Fintech startup Jirnexu, a full-stack fintech solutions provider with roots in Singapore and Malaysia, has closed an extended Series A with an additional $1.5 million in funding, following $3 million raised in H1 2016. This brings aggregate equity funding the company raised to $6 million.
Jirnexu owns and operates RinggitPlus in Malaysia and KreditGoGo in Indonesia. It claims that its financial comparison sites see in excess of 1 million visitors per month, with a database of more than 550,000 consumers.
Jirnexu’s full-stack technology provides banks and insurance companies with a solution that manages the customer journey, dealing with domains such as marketing, acquisition, fulfilment and retention. The company reports financial institutions such as Citibank, HSBC, Standard Chartered, AIA, Zurich, Manulife and U4Life, as well as Malaysian banks BSN and RHB, among its customer base.
In terms of future funding, Jirnexu is currently embarking on discussions for a Series B it forecasts to be closed in early 2018, which is aimed at securing the leadership position of RinggitPlus.com, Jirnexu’s online financial aggregator in Malaysia. This Series B investment will accelerate the development of its technology solutions and implementation in its priority markets of Malaysia and Indonesia.
Yuen Tuck Siew, CEO of Jirnexu said: “RinggitPlus.com has grown to be Malaysia’s largest digital customer acquisition channel for banks, attracting more visitors than all other comparison sites combined. By leveraging XpressApply, banks in Malaysia have digitally issued over 40,000 credit cards and disbursed over RM150 million worth of unsecured personal loans to-date.”
He added, “Operating the only end-to-end technology platform for digital customer acquistion has enabled RinggitPlus.com to grow faster and larger than any other player. There is no way for competitors, or banks that rely on traditional people and paper-based sales processes, to scale to our size. Apart from expediting our rollout of XpressApply in both markets, we will focus on developing a proprietary risk scoring capability to provide better matching of consumer risk profiles with lenders and insurers.”
According to Siew, Jirnexu is currently looking to address consumers lacking access to credit, as well as those that are uninsured or underinsured, as part of a broader initiative to expand financial inclusion.
OSK Ventures is a Malaysia-based private equity (PE) company whose investment focus in Southeast Asia includes technology, education, consumer & retail, healthcare services and financial services.
Patrick Yee, Executive Director of OSKVI, said, “Jirnexu has proven its ability to leverage technology to scale its business model in emerging markets where fintech innovation is increasingly important. We are pleased to be on board this journey towards enhancing fintech innovations and offerings in the region.”
Market opportunity & growth
Sales commissions for consumer banking and insurance products in Southeast Asia alone are worth $25 billion per year, basd on research by the Swiss RE Institute.
Meanwhile, IDC statistics indicate up to $35 billion worth of multi-channel and distribution financial technology budgets in EMEA. Jirnexu is targeting this market opportunity through its XpressApply white-label solution, a proprietary platform that it explains is its key technology driver within the full stack solution.
Beyond being a solution that caters to online and mobile-first consumers efficiently and at scale, it also offers analytics for targeted strategies to fulfil and maximise the value of a consumer’s relationship over many years. According to the company, XpressApply helps banks increase ROI on marketing investment by up to 300 per cent by doubling conversions and productivity.
Asked about his growth, Siew told DEALSTREETASIA: “We have experienced terrific growth since inception. In product development, the breakthrough was with our proprietary platform XpressApply which enabled us to offer full stack solution to financial institutions. Besides rolling it out to the Indonesian market with the funding, we are also targeting the huge multi-channel and distribution financial technology budgets in EMEA with an XpressApply white-label solution.”
Siew highlighted that since launching its product XpressApply in 2016, it has “helped banks increase ROI on marketing investment by up to 300%, by doubling conversions,” in addition to hlpping Malaysian banks digitally issue over 40,000 credit cards and disburse over RM150 million worth of unsecured personal loans to-date.
Siew explained that, “From 2014 to 2017 we are on track for revenue CAGR of 70% and we expect to grow 100% in 2017 alone. Our financial comparison sites now see over 1 million visitors per month, with a database of more than 550,000 consumers.”
Asked about his exit strategy, Siew told DEALSTREETASIA: “We have successfully scaled our business model leveraging XpressApply, to deliver greater returns for our investors and we believe that this is a highly scalable model. Above that, we also see Southeast Asia as a high-growth market where opportunities are aplenty. While we do not rule out any exit options, we are now focussed on solidifying our leadership position in Malaysia, scaling our Indonesian business, and staying open to other markets.”
In an email exchange with DEALSTREETASIA, Siew also expressed optimism on the regions venture ecosystem, as well as the prospects for fintech growth in Malaysia. Edited excerpts:
What’s your take on the Malaysian and the larger ASEAN venture ecosystem?
The ASEAN venture ecosystem is overall healthy; Southeast Asia is becoming a hotbed for startups, albeit the region facing a more subdued economic climate. Although the number of deals and deal sizes last year was lower than the year prior, mainly caused by tightening of capital funds, we see 2016 as a year of normalisation after the spurt in 2014/2015 where most funding went into seed and series A rounds. With new VC entrants, we believe that the ecosystem is stable.
From a macro perspective, ASEAN has strong fundamentals – it has shown resilience against global headwinds and intense competition from China, still recording healthy GDP growth and relatively low inflation last year. It has a growing middle-income class that translates into rising affluence. There is also a burgeoning millennials population in emerging economies like Malaysia, Indonesia and Thailand, offering immense opportunities for technology adoption. These are major growth drivers for many ASEAN startups.
In terms of venture opportunities, the fast-evolving digital space and the growing mobile-first demographics in ASEAN are driving the innovation boom in Southeast Asia, attracting an inflow of venture funds that are focussed on the region’s growth. Investments are seemingly moving towards Fintech and e-commerce, which are industries that still have lots of room to scale. Last year, SEA actually saw the greatest number of fintech deals, largely attributable to seed and angel stage financing.
Governments are giving more support to creating VC-friendly environments, all in a bid to spur startup growth here compared to two or three years ago. For instance, ASEAN has collectively established a set of pro-business investment rules that give greater transparency, more protection and recourse to investors. The ASEAN Venture Council has also been formed to promote and develop the venture capital industry across the region.
However, even with these venture opportunities and government support, the region’s ecosystem requires a stronger push for growth stage funding. There are more seed deals than growth-stage funding. Initiatives by the governments could perhaps be more targeted in drawing growth-stage funding into the region if we want to maintain a healthy balance of funding opportunities for startups in various stages and to ensure scalability of these startups like Jirnexu, for example. The financing is also important in supporting and managing the development of startups from cradle to exit.
What do you see as the major growth sectors in the fintech space for the 2017-2022 period?
Looking at the prospects of e-commerce, B2C and B2B payments will certainly remain strong. P2P or alternative lending and social finance also look set to gain sturdier footing in the Fintech space. Insurance technology will be the next big wave.
Businesses that promote financial inclusion will also thrive. We are now studying the reasons for financial exclusion – why the majority of consumers in Southeast Asia do not have access to credit, and are either uninsured or underinsured. Given the focus on financial inclusion in emerging markets, operating an efficient channel of financial product distribution with our technology platform and customer data analytics, Jirnexu is well placed to address many of these fundamental challenges.
Given the focus on financial inclusion in emerging markets, operating an efficient channel of financial product distribution with our technology platform and customer data analytics, Jirnexu is well placed to address many of these fundamental challenges.
Where do you stand on Malaysia’s fintech space?
If you look at recent developments I’m very positive on the prospects for the Malaysian fintech space. Malaysia was one of the first countries in the region to launch a regulatory framework for P2P lenders. Bank Negara was one of the first regulators to launch their regulatory sandbox to enable fintech companies to operate outside existing rules.
The industry also came together at the end of 2016 to form the Fintech Association of Malaysia. Similar to other sectors, Malaysia is a great market for start-ups to build real businesses. The only challenge I foresee is that other regional markets with larger populations and GDP may more readily attract greater investment capital for high-risk high-reward business models.
What’s your take on Islamic fintech as a growth area?
The growth of Islamic Finance has been rather stable in the last two years, and the sector is embracing digital technology at a pace faster than many of their non-Islamic counterparts. These are indications that the sector is making positive strides into the Fintech space and it will be the new white space in Fintech.
In particular, Malaysia, being an important player in Islamic Finance on the global stage, will serve as a logical launchpad for Shariah-compliant products and services both within SEA and markets beyond. In fact approximately 25% of products on RinggitPlus/com are Shariah-compliant.
If you are in the Fintech space and in a market that supports Islamic Finance, it will be a loss not to capitalise on it. With more efforts pushing Islamic fintech, hopefully this sector will see more investments.
Any views on the cash flow vs profitability debate? Should a startup focus on growing its user base first or ensuring sustainable revenue first?
On cash flow vs. profitability, I can only comment on the two extreme scenarios – if I had to choose between showing a profit or generating positive cashflow then I would choose cash flow because you can’t pay salaries with paper profits.