As a former business analyst, Zac Liew understands that managing cash flows can be challenging, especially for small and medium-sized enterprises. Sometimes, customers don’t settle their balances on time. And, in general, collecting what’s owed by clients is a time-consuming process that may include multiple reminders.
Businesses recognize recurring payments in two ways—”push” payments that are submitted to the vendor and “pull” payments that are deducted from customers’ bank accounts by the service provider. In either case, SMEs are often short-changed. “Statistics were suggesting that 75% of all Malaysian businesses suffer from late payments, and the average time to get paid was close to 100 days,” Liew told KrASIA.
In particular, pull payments are “usually expensive and only utilized by large corporations, while the majority of businesses in Malaysia are SMEs,” Liew said. “We saw a gap there and an opportunity to offer a pull-based payment mechanism to give businesses better control of their cash flow.” This drove Liew to team up with co-founder Steve Kucia, who has expertise in banking and payments technology. Together, in 2018, they launched Curlec, a B2B fintech startup focusing on recurring revenues.
Curlec provides direct debit bank-to-bank payments facilities to businesses of all sizes. The startup builds systems on top of B2B payment infrastructure, including the national payment network PayNet and card networks such as Mastercard and Visa. Clients can integrate Curlec’s services into their transaction operations via a simple API or deploy an online dashboard where enterprises can initiate payment collections easily.
The platform also facilitates payouts, allowing merchants to schedule payments for suppliers, ensuring invoices are cleared on time. It also includes subscription management and billing automation software. “We do every piece of the jigsaw, offering a ‘Shopify’ experience for businesses looking to enter the subscription economy,” said Liew.
Curlec was one of the ten finalists of the Alibaba Cloud x KrASIA Global Startup Accelerator Malaysia Demo Day that was held on September 10.
The startup currently works with 500 clients. It processes around 1 million transactions each year, and the company’s revenue has been growing at a compound annual growth rate of nearly 500% year-on-year since 2018, according to Liew. “In the beginning, we focused on SMEs. For example, we worked with small and medium gyms and tuition centers—all businesses that have recurring customers and membership fees. Today, we serve mid-sized to large enterprises as well,” he said. Some of Curlec’s notable clients are insurance company AXA, fintech lending firm Funding Societies, and electronics retail chain Courts.
The global subscription economy, which involves any and all services that charge a monthly fee, is expected to reach USD 1.5 trillion in market value by 2025. The management of recurring payments is more important than ever, but few reliable solutions exist in Southeast Asia, Liew believes. “We see there is a shift to a subscription economy. We’re moving away from ‘Commerce 1.0,’ where goods are sold on a one-time basis, to ‘Commerce 2.0,’ where goods or services are sold on a recurring basis. This subscription business model gives predictable revenues to a lot of businesses we serve,” he said.
Curlec charges subscription and transaction fees from clients. Liew said the startup’s overall business has grown 400% since the pandemic, and it broke even in September.
The company is backed by Captii Ventures and 500 Startups. Liew expects to close a Series A funding round for Curlec by the end of this year. The firm will use the fresh capital to fund its regional expansion and build new software and financial service offerings. “In terms of new markets, we can’t name any names yet, but we are particularly interested in real-time payments. Malaysia, Singapore, and Thailand are all trying to democratize cross-border transactions using real-time payment rails. We are looking at these markets as we see opportunities for making payments or building value-added services on top of those rails,” Liew said.