Singapore startup YouTrip announced today that it has raised US$25.5m in its pre-Series A – making it the largest funding round for a fintech startup in South-east Asia.
Participating investors include major Asian family offices and venture capital firm Insignia Ventures Partners.
Launched in August 2018, YouTrip is regarded as “Singapore’s first multi-currency mobile wallet” with a prepaid Mastercard, which lets travellers enjoy 0% transaction fees (that typically range from 3-5% with other card issuers) and competitive exchange rates in over 150 currencies.
It has formed key partnerships with EZ-Link as the issuer of the YouTrip Mastercard, and Mastercard as the payment processor. YouTrip operates the programming and technology underlying the business. It has grown its team to 70 people across Singapore and Hong Kong.
YouTrip aims to address the lack of customer understanding regarding overseas transaction fees (71% of Singaporeans don’t understand how it works) and help them to save when travelling.
“When it comes to controlling the finances of your travel money, you don’t have very good choices… we created YouTrip to enable financial freedom for Asian travellers… letting you spend overseas with no fees, and get instant notifications on how much you spend and where – total transparency,” explained co-founder, Arthur Mak.
Its focus on the SEA travel market stems from its recognition of the region as one of the largest and fastest growing outbound travel markets in the world (with an estimate of US$80b outbound travel expenditure by 2020).
Said Caecilia Chu, co-founder & CEO, YouTrip, “As the regional travel industry continues to post robust growth, YouTrip recognises the pain points of travellers and equally, the immense opportunity to better serve their financial needs. We are dedicated to creating the best mobile financial services for travellers by simplifying overseas spending and creating a fuss-free travel experience.”
With its fresh injection of funding, YouTrip will develop its technology and technical payment infrastructure, as well as introduce new product features. It will also expand deeper into Southeast Asia.
To expand across markets, Chu explained that YouTrip’s key strategy is to localise its product and team for every market. “We’re going to invest in staffing a localised team, so we have local operations, customer service and marketing… we’re trying to mirror the demographics of the people and really understand [their] lifestyle needs.”
It also plans to form local partnerships that will help establish its credibility in the financial services space. “As a fintech business, the number hurdle we need to overcome is trust… for a fintech product, that barrier is high when you’re asking customers to share their identity and hard-earned money,” stated Chu.
On the technological front, Mak said the priority is to ensure that YouTrip has the flexibility to adapt and overcome any regulatory challenges that present as it enters different markets, to ensure the platform is scalable.
It also finds itself in a very lucrative sector as the region undergoes an ‘e-commerce wave’, as mobile payments become more mainstream.
“The mobile phone has changed the way we shop, order food, get a taxi and connect with friends, but the way we pay in foreign currencies is still in the stone age,” said Chu.
“The attractive part of the [SEA] market is not just the digital savvy but the rising middle class population. The need for financial services is growing,” said Chu. Tackling the “niche segment of cross-border payments is just a starting point.”
Working to improve the broader lack of financial infrastructure in the region is a long-term vision of the company, as YouTrip continues to grow its services and expand into new markets.
“Within two years YouTrip wants to be in all SEA markets… and monopolise the mind share of travellers, whenever they think about spending money in foreign markets,” envisioned Chu.
The free YouTrip app has been downloaded over 200,000 times and processed over one million transactions since its launch, but derives zero revenue from its user base. It monetises through a portion of the transaction fees paid by merchants to card processors – Mastercard in this case.
