Singapore-based ShopBack, an online product comparison and rewards platform, has made its first acquisition. The company snapped up Seedly, which focuses on personal finance advice and expense tracking for young people.
The deal was made through a combination of cash and equity, but further details were not disclosed. Seedly will continue to operate under its own brand and will be looking to double its nine-people headcount by the end of this year, says CEO Kenneth Lou.
Founded in 2016, Seedly developed an app that allows users to connect their bank accounts and credit cards as well as get detailed reports about their spending habits.
On its website, community members can ask each other questions, while a blog dispenses advice and tips about topics like savings, investment, and so on. A review section features and compares several products and services, including mobile phone plans, peer-to-peer lending websites, travel insurance, and robo-advisors. The reviews are drawn from Seedly’s community of users, resulting in a Yelp-like platform for online finance.
The site has over 350,000 unique monthly visitors.
On the other hand, ShopBack began as a cashback-awarding platform for ecommerce. It then evolved into a platform for product comparison that covers ecommerce, online travel booking, credit cards, restaurant reservations, and more.
“We feel there’s a lot of room for improvement in our financial products,” says Ying Ying Wu, Shopback’s regional head of communications. “The Seedly team are the experts in personal finance, and through this deal we hope to learn more about how to further develop this vertical.”
ShopBack has a team of 150 and counts over five million monthly users across desktop and mobile. It has over 1,300 regional merchants on its platform. In terms of external funding, it has raised a total of US$40 million from investors like SoftBank Ventures Korea and the Mizuho Financial Group.
Consumers decide online
Apart from Seedly, other platforms such as MoneySmart, SingSaver, and The New Savvy also help users make more informed decisions about which financial products to use, based on the wisdom of the crowd.
“There’s a rising trend of consumers who now prefer to go online, not only to compare financial products, but also to seek advice from peers directly,” says Christopher Quek, managing partner at Trive Ventures.
This way, people can supplement opinions from financial advisors, who are usually perceived to be selling specific products instead of offering a balanced view. “Hence the need to check it out via peer reviews before committing,” Quek adds.
Lou believes that Seedly’s crowdsourced approach keeps the platform honest and makes it a “source of truth,” as the Seedly CEO puts it.
Access to the millennial crowd
Having Seedly on board gives ShopBack an extra window into the much-coveted millennial demographic. Lou says most of the startup’s audience belong to the 25-to-34 age bracket, which mainly includes young people just out of university. They’re about to or have recently entered the workplace, and are looking to boost their financial literacy.
A report (PDF link) conducted last year by Deloitte Consulting Southeast Asia shows that Asia is home to two-thirds of the world’s millennial population, whose total net worth is expected to reach US$19 trillion to US$24 trillion globally by 2020.
Millennials are more sophisticated about seeking financial advice and more receptive to services by tech platforms, according to the report. It also found that 59 percent of the young demographic in Singapore are open to financial products from non-traditional brands, and more than half of them validate their choices through advisors after doing their own research.
“Financial online platforms like Seedly will be a strong complementary feature to existing sales channels for financial institutions,” observes Quek. “The challenge, then, is how to find the right business model to monetize independent reviews and scale.”
Quek also highlights the challenge of scaling regionally across Southeast Asia’s diverse markets. “One might not be able to replicate and scale so easily into another market without truly understanding the localized needs,” he cautions.
That’s where ShopBack’s expertise will come in handy for Seedly, Wu contends. ShopBack is currently in seven markets in Asia Pacific, including Malaysia, Thailand, Taiwan, and most recently, Australia.
Local teams study their respective markets, looking at details such as which times consumers tend to do their shopping in one country versus another.
Last year, Seedly was raising a new round of funding when the team met with ShopBack. Seedly co-founders Lou and Tee Ming Chew weighed their options and decided to bring their company under ShopBack’s wing. The deal would get them a longer runway and some reprieve from having to monetize immediately.
Lou says that Seedly will eventually seek ways to monetize, most likely in the next year.
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