Singapore-based wealth management platform Endowus has raised S$23 million ($17 million) in a Series A round led by Lightspeed Venture Partners, with participation from SoftBank Ventures Asia.
This is the first time the fintech startup has raised funds externally since it launched in end-2019, Endowus said in a press statement. The fresh funds will help it develop its Singapore business, and enter into new markets, starting with Hong Kong. Its platform is currently only open to Singapore-based investors.
Endowus claimed that despite the pandemic, its clientele grew 20 times in 2020, while the value of assets it manages grew eight times, and will likely meet its target of S$1 billion in assets under management (AUM) in Singapore by the second quarter of this year. DealStreetAsia previously reported that it has $700-750 million in AUM in Singapore alone.
“As the first-and-only CPF [Central Provident Fund] digital advisor, Endowus is clearly the leader in digital wealth, has a differentiated business model, and has the strongest team in the WealthTech space in the region,” said Cindy Jin a partner at SoftBank Ventures Asia, which has a portfolio of more than 250 companies and 17 funds.
Endowus is led by Samuel Rhee, You Ning Sun and Gregory Van, former investment bankers and fund managers from Morgan Stanley Asset Management, Goldman Sachs, UBS and others.
The firm bills itself as Singapore’s first and only Central Provident Fund (CPF) digital advisor, allowing users to invest their CPF and Supplementary Retirement Scheme (SRS) money, as well as cash.
CPF and SRS are compulsory retirement savings schemes mandated by the Singapore government for future retirement purposes for Singaporean citizens and permanent residents (PRs).
Users have access to a range of institutional funds on Endowus’s platform from which they can invest their money, including passive index funds like Vanguard, Dimensional, and PIMCO. It also recently launched several Environment, Social & Governance (ESG) funds, which retail investors can access.
It has a 0% sales charge, rebates 100% of trailer fees to clients; and charges a flat access fee of 0.25% to 0.60% per annum. Endowus is a Monetary Authority of Singapore (MAS) licensed advisor and a strategic partner with UOB Kay Hian, one of Singapore’s largest and major brokers.
Apart from Endowus and Stashaway, other players operating in the country’s wealthtech market include names like Stashaway and Syfe, and traditional players like DBS Bank, Fundsupermart, and iFAST Financial.
Stashaway and Syfe are two of the better-known venture-backed players. Stashaway raised a $16 million Series C round last July led by Square Peg, and Syfe last raising a $18.6 million Series A led by Valar Ventures.
Southeast Asian super apps like Grab and Gojek have been eyeing the market in recent months as well. Grab last announced its acquisition of Singapore-based robo-advisory Bento in February 2020, marking its foray into wealth management.
Experts expect to see tremendous growth in Singapore’s wealthtech and robo-advisory sector in the coming years. Statista projects AUM in Singapore for the robo-advisor segment to grow by an annual rate of 25.3% to hit $2.62 billion by 2024. Users are also expected to grow substantially by 83% to 192,500 between 2020 and 2024.
“Endowus will use the additional resources and the support of our VC partners to go deeper and broader in the Asia market where we want to continue helping all investors achieve their investment goals,” said the startup’s co-founder Rhee.