Deal focus: GoBear builds financial menu for Southeast Asia

Nearly two years into his role as CEO at GoBear, Adrian Chng (pictured) believes the financial technology start-up is ready to enter a new vertical – digital lending. To that end, GoBear acquired Philippines-focused AsiaKredit, which Chng previously helmed, last month. The deal will give GoBear access to financial data involving more than one million loans.

Previously, the start-up operated a financial comparison portal that covered insurance, credit cards and personal loans across seven markets (Southeast Asia plus Hong Kong).

It facilitated the sale of more than 150,000 insurance policies and partnered with some 100 regional and local financial institutions. Now GoBear wants to leverage what it learned when building customized insurance products for Southeast Asian consumers.

“Maybe an insurer has priced a travel insurance policy based on lost luggage and cancellation limits but it’s too high for a certain short-haul flight. We reduced those limits and the price based on data for users like you, so you get what you need,” explains Chng. 

Essentially, GoBear draws upon digital data available via smart phones and correlates it with previous financial activity to design financial products that are more relevant. The start-up prides itself on a smooth onboarding process and an asset-light channel for delivery and collections.

“It’s a bit like how low-cost airlines led to a huge increase in travel. You can begin to have a menu of options as a customer. As a new player, we don't need to offer everything a full-service airline offers,” he says.

GoBear recently raised $17 million from founding backers Aegon, a multinational financial services player, and Walvis Participaties, the VC arm of Dutch asset management firm Walvis Group, to support its expansion plan.

Nevertheless, consumer lending presents a host of new challenges, notably distinguishing creditworthy from noncreditworthy borrowers when most of them are local in less transparent markets like the Philippines and Indonesia. GoBear will offer lending-as-a-service solutions to partners in order to share the burden.

Oriente, a Hong Kong-headquartered financial technology start-up, has approached the same problem by relying on support from local conglomerates and building a heavy on-ground presence. It is one of few peer-to-peer and digital lending start-ups that operates across multiple markets.

Chng believes there’s room for one more. Given the lack of credit bureaus in the region, start-ups digitizing the lending process are enhancing financial inclusion. COVID-19 should also lead to greater awareness of digital solution providers like GoBear as well.

Meanwhile, there are synergies between the insurance and lending verticals that have yet to be explored. “It’s been shown in the US, for example, that credit rating scores are consistently predictive across products,” Chng says.

“For every hundred people who drive a car, we pay for the one person that crashes. For lending, we all pay a high interest rate for the two people that don't pay back.”

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• Topics
• Southeast Asia
• Early-stage
• Fintech
• Thailand
• Singapore
• Hong Kong (China)
• Philippines