Small and medium enterprises (SMEs) face a host of problems when scaling up. There may be a shortage of talent when these companies need to bulk up their teams, while poor administration and management may hamper their growth. Sensing an opportunity to solve these problems, four young entrepreneurs—Jin Choeh, Hyojun Lee, Jahun Koo, and Kit Hoong Tho—founded a Software-as-a-Service (SaaS) startup called Swingvy in 2016 to provide human resources (HR) services, payroll management, and insurance coverage for their clients.
Originally from South Korea, Choeh got the idea for Swingvy while he was working as a technical sales manager of Korean security software provider Ahn Lab, Inc., where he handled the company’s business in Southeast Asia.
“I spent most of my time in Singapore and Malaysia when working for my previous company. Most of our partners were SMEs, and I was surprised to find out that there was no proper B2B solution and software to accommodate them. Business owners spend most of their time on administrative tasks and paperwork, which could be simplified with the right digital solutions,” Choeh said to KrASIA.
Swingvy’s core service is to digitize all work related to HR management, like employee onboarding processes and leave approval. But recently, Swingvy’s services has been formulated into a more comprehensive platform that also manages payroll, claims, and benefits.
In 2018, Swingvy expanded into insurtech services by launching a feature to manage insurance benefits, setting it apart from other HR tech startups.
“B2B solutions are all about providing services that simplify a client’s business workflow, and many companies are having difficulties with managing their employee’s insurance claims. Swingvy serves as a corporate insurance agent that works with several insurance companies. We have insurance agent licenses in Singapore and Malaysia, so we can recommend and sell insurance, as well as help employees with their claims processes,” Choeh said.
Swingvy automates group plan insurance processes. This way, employees can submit their claims without filling out many forms or dealing with insurance agents.
In 2019, Swingvy’s revenue grew 380% from the previous year. Now, the company operates in Singapore, Malaysia, and Taiwan, and it has a research and development team based in Seoul. It works with 7,000 companies that have 20–100 employees each. This year, Swingvy is going to woo larger clients. It hopes to do business with mid-size companies that have up to 2,000 employees, Choeh said.
So far, the startup has raised USD 8.6 million in funding. In April 2019, Swingvy closed its Series A round led by Samsung Ventures, marking the Korean firm’s first investment in Southeast Asia.
The company implements a freemium business model. Clients can use Swingvy’s basic HR services for free, but they need to upgrade their subscription plans to use advanced features such as claims, payroll, and benefits management. “We monetize in two ways. First through the premium subscription model, and second is through insurance commission. So whenever customers purchase insurance from us, we receive fees from the insurance company,” Choeh said.
According to the company’s CEO, Swingvy’s subscribers slash 50–80% of their HR operational costs after adopting the platform, as they no longer need to hire as many HR agents or administrative personnel to manage the work.
Swingvy plans to launch a new product lineup this year to position itself as a “people operation platform.” It will double its head count, especially in R&D, sales, and marketing.
The aggressive expansion is meant to drum up more business in Swingvy’s existing markets, although the firm doesn’t rule out the possibility of expanding to new countries in the near future.
“We’re going to review where our next markets will be,” said Choeh. “There are three criteria for choosing the next market. First is the size of its SME market, as the new country needs at least one million SMEs. The second one is timing and competition; we wouldn’t choose a market if it already has a clear market leader in the B2B SaaS segment. The last one is the team’s capabilities, which is one of the reasons why we chose Taiwan as our third market, as we have highly experienced members there.”
“In addition, the country’s GDP per capita also impacts our decision. We believe that the magic GDP per capita number is USD 8,000,” the CEO said. “When the country hits at least USD 8,000 per year, its SaaS industry will potentially grow as there’s a realization that software increases business productivity at a cheaper cost.” Indonesia, Vietnam, and Thailand are definitely on their radar, although Choeh doesn’t have a specific timeline for moving into those countries.
Choeh is optimistic about the future of his company since there is currently no market leader for the B2B SaaS segment in Southeast Asia.
“Unlike B2C, where there might be a winner who takes all, competition in B2B is usually a bit more laid back, and the market for SaaS platforms is still wide open in the region. Our dream is that when new entrepreneurs set up their businesses, Swingvy would come first to their mind,” he said.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.