Syfe Raises $30M Series B Funding

Southeast Asian Investment App Syfe Secures $30 Million Series B Funding

Investment applications throughout Southeast Asia are experiencing substantial investment, with several now securing swift follow-on funding rounds. For instance, Indonesian robo-advisor Bibit obtained $65 million in May, a mere four months following a $30 million growth round. Singapore-based Syfe has now announced the completion of a $30 million Series B funding round, occurring only nine months after its Series A. Furthermore, the company has declared that all full-time employees will be granted equity within the organization.

Valar Ventures Leads the Funding Round

The current round is spearheaded by Valar Ventures, which also directed Syfe’s Series A, signifying the venture capital firm’s initial investment in an Asian startup focused on fintech. Presight Capital and Unbound, both previous investors, also participated in this funding initiative.

This latest investment brings Syfe’s total funding to $52.4 million since its establishment in 2019. While the company has not revealed its Series B post-money valuation, founder and CEO Dhruv Arora informed TechCrunch that it represents a 3.6-fold increase from its Series A valuation. Although specific user numbers remain undisclosed, assets under management have quadrupled since January, largely attributed to user referrals and the introduction of new products such as Syfe Cash+ and Core portfolios.

Strategic Decision to Raise Additional Capital

“Frankly, we weren’t actively seeking a Series B,” Arora explained to TechCrunch. “We observed the positive results stemming from the resources of our Series A, successfully expanding the team and launching new products and options for our users.” He added that Syfe could potentially have postponed raising a new round for another six to twelve months, but investors proactively approached the startup with favorable terms. Following discussions, the company determined that securing the funding was strategically advantageous at this juncture.

Approximately 50% to 70% of new users each month are acquired through referrals from existing customers, resulting in remarkably low customer acquisition costs, according to Arora. The company has also doubled its Singapore-based team to over 100 employees since the beginning of the year, enabling exploration of diverse distribution strategies and partnerships. Currently, the app serves users in 42 countries, but actively markets only in Singapore, where it possesses a Capital Markets Services license from the Monetary Authority of Singapore (MAS). Plans are underway to announce a second target market in the near future.

Syfe’s Background and Growth

Founded in 2017, Syfe launched its application in July 2019. Prior to founding Syfe, Arora held the position of investment banker at UBS Investment Bank, subsequently serving as vice president and head of growth at Indian grocery delivery startup Grofers.

Despite relatively low retail investment rates in Southeast Asia, interest has surged considerably over the past year. A frequently cited reason is the economic impact of COVID-19, which prompted individuals to seek returns on their funds rather than simply maintaining savings accounts.

Shifting Savings Habits and the Rise of Investment Apps

“Throughout much of my career, spanning Hong Kong, Singapore, and parts of India, there’s been a strong cultural emphasis on saving,” Arora states. “This made sense when banks offered competitive interest rates, but now, most economies are experiencing negative real interest rates.” Coupled with increasing consumer familiarity with digital wallets and other online financial services, this environment has paved the way for investment apps to attract customers who might not have traditionally engaged with conventional brokerages.

Arora anticipated a growing interest in investing, but expected it to unfold gradually over five to seven years. Instead, this transformation is occurring at an accelerated pace. “I believe that tomorrow’s savings accounts will evolve into intelligent investment accounts. This has been our vision since Syfe’s inception, and the past year has demonstrated that this shift is inevitable and will occur on a larger scale. I foresee this trend continuing,” he asserts.

Expanding Demographic Reach

While many investment apps primarily target millennial users, Syfe’s demographic is broader. Arora notes a recent increase in users aged 50 and above over the last six to nine months, with the platform’s oldest user being 93 years old.

“Users in this age group represent a growing percentage, and typically possess greater disposable income. On average, customers in their 50s deploy nearly twice the amount compared to the more conventional demographic of 30 to 40 years old,” Arora explains.

Competitive Landscape and Future Differentiation

Among the numerous investment apps emerging in Southeast Asia, Syfe is frequently compared to Stashaway, Endowus, and Autowealth. Arora believes the market has ample room for growth, given the still-low levels of retail investment in the region. “It’s still very early in the game. There’s sufficient space for multiple players, and I anticipate further entrants into this domain, as achieving effective acquisition metrics can lead to a highly profitable business.”

To differentiate itself, Syfe is concentrating on the development of new products and the localization and personalization of user experiences, enabling customers to create more tailored portfolios.

Focus on Technology and User Experience

Syfe maintains a team of financial advisors for users seeking personalized consultations, but Arora emphasizes that most of Syfe’s investors rely solely on the app to guide their investment decisions. Over the past nine months, the team has added only one new advisor, prioritizing improvements to the user interface to enhance its intuitiveness.

“The human touch is optional, not essential, and often only needed to help users initially understand the offering,” says Arora. “However, our primary goal is to remain a technology company, and to develop an app so intuitive that users of any age, from 18 to 93, can utilize it with minimal assistance.”

In a press release, Valar Ventures founding partner Andrew McCormack stated, “Syfe was our first investment in Asia, and we’ve been impressed by its rapid, sustained growth over the past couple of years. The opportunity for the company to meet the saving and investment needs of a burgeoning mass-affluent consumer population in Asia remains significant, and we are confident that Syfe will continue to expand at pace.”

Update: Post corrected to reflect that the funding was in USD.