Russia’s economic slump is set to boost the fledgling financial services technology (Fintech) startup ecosystem in Singapore and South East Asia.
Moscow-based venture capital firm Life.SREDA, that focuses exclusively on investments in Fintech mobile and internet projects, is pivoting to Asia, and moving its corporate headquarters to Singapore, executives aware of the developments told DEALSTREETASIA.
Global investment in financial technology ventures has more than tripled during the last five years – from under $930 million in 2008 to more than $2.97 billion in 2013, and will reach $8 billion by 2018, according to Accenture, a consulting firm. But a significant majority of these investments – as high as 83% – were cornered by US-based fintech companies, data compiled by Accenture, till 2013, reveal.
Life.SREDA is doing more than just taking up an office space in the city state. Several Russia based startups the venture capital firm has invested in, are also set relocate to Singapore.
Singapore will also be the base for SREDA to close its second fund.
Executives aware of the developments said the VC firm was currently raising its second vehicle – Life.SREDA II – with a target of up to $100 million, as it seeks to tap opportunities in technology-enabled financial services space in the region.
It has already begun making investments from its second vehicle. Life.SREDA II has invested an undisclosed amount in SumUp, an European clone of Square, and has also funded mobile bank Rocketbank. SumUp’s other investors include Groupon and Banco Bilbao Vizcaya Argentaria SA.
DEALSTREETASIA recently reported that Russia’s largest mPOS (mobile points of sale) service, LifePay, had entered the Southeast Asian market with its acquisition of iboxPro, which operates in Vietnam, Indonesia and Thailand.
This deal, whose size is rumoured to be around $10 million, was funded by Life.SREDA. LifePay is among the most successful investments in the venture firm’s portfolio.
While ibox was a brand created by international group of companies, with head office in Hong Kong, the deal will see the new entity – LifePay Global – becoming a Singapore-based company whose services will be available in Vietnam, Indonesia, Thailand and Russia. The combined entity has set itself a target of processing $40 million worth of transactions per month by the end of the year, a tenfold increase from its current $4 million, and also expand operations to China and the Philippines.
At present, Life.SREDA has invested all of the $40 million it had raised in its first fund across 15 different startups, and had also made some exits.
For instance, it had participated in US-based mobile bank Simple’s fund raising round around eighteen months ago, and had exited the venture last year when it was acquired by Spanish banking group BBVA for $117M. This had resulted in a ‘180% annualized profit” for Life.Sreda’, the company said.
The VC firm has also been investing in major fintech conferences such as Finovate, and has also been releasing comprehensive research reports on the sector to enhance its brand.