tryb Fintech and Limited Partner Survey 2018
tryb conducted a survey in late October 2018 to obtain views from fintech companies and limited partners (LPs) on a wide range of topics, including market conditions, the fundraising environment and opportunities in Southeast Asia.
- Fintechs reported strong growth in their markets and are now focused on scaling and fund raising
- Over 40% of LPs are planning to increase investment into fintech investment strategies in 2019
- Nearly 75% of LPs were bullish on fintech in Southeast Asia with Indonesia as the most attractive market
- Payments, lending and enterprise technologies were the most attractive fintech sectors to LPs
- Strong demand from fintechs and LPs for investors with specific mandates and expertise in fintech
Both fintech and LPs were optimistic about Southeast Asian growth prospects and the fundraising environment. The survey found that most fintechs expect “moderate to rapid growth” in their markets, while nearly 60% of LPs reported that Southeast Asia is a “very attractive” market for fintech companies.
Herston Powers, Principal at tryb Group, stated “both limited partners and fintech entrepreneurs would like to engage fintech focused investors. The corresponding expertise, network and focused investment strategy of fintech investors may amplify capital put to work in early stage fintech investments.” Seventy percent of LPs reported wanting to have more access to fintech deal flow and fintech-focused investors.
“The insurance protection gap in Southeast Asia offers new possibilities for innovation in micro-insurance and community-based insurance, where new business models are about to emerge in e-commerce, auto, travel and health protection.”
Evgenia Voronstova, Senior Strategy PM at global financial services company
Over 90% of LPs surveyed agreed that fintech will support financial inclusion in Southeast Asia. Powers continued, “this aligns with a core tryb thesis that fintech and insurtech will help support digitization efforts and address the financing and protection gaps in Southeast Asia.”
The top priorities of fintech companies and their required support from investors may not be too surprising based on the early stage of fintech companies (product-market fit and scaling) in the region. tryb also collected quotes from fintech entrepreneurs on the topic of investor value creation.
“They should apply their network to the best usage of the portfolio companies. Their strength lies in their relationships and their ability to open doors that would otherwise remain closed.”
Fintech entrepreneur feedback on value creation from investors
Co-founder of tryb Group, Markus Gnirck, stated “Southeast Asian companies have raised some capital and are now putting efforts into scaling across the region. It is time to bring products to market and produce numbers for the next fundraising round.” Three quarters of fintech companies are currently fund-raising based on survey responses. He continued, “one of the most underappreciated challenges for entrepreneurs is balancing the effort needed to raise capital and managing a business to scale. Singapore has remained the ASEAN fintech capital with respect to number of fintechs, while Indonesia was selected by investors as the most attractive market in 2018.”
Powers concluded, “we are encouraged by the survey results and as an early stage fintech investor will use these insights to enhance our value creation framework for fintech entrepreneurs and interaction with the investment community”.
tryb surveyed over 85 respondents from a wide range of fintech (53) sectors and limited partner (33) segments.
Survey Results and Findings
Is your company currently fund-raising?
|As of the end of October 2018, 75% of fintechs were in fund-raising mode.|
Create a viable ecosystem for investee companies to leverage and derive value.
Investors should help founders balance short and long term goals, and be realistic as to what a given level of investment can achieve. Leveraging an initial investment to attract other investment is especially crucial in the early stages.
Fintech are looking for resilient investors who are able to invest in vision, team and products.
They should apply their network to the best usage of the portfolio companies. Their strength lies in their relationships and their ability to open doors that would otherwise remain closed.
Helping with knowledge and network is the most sensible place an investor can bring in value without trying to disrupt the whole business.
For additional insights including quotes directly from the surveyed fintechs and limited partners, contact us for the PDF version of the chartbook.
We would like to acknowledge the contribution of Evgenia Voronstova as one of the authors of this research. Evgenia is a Senior Strategy Project Manager at a global financial services company. She has over a decade of experience in banking, insurance and technology. We would also like to express our gratitude to Claudia Zeisberger for her feedback on this research. Claudia is the Senior Affiliate Professor of Decision Sciences and Entrepreneurship & Family Enterprise at INSEAD, and the Founder and Academic Director of the school’s private equity centre (GPEI). Finally, a special thanks to Lydia Ng and Ayushi Sharma for their assistance with this report.
For more information on the tryb Fintech and Limited Partner Survey 2018 contact Herston Powers.
 Limited partners are defined as organizations and individuals investing into funds and other non-direct investment entities. Investors are defined in this survey as organization and individuals that invest directly into fintech companies.