Retail News CRM

Category: Startups

Retail News Asia is committed to providing both local and global retailers with the latest Startup news throughout the Asian market. This on a daily base.

  • Uber to Cut 3,300 Jobs in Global Push Toward Robotaxis

    Uber to Cut 3,300 Jobs in Global Push Toward Robotaxis

    Uber Technologies is cutting roughly 3,300 jobs, or 10 per cent of its global workforce, to streamline management and fund an autonomous driving push. The retrenchment is the company’s largest round of dismissals since May 2020, when it shed 6,700 workers during the pandemic.

    Chief executive Dara Khosrowshahi announced the restructuring in a staff memo on September 2. The reductions target middle management rather than operational staff, with the company seeking to eliminate bureaucratic bottlenecks that slowed product decisions.

    Stripping Management Layers

    The overhaul cuts the number of workers positioned seven or more reporting tiers below the chief executive by 20 per cent. Internal teams with only one or two direct reports will shrink by nearly half, while several operational divisions will merge across regional hubs.

    Remote work will also contract sharply. Uber will cap fully remote positions at about 1 per cent of its total headcount while enforcing its existing policy requiring three days a week in the office. The platform finished 2025 with approximately 34,000 global employees.

    Unlike other technology peers cutting headcount this year, Khosrowshahi did not attribute the dismissals to artificial intelligence tools. Industry tracker layoffs.fyi recorded more than 123,000 tech redundancies across roughly 390 businesses in 2026, many citing automated workflow gains.

    Redirecting Capital to Autonomous Fleets

    Savings from the payroll cuts will help finance more than US$10 billion in planned autonomous vehicle investments. Uber wants to secure its position as a central booking marketplace for driverless fleets operated by external partners, countering threats from standalone operators such as Waymo and Tesla.

    Tensions with autonomous developers have escalated as suppliers expand their own direct-to-consumer networks. Waymo currently operates driverless vehicles through the Uber app in Austin and Atlanta, but it is rolling out into additional metropolitan areas independently.

    For mobility operators across Asia and Western markets, the transition to robotaxis threatens the traditional middleman fee structure built on gig workers. While Southeast Asian operators continue to rely on human drivers, platform valuations increasingly hinge on controlling autonomous dispatch software rather than maintaining large administrative headcounts.

    Uber shares gained 2 per cent in pre-market trading following the announcement, after dropping nearly 8 per cent earlier in the year. The company must now deploy its autonomous capital budget while renegotiating fleet supply pacts across key urban markets.

  • GetGo Launches Cross-Border Car Sharing from Singapore into Malaysia

    GetGo Launches Cross-Border Car Sharing from Singapore into Malaysia

    Singapore car-sharing operator GetGo rolled out a cross-border rental feature letting users drive vehicles directly across the Causeway into Peninsular Malaysia. The service gives drivers access to cars pre-registered with Malaysia’s mandatory Vehicle Entry Permit.

    Users can collect a car from local Singapore neighbourhoods and drive across the border to destinations including Johor Bahru and Kuala Lumpur. Unlike point-to-point cross-border taxis and ride-hailing services, the rental imposes no fixed route requirements or designated drop-off points during the booking window.

    How the Causeway booking works

    The feature, branded Drive to Malaysia, handles the regulatory paperwork required by Malaysian transport authorities before drivers leave the city-state. Each eligible vehicle comes fitted with a registered Vehicle Entry Permit RFID tag, avoiding the administrative delays that private vehicle owners face when securing cross-border clearance.

    Drivers retain full control of the itinerary throughout Peninsular Malaysia for the entire duration of their scheduled reservation. They pick up the car at an assigned Singapore bay and return it to the same spot once their trip concludes.

    Shifting border transit demand

    The service targets weekend shoppers, business commuters, and holiday travellers who previously depended on cross-border coach networks, licensed cross-border cabs, or private vehicle ownership. Cross-border transit across the Johor-Singapore Causeway ranks among the busiest land crossings worldwide, yet car-sharing models in the region historically restricted fleets to domestic borders.

    By clearing regulatory permit hurdles in advance, fleet operators open a new revenue line during peak travel weekends. The next operational test for cross-border car sharing centres on fleet availability and user adherence to Malaysia’s digital toll and fuel regulations during peak holiday travel periods.

  • Graas Raises US$17 Million and Buys Trustana to Expand Retail AI Tools

    Graas Raises US$17 Million and Buys Trustana to Expand Retail AI Tools

    Singapore e-commerce technology platform Graas has raised US$17 million in fresh capital and completed the acquisition of product data company Trustana.

    The transaction brings Trustana’s catalogue and product intelligence software directly into Graas’s automated operating system for consumer brands across the region.

    Integrating Product Data

    Graas builds artificial intelligence software designed to optimize inventory, ad spend, and pricing decisions across digital marketplaces. Adding Trustana, an enterprise data startup initially incubated by Temasek, gives the combined entity deeper capability in structuring product catalogues and syndicating retail data across fragmented sales channels.

    Brand operators across Southeast Asia frequently run concurrent storefronts on Shopee, Lazada, TikTok Shop, and standalone web platforms. Managing product data across those channels remains one of the most persistent operational bottlenecks in regional digital commerce.

    Consolidation in E-Commerce Tech

    Software vendors across the region are consolidating capabilities as enterprise clients push to trim their technology vendor counts. Graas previously expanded its footprint by acquiring specialized marketing and logistics analytics companies across India and Southeast Asia.

    RetailNews Asia views the deal as a clear shift away from standalone point solutions toward unified enterprise software suites capable of running daily merchant operations autonomously.

    Integration of Trustana’s data pipelines into the Graas platform begins immediately, with the combined software suite scheduled for enterprise rollout over the coming quarter.

  • Vietnam Fintech MFast Raises US$6 Million to Fund Philippines Expansion

    Vietnam Fintech MFast Raises US$6 Million to Fund Philippines Expansion

    Vietnamese financial services distribution platform MFast has raised US$6 million in Series A funding to expand its agent network and launch operations in the Philippines.

    Venture capital firm Wavemaker Partners led the round, with new participation from Tokyo-based Headline Asia and Thailand-based Finnoventure Fund I, managed by Krungsri Finnovate. Existing backers Do Ventures, Jafco Asia and Ascend Vietnam Ventures also joined the equity injection.

    Distribution beyond major metros

    MFast operates as a unit of Vietnam-based startup DigiPay, founded in 2017 by twin brothers Phan Thanh Long and Phan Thanh Vinh. The platform functions as an agent-driven marketplace selling insurance policies, consumer loans and banking products to retail customers.

    The business model relies on individual sales agents rather than physical storefronts. Traditional lenders and commercial brands routinely avoid opening physical branches in lower-tier cities such as Hue due to high real estate and operational costs. MFast uses mobile software to turn local individuals into commissioned sellers, bridging that retail gap.

    By August 2023, the network had grown to 160,000 active agents operating across all 63 cities and provinces in Vietnam. The company said it has connected more than one million consumers to financial products, while the number of income-earning agents rose 62 per cent year-on-year in the first half of 2023.

    Regional banking ties

    Consumer finance distribution in Southeast Asia has increasingly pivoted toward hybrid agency networks. Pure digital lending apps frequently face elevated default rates and high user-acquisition costs outside major capitals, making on-the-ground agent validation a practical distribution channel for commercial banks targeting lower-tier consumer markets.

    The startup has established distribution partnerships with international and regional lenders, including Singapore’s UOB, Thailand’s Kasikornbank, and SHB Finance, the Vietnamese consumer finance unit controlled by Thailand’s Bank of Ayudhya.

    MFast will use the capital to design bespoke credit products for segmented customer groups before launching its agency distribution model in the Philippines in 2024.

  • Zhipu AI Launches GLM-5.3-Flash After Stealth Trial on 100,000 Domestic Chips

    Zhipu AI Launches GLM-5.3-Flash After Stealth Trial on 100,000 Domestic Chips

    Beijing-based Zhipu AI launched its open-weight model GLM-5.3-Flash on Wednesday after running the system across a cluster of 100,000 domestic Chinese chips. The release followed an unannounced trial on platforms including OpenRouter and OpenCode, where the system processed 62 trillion tokens under the test alias Ox Alpha before its formal unveiling.

    Shares tied to the startup rose following the disclosure. Zhipu confirmed that the entire test deployment operated on domestic silicon rather than foreign hardware imports.

    Traffic Across Developer Marketplaces

    The stealth evaluation generated heavy traffic across international developer hubs over the past week. Users tested the then-unidentified Ox Alpha across code generation and complex task routing, driving sustained compute volume across the 100,000-chip array before Zhipu claimed ownership of the checkpoint.

    Releasing the architecture as open weights allows enterprise clients and independent software developers to download, modify, and host the model on their own infrastructure. That deployment model lowers operating expenses for commercial software firms looking to integrate natural language tools without paying continuous per-token API charges to proprietary providers.

    Domestic Compute Strategy

    Building massive cluster capacity on domestic processors addresses direct supply constraints that Chinese technology groups face under ongoing hardware export restrictions. Large tech firms across the mainland have traditionally relied on foreign graphics processors to train top-tier foundation models, but local alternatives are now taking on larger workloads.

    The performance of the 100,000-unit setup provides an operating template for other Chinese software developers seeking to decouple their deployment pipelines from foreign accelerators. Market attention now turns to downstream enterprise adoption rates and independent performance benchmarks against competing commercial models over the current quarter.

  • Supermom Raises S$18 Million to Expand AI Family Platform Across Southeast Asia

    Supermom Raises S$18 Million to Expand AI Family Platform Across Southeast Asia

    Singapore-based parenting network and consumer data platform Supermom secured S$18 million in Series B funding to expand its artificial intelligence capabilities across Southeast Asia. The round provides fresh capital to build out data infrastructure that links consumer brands directly to parents and family shoppers.

    The company runs a network connecting mothers and families with consumer goods manufacturers, market researchers, and retail brands. Its platform uses machine-learning models to analyze parenting behavior, product sentiment, and household spending habits, allowing brands to gather consumer insights and run targeted community campaigns.

    Scaling AI Across Southeast Asia

    Proceeds from the fundraise will fund product development and cross-border expansion. Supermom is building automated matchmaking tools that pair fast-moving consumer goods companies with verified parent communities across key regional markets, including Indonesia, Malaysia, and Vietnam.

    Regional marketing spend in the family and babycare segment continues to migrate away from broad social ad channels. Brand managers face higher customer acquisition costs on open networks, pushing marketing budgets toward closed, high-trust community platforms where purchase recommendations carry more weight.

    Brand Spending Shifts to Family Networks

    RetailNews Asia has tracked how consumer packaged goods giants across the region are reallocating retail media budgets to first-party data ecosystems. By controlling the channel from parent survey to direct product trial, platforms like Supermom offer brand clients measurable conversion metrics that traditional digital display ads miss.

    The company will now focus on rolling out localized data analytics suites for multinational consumer brands before entering additional Southeast Asian markets over the next twelve months.

  • Rose All Day Cosmetics Secures US$5.41 Million Series A Round

    Rose All Day Cosmetics Secures US$5.41 Million Series A Round

    Indonesian beauty brand Rose All Day Cosmetics raised US$5.41 million in a Series A funding round to finance its retail rollout and product line expansion. The company secured the financing as local cosmetics makers push for larger shares of Southeast Asia’s beauty and personal care market.

    The direct-to-consumer label plans to deploy the capital toward scaling its omnichannel retail footprint, improving product formulation pipelines, and bolstering distribution infrastructure across regional retail channels.

    Capital for regional distribution

    Founded to offer accessible daily beauty and skincare products, the brand built its initial customer base through online channels before expanding into physical retail counters, department stores, and beauty specialty chains. Direct-to-consumer beauty brands across Indonesia increasingly rely on physical shelf space to protect margins against rising digital acquisition costs.

    Offline distribution networks remain essential for consumer conversion in Southeast Asia, where physical storefronts and modern trade outlets still generate the bulk of personal care purchases. Securing shelf space in multi-brand retail chains gives local brands immediate access to foot traffic outside major metropolitan centres.

    Direct brand competition in Southeast Asia

    Venture investors continue backing local beauty startups in Indonesia, betting that domestic brands can defend domestic market share against legacy multinational operators. Similar consumer brand funding rounds across the region have targeted supply chain localization and regional export capabilities into neighbouring markets such as Malaysia and Vietnam.

    RetailNews Asia tracking shows that homegrown beauty labels in Jakarta face steepening competition for floor space in premium shopping malls and modern trade outlets. The next operational test for Rose All Day Cosmetics will be proving its unit economics across physical retail partners while managing regional inventory rollouts.

  • Indonesian Trading App Ajaib Raises $270 Million from Japan SBI Holdings

    Indonesian Trading App Ajaib Raises $270 Million from Japan SBI Holdings

    Indonesian online stock trading platform Ajaib has raised $270 million in a Series C funding round backed entirely by Japanese financial services conglomerate SBI Holdings. The transaction delivers one of the largest single equity checks into Southeast Asian retail financial technology this year.

    The capital injection gives Ajaib substantial runway to expand its wealth management and retail brokerage offerings across Indonesia. Jakarta has become a competitive battleground for digital brokerages seeking to convert first-time millennial and Gen Z savers into active market participants.

    Japanese capital targets Indonesian retail investing

    SBI Holdings has built a wide investment portfolio across Asian digital finance, backing regional digital banks, payment rails and cryptocurrency infrastructure. The group led the round directly, cementing a deeper balance-sheet commitment to Indonesia’s domestic capital markets.

    Southeast Asian fintech funding endured two years of compressed valuations and selective dealmaking following the 2021 market peak. A single $270 million commitment signals that large strategic investors are once again willing to write late-stage checks for established market leaders with deep domestic distribution.

    Expanding product lines across domestic markets

    Ajaib launched in 2018 targeting first-time retail investors through mobile-first stock trading and mutual fund distribution. The platform grew quickly during Indonesia’s retail investing boom, securing unicorn status in 2021 before adding digital asset products and margin financing services.

    RetailNews Asia notes that rival platforms across Jakarta and Singapore are racing to consolidate wealth management, bond distribution and consumer credit onto single interfaces. Japanese institutional backers like SBI provide both long-term capital and potential product partnerships as Indonesian regulators tighten compliance requirements for digital asset brokers.

    The company will deploy the capital toward platform security, customer acquisition and new asset management products ahead of scheduled regulatory reviews in Jakarta.

  • Wishlink Secures $17.5 Million in Series B Led by Vertex Ventures

    Wishlink Secures $17.5 Million in Series B Led by Vertex Ventures

    Indian creator commerce platform Wishlink raised $17.5 million in a Series B round led by Vertex Ventures Southeast Asia & India.

    The fresh injection gives the business capital to expand its creator network and deepen retail brand integrations across the country.

    Creator storefronts and brand integration

    Wishlink operates an infrastructure layer connecting social media creators directly with e-commerce brands and marketplaces. Creators curate personal storefronts, share trackable product links across short-form video and social channels, and earn commissions on completed orders. The model gives direct-to-consumer labels and large e-commerce platforms measurable sales attribution rather than unverified impressions from standard influencer campaigns.

    Performance retail drives venture interest

    Venture investors in South Asia continue to back commerce models where creator payouts tie directly to retail sales volume. Traditional influencer marketing budgets in India have faced tighter scrutiny over return on spend, leading consumer brands to reallocate capital to performance-driven affiliate channels. Vertex Ventures Southeast Asia & India led the transaction, expanding its portfolio of retail technology and digital commerce infrastructure companies across the region.

    Wishlink is deploying the new funds into tech infrastructure, automated creator discovery tools, and expanded brand onboarding across major consumer categories.

  • Asia-Pacific Startups Draw $2.4 Billion as Enterprise AI and Retail Tech Expand

    Asia-Pacific Startups Draw $2.4 Billion as Enterprise AI and Retail Tech Expand

    Early-stage companies across Asia-Pacific have secured a combined $2.4 billion in funding, with nearly $1 billion raised during 2026 alone.

    India led the regional cohort with 19 companies, followed by Singapore with 15, China with 10, Japan and South Korea with nine each, and Indonesia and Australia with eight apiece.

    Enterprise software and artificial intelligence providers account for almost a quarter of the group. Robotics suppliers, green technology providers and consumer commerce platforms took up most of the remaining slots across 16 countries and territories.

    Capital flows into retail networks and distribution

    Consumer-facing operators and supply chain software vendors pulled in fresh funding rounds to expand store footprints and digital trade across Southeast Asia and India. Mumbai grab-and-go chain Abcoffee doubled its network to more than 100 locations over the past year, serving 350,000 cups monthly before securing $6.4 million in pre-series B capital led by Kliff Ventures in May.

    Singapore supply chain platform Baskit raised $4.4 million in April in a series A round led by Cento Ventures, taking its total financing to $10 million. The company provides real-time order tracking, digital payments and credit tools to distributors, expanding from Indonesia into the Philippines this year.

    Indian discount brokerage Aaritya Broking secured $33 million in April through a series B round led by Accel India for its stock trading app Sahi. The platform charges 10 rupees per trade and has recorded more than 5 million downloads.

    Automation spreads to transport and operations

    Specialized mobility and infrastructure service firms also drew institutional capital. Melbourne autonomous vehicle developer Applied Electric Vehicles raised $40 million in January from Japan Post Capital and the Australian government’s National Reconstruction Fund to deploy driverless utility vehicles in mining and freight sites.

    Malaysian roadside assistance and battery provider Bateriku built a network of 1,000 mechanics and 2,000 repair shops across 270 locations before raising $7.4 million from pension fund KWAP and state-backed investors. In Thailand, maintenance provider 24 Solution Group closed $8 million across series B and B+ rounds after expanding from handyman services into electric vehicle charging systems and commercial solar installations.

    Venture investors in the region have shifted capital toward businesses with established commercial revenue, favoring workflow software and physical distribution infrastructure over cash-burning consumer acquisition models. RetailNews Asia tracks this transition as regional store operators increasingly buy software from local business-to-business specialists rather than building internal systems from scratch.

    Attention now shifts to the trial pipelines and regional market entries scheduled before the end of 2026, including Hong Kong biotechnology firm AIM Pharmaceutical International’s phase one clinical trials in mainland China for its Parkinson’s therapy.

  • Over Half of Southeast Asian Retailers Remain Stuck in AI Pilots

    Over Half of Southeast Asian Retailers Remain Stuck in AI Pilots

    More than 56 percent of consumer goods and retail companies across Southeast Asia remain trapped in continuous testing, unable to scale artificial intelligence into commercial production.

    While 8 percent of enterprises in the region have fully deployed AI initiatives compared to a 6 percent global average, retail operators lag behind banking and technology peers.

    Why Models Fail at the Border

    Across global retail, nearly 75 percent of AI projects fail to reach production deployment. Poor data quality accounts for roughly 85 percent of those collapses, compounded by the region’s mix of modern supermarkets, social commerce platforms, and traditional corner stores.

    A demand forecasting algorithm tuned on clean transaction records in Singapore often breaks down when deployed across Indonesian point-of-sale systems or Vietnamese wholesale networks. Without standardized data definitions across borders, multi-market rollouts stall before delivering operational cost cuts.

    Another 73 percent of failed retail AI programs lacked quantifiable performance metrics before launch. Broad mandates to improve customer personalization frequently dissolve without hard targets, such as cutting category stockouts by 4.5 percent across secondary regional logistics hubs.

    Regulatory Divergence and Vendor Risks

    Multi-market operators now run AI workloads across separate cloud platforms to mitigate operational outages. More than a third of large enterprises deploy five or more models in production, driven by concerns that single-vendor disruptions could halt real-time pricing and automated purchase orders across physical storefronts.

    Singapore and Vietnam have introduced comprehensive risk-based AI regulatory frameworks, while neighboring markets develop separate data residency rules. Retailers operating across Jakarta, Bangkok, and Manila face distinct local sovereignty laws that penalize centralized data models.

    For regional retail groups that expanded through rapid store acquisitions over the past decade, technical fragmentation creates the same operational drag that previously hobbled centralized enterprise resource planning rollouts. Successful operators are shifting away from standalone software pilots, requiring field managers to redesign replenishment and supply workflows around automated tools before approving cross-border rollouts.

    Regulatory compliance deadlines in Singapore and expanding data sovereignty enforcement in Jakarta will test whether multi-market retailers can maintain cross-border automated pricing and inventory pipelines through 2027.

  • Southeast Asian EV Startups Secure $622 Million Across 16 Top Firms

    Southeast Asian EV Startups Secure $622 Million Across 16 Top Firms

    The top 16 electric vehicle startups across Singapore, Indonesia, Thailand, and Vietnam have secured a combined US$622 million in equity funding, according to data from market tracker Tracxn.

    Singapore accounts for eight of the 16 funded ventures, serving as the primary financing and corporate headquarters base for regional operators despite its small domestic auto market.

    Fleet economics replace consumer car models

    Unlike Western and Chinese markets focused on passenger sedans, Southeast Asia’s electrification drive centers on commercial utility. The region’s core demand runs through two-wheelers used for daily commuting, courier runs, and food delivery logistics, alongside electric ferries and light commercial trucks.

    This operational split shifts capital allocation away from traditional high-speed charging corridors. Startups are directing resources into battery swapping networks, commercial fleet management software, and durable battery packs designed for high-mileage delivery work.

    Major venture funds and automotive strategists have backed the sector at Series A and Series B stages. Backers include Peak XV Partners, Jungle Ventures, GSR Ventures, Horizons Ventures, and Indian two-wheeler manufacturer TVS Motor Company.

    Industrial roles divide across four markets

    Manufacturing and market operations follow national industrial strengths across the four economies. Indonesia uses its nickel reserves to build battery and vehicle assembly operations, Thailand relies on its established automotive supply chain, and Vietnam provides growing domestic consumer demand.

    For regional retailers and delivery operators, the transition hinges on total cost of ownership rather than government subsidies. Fleet buyers across Jakarta, Bangkok, and Ho Chi Minh City require verified battery lifespans and reliable swap stations before replacing combustion fleets at scale.

    The next operational test for these 16 startups centers on contract renewal rates as initial pilot programs conclude without promotional pricing support.

  • Chinese Startups Show AI and Robotics Advances at Beijing Expos

    Chinese Startups Show AI and Robotics Advances at Beijing Expos

    Chinese artificial intelligence and robotics startups are pushing forward with public offerings, demonstrating advanced ‘robot bodies’ and ‘AI brains’ at recent industry events in Beijing. The World Robot Conference, held last Wednesday, featured various practical applications, including kickboxing robots and machines serving ice cream, as companies seek to boost investor confidence.

    Robotics on Display

    One notable participant was Shenzhen-based AI2 Robotics, which presented its AlphaBot. This robot, powered by the company’s proprietary foundation AI model, showed its ability to serve ice cream to visitors. Such demonstrations highlight the growing practical capabilities of AI in consumer-facing roles and potentially retail automation. The event serves as a platform for these startups to prove their real-world viability and attract further investment ahead of potential initial public offerings.

    The push for public listings reflects a broader trend among Chinese tech firms aiming to capitalize on investor interest in advanced technologies. The retail sector in Asia Pacific, in particular, stands to gain from these innovations, as robotics and AI offer solutions for everything from automated warehousing and last-mile delivery to in-store customer service and personalized marketing. RetailNews Asia has observed increasing adoption of similar technologies across the region, from automated checkout systems in Singapore to robotic warehouse solutions in Japan, indicating a growing readiness among businesses to integrate these advancements.

    The Race for Public Funding

    The urgency to go public underscores the competitive market within China’s robotics and AI industry. Companies are eager to secure capital for further research and development, as well as to scale their operations. The technologies on display, while diverse in application, all point towards a future where intelligent automation plays a more significant role across various industries. This includes potential applications for enhancing efficiency and customer experience within the retail and consumer technology sectors across Asia.

  • South Korea’s Startup Boom: How Flexible Digital Regulations Could Unleash a ₩2.4 Trillion Venture Capital Upsurge

    South Korea’s Startup Boom: How Flexible Digital Regulations Could Unleash a ₩2.4 Trillion Venture Capital Upsurge

    South Korea has the potential to draw an extra ₩2.4 trillion in yearly venture capital investment and launch numerous additional startups if it were to adopt more favorable digital regulations, a recent study conducted by Oxford Economics for Digital Prosperity Asia (DPA) suggests.

    The study claims that while digital regulations are vital to ensuring trust, security, and consumer protection, growing compliance requirements are exerting additional pressure on startups. This burden impacts their innovation capabilities, their potential to raise capital, and their ability to scale their businesses.

    Statistical modeling by Oxford Economics suggests that a more lenient regulatory framework from 2026 to 2035 could escalate the annual startup formation by nearly 15 percent, which translates to about 240 additional startups per year. It could also support around 21,000 startup jobs by 2035. In contrast, a tighter regulatory atmosphere could decrease startup formation by 8 percent and diminish annual venture capital investment by an estimated ₩1.3 trillion.

    Despite South Korea boasting one of the most robust startup ecosystems in Asia, the research indicates that regulatory design is increasingly becoming a crucial factor in future growth. While regulation is critical to building trust and safeguarding consumers, the economic implications are considerable. A more conducive regulatory environment could stimulate increased startup formation, lure more investment, and aid job creation over the coming decade, thereby ensuring South Korea maintains its status as a premier destination for digital innovation.

    The research was based on a survey of 500 participants in South Korea’s startup ecosystem, reinforced by expert interviews and economic modeling.

    The Increasing Cost of Compliance

    The study posits that compliance has shifted from a regulatory obligation to a significant business cost for many startups. The survey reveals that 86 percent of South Korean startups believe that digital regulation imposes operational constraints, with almost a quarter describing the impact as major or severe. Over 75 percent allocate more than 5 percent of their operating costs to compliance, with 44 percent spending above 15 percent of their operating expenses on meeting regulatory requirements.

    Nearly 80 percent of startups reported restructuring their operations to comply with digital rules, including adopting compliant cloud infrastructure, implementing new compliance processes, and leaning more on external legal and advisory services.

    The report also suggests that regulatory requirements are increasingly channeling resources away from innovation. Approximately 77 percent of startups reported that digital regulations had affected their capacity for innovation, while 58 percent had to redirect financial resources from research and development towards compliance. Almost half stated that regulatory obligations had caused delays in product launches or extended time-to-market.

    Investor Worries

    The study further reveals that digital regulations also impact fundraising. Half of the startups surveyed indicated that digital regulations create uncertainty about investment returns, thereby complicating the process of raising capital. Among venture capital investors, 58 percent claimed that regulatory requirements make expected returns less predictable. Half of them indicated that they would lessen their exposure to higher-risk startups if regulations became stricter.

    The study emphasizes the necessity of ensuring that regulatory frameworks are risk-based, proportionate, and practical, taking into account businesses of various sizes and stages. It concludes that the design of digital regulation will play an increasingly influential role in determining South Korea’s competitiveness as one of Asia’s premier technology and innovation hubs, particularly as policymakers aim to strike a balance between consumer protection and economic growth and investment.

    Questions & Answers

    What is the potential impact of more enabling digital regulations in South Korea?
    A more enabling regulatory environment could boost the annual startup formation by nearly 15 percent, equating to about 240 additional startups per year, and could support about 21,000 startup jobs by 2035.

    How are regulatory requirements affecting startups in South Korea?
    Regulatory requirements place operational constraints on startups, with compliance now representing a significant business cost. These obligations are increasingly diverting resources away from innovation and leading to delays in product launches or extended time-to-market.

    How do digital regulations impact fundraising for startups?
    Digital regulations create uncertainty around investment returns, making it more difficult for startups to raise capital. Regulatory requirements also make expected returns less predictable, causing some investors to reduce their exposure to higher-risk startups.

  • GoTo Sees Second Quarter of Profit, Fueled by Fintech Boom

    GoTo Sees Second Quarter of Profit, Fueled by Fintech Boom

    Indonesia’s leading ride-hailing company, GoTo, announced its second successive quarterly net profit on Wednesday. The positive financial outcome was underpinned by significant expansion in its fintech sector and continued fiscal prudence.

    For the quarter ending June 30, the firm posted earnings of 350 billion rupiah (US$19.40 million). This marks a significant turnaround from the same period last year, which saw a loss of 297 billion rupiah. GoTo’s second quarter net revenues amounted to 5.7 trillion rupiah, reflecting a year-on-year increase of 31%.

    Fintech Outperforms On-Demand Services

    The adjusted EBITDA of GoTo’s fintech operation, GoPay, experienced an impressive growth of over five times to reach 481 billion rupiah in the quarter. Intriguingly, this is the first time it has surpassed the company’s on-demand services, Gojek.

    GoTo also noted the potential impact of Indonesia’s cap on ride-hailing commissions, which came into effect on July 1. The cap is anticipated to affect Gojek’s two-wheel ride-hailing services – contributing to approximately 7% of its total net revenue – and could potentially impact third quarter earnings.

    Despite this, GoTo maintains its full-year adjusted EBITDA prediction of between 3.2 trillion rupiah and 3.4 trillion rupiah. This projection anticipates a reduced contribution from its on-demand services and a greater contribution from its fintech operations.

    GoTo’s first-half attributable profit was 607 billion rupiah, in contrast to a loss of 50 billion rupiah in the previous year.

    Sustained Profitability Through Cost Discipline

    The company attributes its sustained profitability to disciplined cost management, which was first flagged in the previous quarter. This approach has been effective in tandem with the implementation of its technology and AI strategy.

    Questions & Answers

    What contributed to GoTo’s second successive quarterly net profit?
    The profit was mainly aided by strong growth in its fintech business, GoPay, and a commitment to cost control.

    How has the introduction of a cap on ride-hailing commissions in Indonesia affected GoTo?
    The cap, which came into effect on July 1, might potentially impact GoTo’s third quarter earnings, as it affects Gojek’s two-wheel ride-hailing business.

    What is GoTo’s full-year adjusted EBITDA forecast?
    The company expects its full-year adjusted EBITDA to be between 3.2 trillion rupiah and 3.4 trillion rupiah, with a decreased contribution from on-demand services and a larger one from fintech.