China-backed fintech venture fund CreditEase FinTech Investment Fund (CEFIF) is setting its sights on Southeast Asia, after investing in more than 60 companies in the US, UK, Europe, and China.
“We’ve been looking at Southeast Asia for the last six months now. We are now in active diligence with a few. We haven’t made any investments yet, but we will very soon,” said CEFIF managing partner Anju Patwardhan to an audience of corporates, startups and media professionals at a panel session during the Singapore Week of Innovation and Technology (SWITCH) conference on Monday. The conference was held from Monday to Wednesday this week.
She added that Southeast Asia as a region is “super exciting”, with lots of action and many opportunities. Patwardhan was responding to a question to the panellists on how they perceive Southeast Asia.
“So, for us when we look at fintech, I think Southeast Asia is at a very interesting inflection point. So far, we’ve invested in fintech companies in the US, UK and China, which are very mature markets in this space and Southeast Asia is just starting to emerge,” she said.
Patwardhan shared that from their US dollar fund they have 42 investments, 25% of which are now unicorns. “They were not unicorns when we invested in them and our fund is only three years old. In the last three years, many of them have become three, even four times what we invested at.”
She added that CEFIF is looking at investments in Southeast Asia with a similar lens on what it takes to become a unicorn, what it takes to scale and that they have found some very interesting companies in the region with really good technology.
“But I think there is some gap in terms of thinking of how to scale, thinking of how to become really big and how to sell, whether it’s institutional sales for B2B companies, or selling directly to customers for B2C companies,” she said.
Nevertheless, from their perspective, what is very fascinating in this region is the focus on financial inclusion. “I’m very pleased to see that it’s a much broader focus now, that’s been an area of interest for me for a long time. And you know, it’s nice that it’s going beyond just access to credit or just lending, into access to payments, insurance, and savings,” she explained.
She cited an example of the differences between the US, China and Southeast Asian payments spaces. “When you invest in a payment company in the US it’s typically about credit cards and when you invest in China, it’s all about QR codes. But when a company builds a solution in Southeast Asia, they have to think of credit cards, debit cards, QR codes, and different payment gateways. So it has a very different set of challenges. And a very different way of having to think about solutions in terms of different currencies, different languages, different architecture, and a different way to sell. So for us, you know, it’s been really interesting.”
CEFIF is a USD 500 million venture fund that invests in fintech companies around the globe. It is owned by CreditEase, a Beijing-based fintech conglomerate that specializes in inclusive finance and wealth management.