvious choice is to bulk up.”
But even among local banks, DBS Bank and Bank of Singapore are the most intense to ramp up on its offerings. As the two banks combined have already announced at least US$400 million worth of acquisitions for the year 2016 alone.
Bringing an update on their most recent purchase, OCBC who wholly owns Bank of Singapore has completed its purchase of Britain’s Barclays Pic’s wealth-management units in Singapore and Hong Kong on Monday for S$ 324.5 million (about US$227.5 million) while DBS has announced last month that it will buy Asian retail and wealth businesses from Australia and New Zealand (ANZ) Banking Group Ltd’s wealth businesses in five Asian countries for about US$110 million.
A brief introduction on the two Singaporean banks:
Bank Of Singapore
Bank of Singapore (BoS) was formed in 2010 from the combination of the former ING Asia Private Bank business and OCBC Private Banking business. It grew its starting asset under management of US$22 billion to US$62 billion in September 2016, riding on its strong investment capabilities as well as wealth planning and premium advisory services supported by one of the largest research teams in Asia. Operating as one of OCBC’s private banking arm, Bank of Singapore, had $68 billion worth of assets under management at the end of 2015.
Established on July 16, 1968, by the Government of Singapore to take over the industrial financing activities from the Economic Development Board, DBS since then has grown to become one of the largest bank in SouthEast Asia by assets. At the end of 2015, the private bank had S$97 billion (about US$70 billion) of assets belonging to high net worth clients.
Further Consolidation In Asian Wealth Scene
Both DBS Group Holdings Ltd. and Bank of Singapore, Asia’s largest homegrown private bank, are considering more acquisitions as they intend to expand their foothold onto a larger slice of Asian wealth market share, consisting of businesses from the region’s growing number of successful millionaires.
The two banks are looking to intensify its focus on capitalizing the growing wealth in Asia, which will allow them to offset the drag on interest income by lowering global interest rates.
Bank of Singapore, the Oversea-Chinese Banking Corp.’s private-banking arm said that it will definitely evaluate any opportunities. While the DBS acquisition criteria were also revealed in a Bloomberg Interview to be any deals that plays to DBS strength, fitting with the company’s strategy and reasonably priced.“We look at deals if it fits in with our overall strategy and there’s price discipline and we have both the bandwidth and the operational expertise to do so,” the Singaporean Bank’s consumer and wealth head, Tan Su Shan told Bloomberg Television’s Haslinda Amin on Tuesday.
Obstacles For Foreign Players
Some may question why are these foreign players dropping out of the game in spite of the fast pace growth in Asia’s private wealth scene. Slimmer margins amid rising costs, complex regulatory compliance and mounting pressure for higher returns are among their reasons for leaving as they are unable to achieve the scale needed to be quickly profitable.
Nonetheless, this makes it a great time for Singapore banks to snap up these assets, to build the scale needed to overcome the same challenges without additional burden. Furthermore, these consolidations will help gain a competitive advantage and scale to work in this wealth business environment.
As seen with the move on ANZ Banking Group, DBC has added about 1.3 million people to its client list, including about 100,000 deemed affluent or private wealth customers. Similarly, the Barclays deals have also enlarged the firm assets under management to be more than US$75 billion. This has also made it closer to DBS, which has ranked fifth in Private Banker International’s annual survey of Asia-Pacific Banks, with $79 billion of high-net-worth client assets.
ABN Amro Group: DBS Next Possible Acquisition
On a similar note, DBS Group Holdings Ltd. is among the companies which are considering bids for ABN Amro Group NV’s private-banking business in Asia, alongside with Julius Baer Group Ltd. and LGT Bank that have similarly expressed interests in the ABN Amro Unit.
According to a 2015 ranking by Asian Private Banker, ABN Amro is the 18th-largest private bank in Asia, with $19 billion of assets under management in the region. Sources also told that this deal could potentially fetch more than US$300 million, would most likely be anounced by year-end.
Tan Su Shan did not comment directly regarding this matter.
The Way Forward
Thus, the race is on for Singapore banks to acquire and compete for the largest wealth acquisition which will give it a leg up from its competitors. That is not only on the local level, but the acquisitions come at an opportune time for the Asia Pacific to overtake the Western Europe to become the second wealthiest region in 2017.
Nonetheless, for local banks, the challenge also exis post-acquisition as they have to keep an eye out on the integration of the new assets, and retaining clients. But unlike DBS and BoS, UOB has not pursued acquisitions to expand its private bank, leaving it smaller than those of its two rivals.
By Vivian Foo, Unicorn Media
As part of their vision initiative to provide renewable energy access to Southeast Asia, ADB-backed private equity firm Asia Climate Partners (ACP) has made a US$20 million investment in Fluidic Energy, a provider of intelligent storage solutions based in Scottsdale.
By supporting Fluidic Energy’s expansion of its game-changing, intelligent and low-cost storage technology, ACP hopes to extend renewable energy access to Southeast Asia while limiting carbon intensive energy adoption and advocating the replacements of environmentally damaging diesel generator sets, the company says in a statement.
“We are excited about this investment for many reasons, including the commercial traction of Fluidic Energy’s product and its proven ability to deliver in diverse environments and harsh conditions, competitive position in its target market; and the team’s commitment to high environmental standards and improving lives through its business offering,” said Duarte Da Silva, the Managing Director of Asia Climate Partners.
One of Fluidic Energy recent projects was the deployment of over 22 MWh of energy storage to 96 PV and energy storage powered rural electrification projects across Indonesia. This has provided clean and reliable energy to over 110,000 people.
“Energy storage is a key enabler of widespread decentralized renewable energy generation and we see enormous potential in other core countries like Indonesia and the Philippines as well as our own country India, that have high penetration of diesel generation and low electrification rates,” Duarte adds.
Furthermore, this lies in line with the initiative of Asian Asia Climate Partners, which exists as a joint venture between the Asian Development Bank, ORIX, and Robeco. The company is dedicated to clean energy, resource efficiency and environment sectors in the Asia-Pacific region. The company
Though based in Arizona, Fluidic Energy, however, has a strong presence in Asia, having established a regional headquarter and manufacturing facilities in Southeast Asia. Fluidic Energy has also been manufacturing its energy storage systems in Indonesia since 2011 and supplying its system to both telecom and rural electrification.
“We appreciate this partnership with ACP, including their regional expertise and the synergy that we can create with our combined vision of leveraging technology and investment to truly chnge lives in Asia and those around the world,” Steve Scharnhorst, CEO of Fluidic Energy said.
Of the more than 1.2 billion people without electricity on our planet today, 600 million are living in Asia. “Although we were founded in the U.S. and offer solutions for markets such as telecom, grid firming, and critical power, we immediately recognized the positive impact we could have in the Asia-Pacific region. We focused much of our commercialization strategy on Asia for the first several years simply because there was a problem that we knew we could help fix,” said Steve Scharnhorst, CEO of Fluidic Energy.
By combining the best energy and power centric technologies with integrated intelligence, Fluidic uniquely approaches the market with a whole product solution optimized for long duration and harsh environmental settings. A key enabler for Fluidic’s hybrid solutions is its proprietary Zinc-air battery technology, which is optimal for long duration applications due to its unique air-breathing architecture. Using “free” air allows for significantly lower costs as runtimes extend.
Fluidic solutions can store large amounts of energy and discharge that energy over several days, providing autonomy to villages and communities. This autonomy allows communities to adopt renewables, without sacrificing continuous, reliable electricity; remaining fully functional even when there is limited sunshine for days. In comparison to mini-grids that provide only a few hours of autonomy, days of autonomy helps empower these areas via economic growth and commercial activities. The environmental benefits speak for themselves: lower emissions while using no lead, cadmium, mercury, fossil fuels or other toxic elements; displacement of diesel generators and lead acid batteries and reduced CO2.
To date, the company has shipped more than 100,000 batteries worldwide and impacted more than three million people and thousands of communities by delivering reliable, affordable electricity to businesses and homes in diverse and difficult operating climates. The company recently announced an ambitious commitment to bring affordable and reliable energy to 100 million people globally by 2025.Based in Hong Kong, Asia Climate Partners (ACP) is a private equity fund supported by the Asian Development Bank (ADB), ORIX Corporation and Robeco Group.
ACP is also one of the largest private equity platforms for environmental finance emerging in Asia, with approximately US$440 million of investment capital to date.
The private equity fund is looking to partner with market-leading Asian businesses of significant growth in India, China and South East Asia with a particular focus on the clean energy, resource efficiency and environmental sectors.
Earlier this year, the mid-market private equity fund had acquired a stake in Indian cold chain logistics company ColdEX Logistics Pvt Ltd, the largest and fastest growing private company in the sector for an undisclosed amount.
For more information, please visit http://asiaclimatepartners.com.hk/
By Vivian Foo, Unicorn Media
For those who have enjoyed the seven seasons and 142 episodes under the ABC’s Shark Tanks, there is a new show that showcases entrepreneurs and their pitches as well, but with the backdrop set in the Philippines.
All caught on camera, the new show – I’m In – will feature local aspiring entrepreneur as contestants that will make business presentations to a panel of investors, who will later decide whether they are interested in investing or not.
The show will provide the platform and opportunity for entrepreneurs who have a great idea or solution to real-world problems but otherwise do not have the access to venture capital or a place to showcase their talent.
The format of the show is fairly simple, patterned after the United States Shark Tank. That is the entrepreneurs must introduce the investor panel their product, the amount of money they wish to raise and the valuation they demand. Afterward, it depends on the panel members if they wish to invest.
But beforehand, the contestant’s pitch and proposal is commented and questioned by the panel of investors who may ask tough questions about the business model. At times, the investor may even give a counter offer to the entrepreneur which may be lower than the valuation he or she is asking. But in the worst case scenario, where all of the panel members opt out, the entrepreneur will have to leave empty handed.
Despite that, participants of the show will definitely get a chance to market their idea to the world. That is a chance to become the next Breathometer, which since its Shark Tank experience in season 5, has secured an additional US$6.5 million in funding as well as a partnership with the prestigious Cleveland Clinic. But even if they don’t strike a deal with investors, the guidance and feedback received once adopted has seen most startups having a significant upside in valuations.
Additionally, the startup funding show will be hosted by Winston Damarillo, an enterprise transformation expert who is presently PLDT’s Capital Managing Director, and the Founder and CEO of digital and big data solution firms Amihan Global Strategies (AGSX) and Acalep. Winston Damarillo is also one of the co-chairman of OCEAN (Open Collaboration with East Asia New Champions), a biennial gathering of leaders across sectors in the Philippines.
“Our aim for the show is obviously to get this new breed of entrepreneurs to be funded by angel investors who are here because they have a very strong interest in supporting the next generation of entrepreneurs for the country,” Winston Damarillo, the host of I’m In said.
But as a whole, “I’m In” is created with the goal to create a funding event for indiepreneurs or people who are in businesses focusing on the creative economy such as those related to food, music, arts, fashion or technology like government transparency among others. Besides funding, the show could also help indiepreneurs get support in terms of mentoring
“At the same time, we are going to connect crowdfunding to venture funding.” Damarillo said. He noted the I’m In show is not about finding the next Facebook, Google, Uber, or Airbnb, but the next mass industry in the Philippines. “The goal is to fund hundreds of creative entrepreneurs which we think are severely underserved. They are industries that if we do well can accelerate and even improve the Philippines’ position as one of the fastest growing economies in Asia,” Damarillo said.
This is not the first time that a production house is launching a show based on the Shark Tank concept. India’s The Vault which aired in September is also based off Shark Tank. Furthermore, Shark Tank origins itself is also derived from a live funding TV show created by Sony Pictures in Japan in 2001 called the Money Tigers which was later renamed to Dragon’s Den.
Nonetheless, Philippines – I’m In is being crafted as a dual-screen show, intended to aired on TV and live stream online so viewers can interact and engage. The TV network that will carry the show has yet to be announced.
By Vivian Foo, Unicorn Media
Following China’s Meituan-DianPing valuation at US$18 billion and KFit’s double acquisition of Groupon’s Malaysia and Indonesia operations. We now move to the O2O sector in India, as Bengaluru-based HyperKonnect Technologies Pvt Ltd has raised a seed funding of Rs 6.6 lakh crore (about US$1 million) for their O2O shopping app platform – ShopsUp.
Two individual investors have participated in this round of seed funding, which are the former president of Huawei Technologies Co. Ltd and present Southeast Asia CEO of Taojinjia, Yang Shu and VR Logistics Ltd’s managing director and promoter, Anand Sankeshwar.
Founded by serial entrepreneur Suhas Gopinath, the app allows shoppers to search online and shop offline from nearby areas. The application also showcases various deals available at neighborhood stores as well as push notifications that are customized according to the users’ search preferences and history.
Despite a boom in e-commerce as seen in Alibaba’s Singles Day Sales or the recent Black Friday sales, India’s retail market which is expected to hit US$1.3 trillion by 2020 has only registered a compound growth rate of 16.7 percent since 2015. Thus, this clearly shows the significance of offline shopping which still retains in the habits of the consumers in the world’s second-biggest smartphone market.
With this, ShopsUp aims to bridge the gap between online and offline shopping by becoming a virtual shopping companion to millennials. With a promise of getting “high on shopping”, ShopsUp targets millennials who still prefer the traditional way of shopping from brick and mortar stores, targeting them with exclusive offers and discounts from their favorite brands and stores.
An additional feature available in the ShopsUp app is that the startup awards loyalty points called ‘shots’ to app users when they shop at partnering stores. This offers instant gratification via rewards that they collect through purchases and even walk-ins in store, collecting loyalty points which can later be redeemed for offers at selected brands outlet.
Some of the rewards that can be redeemed include free movie tickets, cabs rides, spas, or gift vouchers. ShopsUp has also partnered with Uber to provide convenience for buyers with their shopping runs. Besides, other ShopUps’ partnership include Adidas, Pepe Jeans, and Van Heusen, among some.
“Indian millennials want to be rewarded for their window shopping as well as actual shopping behavior, and marketers want to capture these moments as and when they happen,” said Suhas Gopinath, the co-founder and CEO at ShopsUp, “Use of analytics also allows us to partner with top brands and local boutiques and provide them with customized solutions,” he added.
The ShopsUp app is currently available for the Android platform while the iOS version is slated to come soon. Ultimately, the plan for ShopsUp is to use the smartphone to help brand and retail partners with data on a consume’s decision-making habits and choices by telling them where to shop as well as incentivizing the shopper to buy more offline, guiding them to find the right store and desired product while helping shops increase their walk-in rates.
In closing, other startups are also growing in the O2O sector in India. Such as Fashalot, which in April this year, has secured a seed funding round led by YourNest Angel Fund and angel investor Rajul Garg. In the same month, hyperlocal fashion commerce portal Yufta has also raised an undisclosed amount of capital in their pre-Series A. With that, one of the challenges that ShopsUp will face is the competition in this crowded sector, especially India’s largest digital wallet player Paytm, who is also tightening its hold in the O2O commerce space with its acquisition of Near.in last December.
For more information, please visit http://shopsup.com/
By Vivian Foo, Unicorn Media
KFit, a year-old service offering gym and healthcare services, has raised more than US$12 million from investors in its Series A funding round has announced today that it has acquired the Groupon Malaysia in an undisclosed deal. The startup is backed by Sequoia Capital India, 500 Startups, Southeast Asia Venturra Capital, SIG and Axiata Digital Innovation Fund.
The news was among expectations as three months earlier the company has acquired the e-commerce group’s Indonesia operations. whereby KFit says the deal is in line with its plan to become a leader in Southeast Asia’s online-to-offline space, short for O2O. Similarly, the company has also launched a deals app called Fave a few months ago whereby the functions of Fave are similar to Groupon.
The reason behind this series of acquisition and the pursuit of the offline-to-online model has been influenced by the signs of potential in China with China’s largest O2O player, Meituan-Dianping, raising US$3.3 billion earlier this year at a valuation of US$18 billion.
“Millions of local businesses are booming in China thanks to the adoption of O2O services, with hundreds of millions of consumers embracing these platforms as part of their day to day lives. The convenience and value benefits of these platforms are key drivers of this new norm. This future is inevitable for Southeast Asia and we hope to be at the forefront of this exciting shift,” KFit CEO and co-founder Joel Neoh said in a statement.
Neoh, the founder of Groupon Malaysia has previously helmed Groupon in Asia Pacific. With this, KFit said Groupon Malaysia will share a fate similar to Groupon Indonesia, whereby it will transition to Fave in early 2017. Essentially, this means that we will see it add new categories for fitness, wellness and other gym-related sectors to its current commerce business. KFit also said that it will retain around 90 percent of staff, with senior Groupon Malaysia executives likely to move on to new roles inside the company.
“This acquisition will see Groupon Malaysia transition to Fave in early 2017 and expand Fave’s offerings to cover restaurants, beauty, wellness, gyms, studios, hotels, holidays, leisure, entertainment, and professional services,” KFit explains.
Founded in April 2015, KFit started out by offering unlimited gym and fitness classes – akin to US-based US$400 million ClassPass – for a fixed monthly fee. It tweaked its model this year, limiting its membership to 10 classes per month, and then branched out into deals for services like massage, spa, beauty and salons as well.
With the present events unfolding, KFit is diverging and setting itself apart from its US predecessor. Instead of becoming a fitness sharing platform in Asia, the company now walks the path of becoming an O2O company as it expands to various other verticals such as food and restaurants, beauty and wellness, and lifestyle and activities. The platforms under the KFit Group – Fave, Groupon Indonesia and KFit – have connected millions of customers to thousands of offline businesses in key Southeast Asian market centers.
“With Groupon Indonesia achieving nearly 2 times growth since our acquisition, we are confident that the same growth principles will bring an exciting new local commerce offering to Malaysia,” said KFit co-founder and CEO Joel Neoh.
Post-acquisition, Groupon Malaysia, an e-commerce marketplace connecting millions of subscribers whereby local merchants will transition into Fave and cover restaurants, beauty, wellness, gyms, studios, hotels, holidays, leisure and entertainment as well.
KFit is a definite startup to note as the Malaysia-based startup within this less than one-year period has raised over US$15 million and is backed by high-profile investors such as Sequoia Capital and 500 Startups, among others.
For more information, please visit KFit at Crunchbase for the company’s timeline activity.
By Vivian Foo, Unicorn Media