Singapore-based wealth management platform Endowus is in advanced talks to raise $20 million in its Series A round led by Lightspeed Venture Partners, with participation from SoftBank Ventures Asia.
According to sources privy to the development, Lightspeed is expected to contribute about $10 million to the pot, with the remainder is expected to come from SoftBank Ventures, and two other corporate firms.
Endowus is understood to have seen strong interest from Southeast Asian investors in the proposed round of funding. Sequoia Capital India and Temasek were also said to be among those who entered conversations, but eventually didn’t participate in this deal.
Endowus, Lightspeed Venture Partners, and Sequoia Capital India declined to comment on this story. DealStreetAsia did not receive a response from SoftBank Ventures Asia or Temasek by the time of publishing.
Sources indicated that Endowus’s assets under management (AUM) have ballooned over the course of 2020, with COVID-19 playing a large part in driving consumer behaviour towards building financial security and retail investing.
Endowus is also understood to be on track to overtake Singapore’s top player Stashaway by the end of this year. Endowus currently oversees $700-750 million in AUM in Singapore alone, while Eight Roads Ventures-backed Stashaway handles $1 billion across multiple markets such as Singapore, Malaysia and Dubai despite being operational for close to five years.
The proposed funding, said sources, will help Endowus ramp up customer acquisition, enhance its technology stack, and enter new markets such as Hong Kong.
Founded in 2018, 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 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 startups like Syfe, and traditional players like DBS Bank, Fundsupermart and iFAST Financial.
Stashaway and Syfe are two of the better-known venture-backed players with Stashaway last raising its $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 superapps 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 to 2024.