Singapore wealth management platform Endowus secures $35M
In 2021 and early 2022, there was high investor interest in investment apps in Southeast Asia, and Endowus, a Singapore-based company, was one of them. They quickly raised two rounds of funding, a Series A in June 2021, followed by $25.6 million in follow-on funding just seven months later. Despite the current funding environment, which is less favorable for fintech startups, Endowus has announced another round of funding two years later.
Recently, the startup raised a whopping $35 million with the help of new investors such as Citi Ventures and MUFG Innovation Partners. With this latest funding, the company has now raised $95 million. The participating investors also include four of the wealthiest families in Asia, who have real estate and banking businesses across China and Southeast Asia. Among the returning investors are renowned firms such as Prosus Ventures, Lightspeed Venture Partners, UBS Next, Endowus employees Singtel Innov8, and Singapore’s EDBI.
Endowus has recently secured new funding that it plans to use to expand its operations in Singapore and Hong Kong. These two markets currently have over 100,000 clients that Endowus serves. The company’s total assets under management now exceed $5 billion, and its clients have saved over $40 million.
Despite facing challenges in the macroeconomic environment, Endowus reported an impressive 80% growth in organic revenue for the year 2022. Additionally, their group revenue tripled after the successful acquisition of Carret Private, a multi-family office. Endowus has been expanding its services, including the launch of low-cost passive index funds in Singapore and Endowus Private Wealth, which caters to high-net-worth individuals. This year, they also began offering their services in Hong Kong, distinguishing themselves as the only independent, commission-free, and conflict-free digital wealth advisor and low-cost fund platform.
According to Samuel Rhee, the co-founder and chairman of Endowus, the company has grown significantly and is now competing with large banks and other established players in the industry. Other investment apps in Singapore, such as Syfe and Stashaway, have also received substantial funding in recent years. However, Endowus sets itself apart by being the only digital wealth platform that serves both private wealth and public pension as the first digital advisor for Singapore’s Central Provident Fund Investment Scheme (CPF).
Endowus has over SGD $1 billion of pension assets under management on its platform. According to Rhee, this is because Endowus aims to cater to clients at all stages of their financial journey, including retirement planning, and not just personal wealth management.
Endowus has developed an in-house tech stack that enables a fully automated digital process for investors, specifically for CPF. The company also plans to apply this model to Hong Kong’s Mandatory Provident Fund (MPF). Endowus differs from other robo-advisors as it utilizes fund managers with a proven track record to make top-performing institutional-share class funds more accessible to retail investors.
Endowus solely relies on advisory fees as their source of revenue. Rhee, the platform’s representative, claims that they are the first and most extensive service in Singapore and Hong Kong to offer a full refund of trailer commission fees, which are repaid through cashback. When asked about the potential for consolidation within the investment app sector, Rhee stated that the opportunity for wealth tech companies remains significant. He cited a McKinsey report that indicates that the Asia-Pacific region currently accounts for at least 40% or $218 trillion of the world’s total wealth.
According to him, there could be more consolidation in the wealth industry in Singapore and Asia as these companies mature. Those without sufficient scale, technological innovation, or a competitive advantage will likely struggle, as seen during the recent economic downturn. This may result in some players exiting the market, while others may have to close down due to their small size.
During the recent slowdown in fintech funding, Endowus had no issues securing fundraising from its investors. They were fortunate to have some of the most prominent investors as shareholders, including Citi Ventures, MUFG Innovation Partners, and UBS.