When one door closes
- In the midst of the pandemic, 500-backed online marketplace Carousell’s business model was disrupted, but it saw silver linings and golden opportunities for both the startup and its users.
- Co-founder Lucas Ngoo shared that while users were not able to meet up for transactions, the startup expedited partnerships with several delivery partners to offer shipping solutions and discounted shipping rates.
- According to the interview, Carousell ended up “playing a big role in helping people make ends meet”.
- Lucas revealed more than US$1 billion worth of secondhand items were transacted across the platform between February to June 2020.
- In another interview, Carousell Malaysia’s country head Tang Siew Wai shared surprising shifts on their platform. One of those was advertising revenue being fueled by smaller advertisers as bigger brands reduced their media spending.
- Fashion and luxury goods that once led sales numbers have been replaced by toys and games, gym equipment, home decorations, and electronics. During the lockdown from February to June 2020, the startup recorded 1.2 million searches for Work-from-Home equipment.
- During the same period, Carousell’s study found that the average Malaysian made US$336.76 selling on the platform, with over 690,000 transactions for second-hand items.
- The startup enabled Malaysian small-to-medium enterprise (SME) owners to continue operating, with the #TetapBuka Online Ramadan Bazaar during the Muslim fasting season, allowing the sale of food items on its platform and the #TetapBuka Carousell Business Grants worth US$247,000.
- Carousell also worked with the Ministry of Domestic Trade & Consumer Affairs to control the prices of face masks and hand sanitizers. Siew Wai said the platform’s AI flags prices that go above the ceiling.
- When asked if Covid-19 derailed any of Carousell Malaysia’s plans, Tang said the opposite occurred. “It accelerated everything,” he said, noting that daily traffic increased by 17%.
- He added that Carousell is in talks with e-wallets as potential partners to make the platform more seamless.
Digital banking without smartphones
- 500-backed Fairbanc, a fintech startup that offers credit to the unbanked in Southeast Asia, received backing from Columbia Business School’s student-run impact fund Microlumbia.
- According to a statement, Fairbanc relies on data science and machine learning to automate credit scoring and risk monitoring, allowing it to provide loans instantly. The startup said the service doesn’t require collateral, credit history, smartphone ownership, or digital literacy. Instead, credit can be accessed through a one-time passcode sent to merchants via a text message.
- The service was piloted in Bangladesh in 2019, and Fairbanc later rolled out the platform with Unilever Indonesia. The startup claims participating outlets saw a 40% growth in sales through the program, and over 1100% year over year growth in merchant counts.
- With such partnerships, the startup expects to reduce the risks of loan defaults significantly while scaling quickly by leveraging existing merchant networks of established brands.
- According to a study, more than two-thirds of businesses in the micro, small, and medium enterprises in developing countries have no access to finances from the formal financial sector. The unmet need for credit is estimated to be in the range of US$2.1 trillion to US$2.5 trillion.
- “The speed and size of the micro-merchant transactions make it challenging for banks to service this segment because their transactions tend to be small and largely not traced,” said Khailee Ng, the managing partner of 500 Startups.
- Currently, approximately 80% of Fairbanc borrowers are unbanked and around 70% are women merchants.
- With the new funding, Fairbanc plans to continue expanding in Indonesia. Globally, the country is home to the fourth-largest unbanked population, with 95 million adults still lacking a formal account at a financial institution.
Rewriting the rules of hospitality
- Three Hong Kong brands — 500-backed Prenetics, Black Sheep Restaurants, and Tatler — have organised a unique New Year’s Eve celebration at five Black Sheep Restaurant establishments.
- Mandatory Covid-19 testing will be provided at Prenetics stations near each restaurant. The cost of testing is included in the ticket price.
- Prenetics is known for its rapid Covid-19 testing kit it acquired from the University of Oxford, which can return accurate results within 30 minutes.
- This initiative enables a safe and worry-free celebration for all guests, as the companies seek to create a new blueprint for the hospitality sector to bring travel and large-scale events back into society.
- The New Year’s Eve celebration is the first of an ongoing collaboration between the three brands which pledged to restore the public’s confidence in dining out.
- Check out the menu and tickets here.
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500 Startups is a venture capital firm on a mission to discover and back the world’s most talented entrepreneurs, help them create successful companies at scale, and build thriving global ecosystems. In Southeast Asia, 500 Startups invests through the pioneering 500 Southeast Asia family of funds. The 500 Southeast Asia funds have backed over 240 companies across multiple sectors from internet to consumer to deep technology. It continues to connect founders with capital, expertise and powerful regional and global networks to help them succeed.
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