The Singapore-based digital wealth manager completed a $16m (S$22.3m) Series C fundraising round earlier this week on 27 July.
Square Peg, an Australian venture capital fund led the financing. and was joined by Burda Principal Investments, the growth capital arm of German media and tech company Hubert Burda Media, and by existing investor Eight Roads Ventures, a global investment firm backed by Fidelity and early investor in Alibaba.
The fundraising lifts the firm’s paid-up to S$50.7m, according to Michele Ferrario, co-founder and CEO of Stashaway.
“This latest round will enable us to accelerate product development to both broaden and deepen our wealth management offering for our clients in Singapore and Malaysia, as well as support new market entry,” said Ferrario.
The firm has “a few country launches in the pipeline”, Ferarrio told FSA. However, the firm is still speaking with the regulators, so he cannot give specific details.
Stashaway, founded in 2016, is a digital wealth management platform that offers investment and cash management portfolios for both retail and accredited investors in Singapore and Malaysia.
Ferrario would not disclose Stashaway’s AUM, but said that assets have grown 4.3 times since a year ago.
The firm’s technology delivers automated, personalised portfolio management for client’s individual portfolios. It provides global growth-oriented investment portfolios targeting different levels of risk, and since its $12m Series B fundraising in July 2019, it has offered a yield-focused Income Portfolio that invests in ETFs, and StashAway SimpleTM, a cash management solution.
“We build our technology entirely in-house with a tech team based in our Singapore headquarters,” said Ferrario.
The firm gained a capital market services license for retail fund management from the Monetary Authority of Singapore, and received a capital market services license for retail fund management from Securities Commission Malaysia in November 2018.
Malaysia glitch
Unfortunately, in an embarrassing coincidence, Stashaway’s Malaysian business suffered operational problems on the same day that the firm announced its fundraising.
According to Vulcan Post, a Malaysian online media outlet covering start-up and digital news, several Stashaway customers in the country experienced multiple transfers of their automated monthly deposits to the robo-advisor on 27 July.
Apparently, up to 26-27 back-to-back direct debit transactions for each affected user took place, with Stashaway accounts linked to several banks, including CIMB, Hong Leong, HSBC and Maybank, as well as its collection entity, Citibank, according to Vulcan Post.
The glitch seemed to affect StashAway users based in Malaysia only, and Wong Wai Ken, StashAway Malaysia’s country manager, sent out emails to the victims informing them of the problem on the evening of 27 July, he told FSA.
“At 3pm yesterday, we sent out all of the funds back to our clients’ accounts and by 11pm, the majority of clients had received the full amount deducted, back in their bank account,” he said.
The firm intends to publish a detailed tech post-mortem in the next few days which will explain the root cause of the problem and how it will prevent a recurrence.
“As of now, what we can share is that the error seems to be related to an anomaly that appeared while transacting with Curlec, our direct debit service provider,” said Wong.
“For the disruption caused to the affected clients, we have applied a voucher that gives six months of free investing, [and have] taken the necessary steps to prevent this [problem] from happening again, he said.
Meanwhile, the Malaysian robo-advisory market is becoming increasingly competitive.
Rival services include Algebra, a shariah-compliant platform that is operated by Kuala-Lumpur based Farringdon Group, UOB AM’s robo-advisory service for corporate clients and BIMB IM’s platform, “Best Invest”, which focuses on shariah-compliant ESG investments.
