The past five years have been boom times for alternative lending companies in Southeast Asia, lending to unbanked or underbanked individuals, who account for 70% of the region’s population. Fintech investment platforms have quickly become important sources of capital, especially for small business owners. One example is the Singapore-based company Helicap.
Helicap founder and CEO David Zi Wang steps down after eight years at bank In the year In 2016, to establish the first investment company 33 Capital. But he realized that alternative lending is one of the most profitable sectors and looked for a way to enter this market using technology to expand financial participation in the region.
“In late 2017 and early 2018, we found that digital lending is growing at a very good pace,” Wang said. CASIA. “Not only what we call peer-to-peer (P2P) players, but also traditional lenders through microfinance.”
In the year In 2017, he teamed up with two friends, Quentin Vanokel and Jeremy Tan, both of whom have experience in the venture capital field, and founded Helicap.
The company facilitates loan capital for small and medium enterprises (SMEs) and micro business owners in Southeast Asia, Hong Kong and Australia by attracting capital from a network of investors such as family offices, impact funds, high profile investors and institutional investors. Investors. Its proprietary software provides big data analysis to evaluate potential investments, Wang explained.
Helicap aims to fill the $500 billion credit gap for SMEs by lending to 300 million unbanked and underbanked people in the region, according to the organization’s website.
Instead of lending directly to borrowers, funds are distributed through systems such as microfinance institutions or peer-to-peer (P2P) crowdfunding platforms, which provide the funds.
Wang said this method allows Helicap to reach more borrowers without doing extra legwork. “If we do it ourselves, we can only reach hundreds of borrowers. But if we go into our partners, where each holds, say, thousands of borrowers, we can reach millions.
The company is not at that stage yet. Currently, Helicap has reviewed more than 300 platforms, including micro-financiers, peer-to-peer crowdfunding platforms, and small and medium enterprises (SMEs) to gather information on potential investors. Helicap’s role is to provide investors with reliable and detailed analysis, Wang said.
Helicap uses artificial intelligence to crunch data sent monthly by its partners to normalize financial metrics such as loan book sizes and return rates. “We put [the data] To our system and we create reports [for investors] In minutes,” Wang said, noting that the same process “could take months” if done manually.
In the year In 2019, Helicap registered its fund management subsidiary Helicap Investments with the Monetary Authority of Singapore. This allows the company to perform regulated fund management activities with up to 30 accredited and institutional investors and up to SGD 250 million ($176 million) in assets under management. In the same year, Helicap acquired Arcor Capital, a capital markets services licensee to sell capital markets products.
The company has invested in 15 platforms so far, but Wang declined to share more information.
Helicopter services are available in Indonesia, Vietnam, Cambodia and the Philippines. Through Helicap’s platforms, the company has provided loans of approximately $40 million to more than 150,000 small and medium enterprises (SMEs) and individuals.
New business lines
In April, Helicap closed a $10 million Series A round led by Saison Capital, the venture capital arm of Japanese financial services company Credit Saison. The investment increased Helicap’s total capital to $18 million, Wang said.
The firm has partnered with Credit Saison for a pilot project in Southeast Asia, where Credit Saison will use Helicap’s credit analysis tool to identify debt financing opportunities. The pilot will focus on areas such as health or education that make a significant difference to consumers. Helicap will provide data analytics and technology services to Credit Saison, Wang said.
In the next few years, Wang plans to establish regional teams to expand into new Asian markets. The firm is working to improve credit analysis platforms to perform predictive analytics. Along with medtech and edtech loans, Helicap can also branch into other sub-sectors of personal finance, such as post-payment services.
This article is part of KrASIA’s “Startup Stories” series, where KrASIA writers talk to founders of tech companies in South and Southeast Asia.