Syfe Raises $30 Million In Series B Funding Led By Returning Investor Valar Ventures

Syfe raises $30 million in Series B funding led by returning investor Valar Ventures

Southeast Asian investment apps are attracting significant funding, and some are now raising quick follow-on rounds as well. For instance, Bibit, an Indonesian robo-advisory app, raised $65 million in May, just four months after raising $30 million in growth funding. Now, Singapore-based Syfe is announcing the close of a $30 million Series B round, just nine months after completing its Series A. Additionally, the company announced that all full-time employees will receive equity in the company.

Valar Ventures is the lead investor in the latest round, as it was in Syfe's Series A, marking the fintech venture capital firm's first investment in an Asian startup. Presight Capital and Unbound, both returning investors, also participated.

This brings Syfe's total fundraising to $52.4 million since the company's inception in 2019. The startup did not disclose its Series B post-money valuation, but founder and CEO Dhruv Arora told TechCrunch that it increased 3.6 times from its Series A. Additionally, the startup did not disclose total user numbers, but assets under management have increased fourfold since January, owing in large part to user referrals and the launch of new products such as Syfe Cash+ and Core portfolios.

“To be completely candid, we weren't looking for a Series B,” Arora told TechCrunch. “We saw some positive outcomes from our Series A funding. We significantly scaled the team and began launching new products and options for our users.” Syfe probably could have waited another six to twelve months to raise another round, he added, but its investors approached the startup again and offered favorable terms for another round.

Each month, approximately 50% to 70% of new users are acquired through referrals from existing customers, which keeps Syfe's acquisition costs extremely low, Arora says. Additionally, it has doubled its team in Singapore to more than 100 people since the start of the year, allowing the startup to experiment with new distribution strategies and partnerships. Although the app has users in 42 countries, it is currently only active in Singapore, where it is licensed by the Monetary Authority of Singapore to provide Capital Markets Services (MAS). It intends to announce a second market in the near future.

More You need to know about Syfe

Syfe was founded in 2017 and launched its mobile application in July of this year. Prior to founding Syfe, Arora worked as an investment banker at UBS Investment Bank and as vice president and head of growth at Grofers, an Indian grocery delivery startup.

While retail investment rates in Southeast Asia remain low, interest rates have increased significantly over the last year. One of the most frequently cited reasons is the economic impact of COVID-19, which encouraged people to invest their money rather than keep it in savings accounts.

“I spent the majority of my career in Hong Kong, Singapore, and parts of India. I believe that we have always been told culturally to save, save, save,” Arora says. “It made sense because banks were offering competitive interest rates, but now the majority of economies are experiencing negative real interest rates.” This, combined with consumers' growing familiarity with online wallets and other digital financial services, paved the way for investment apps to enter the market, attracting customers who might not have otherwise visited traditional brokerages.

According to Arora, he anticipated that people would become more interested in investing gradually over the next five to seven years. Rather than that, the shift is occurring much more rapidly. “In my opinion, tomorrow's savings accounts will evolve into smart investment accounts. That has been my position since we founded Syfe, but the last year has demonstrated that it must occur, and at a much larger scale. As a result, I believe that this wave will continue,” he says.

While many investment apps cater to millennials, Syfe caters to a broader demographic. According to Arora, the platform has seen an increase in users aged 50 and older over the last six to nine months, and its oldest user is 93 years old.

“Those users have increased in number, and the reality is that they typically have more disposable income. According to our experience, the average customer in their 50s will deploy nearly twice as much as the more conventional demographic of 30 to 40,” says Arora.

When comparing investment apps in Southeast Asia, users frequently compare Syfe to Stashaway, Endowus, and Autowealth. According to Arora, the space has significant growth potential due to the region's low level of retail investment. “I believe we are still very early in the game. There is sufficient room for multiple players, and I believe that more will enter this domain, because if acquisition metrics are optimized, this can be a very profitable business.”

Syfe differentiates itself through new product development, user localization and personalization, which enables customers to create more customized portfolios.

Syfe has a team of financial advisors for users who prefer one-on-one consultations, but Arora says the majority of Syfe's investors make their investment decisions entirely through the app. It has added only one new advisor to its team in the last nine months, focusing instead on improving the user interface.

“The human touch is optional, but it is not required, and in many cases, it is required only once to assist people in comprehending the offering,” Arora explains. “However, our goal will always be to be a technology company, and for the app to become so intuitive that anyone, whether they are 18 or 93, can use it with very little guidance.”

“Syfe was our first investment in Asia, and we've been impressed by its rapid, sustained growth over the last couple of years,” Valar Ventures founding partner Andrew McCormack says in a press statement. The opportunity for Syfe to serve the saving and investment needs of Asia's growing mass-affluent consumer population remains significant, and we are confident that Syfe will continue to grow at a rapid pace.”