Southeast Asia’s online-to-offline (O2O) space is hot. Platforms linking online customers with offline services are now part and parcel of daily life, from the likes of well-backed Go-Jek and Grab, to Fave – one of the region’s most exciting new O2O companies.

Fave started out in 2015 as a fitness sharing platform called KFit before stepping into multi-category local commerce with the launch of Fave. The company is connecting millions of customers with thousands of local service businesses including restaurants, cafes, salons, spas, hotels, gyms and more.

Founder and CEO, Joel Neoh, talked to us about their journey and how they have found working with Kindrik Partners.

the Fave story

Fave’s founders Joel Neoh and Yeoh Chen Chow are no strangers to O2O local commerce. Joel started Groupsmore, a daily deals site that was acquired by Groupon in 2011. Joel went on to head up Groupon’s business in APAC, alongside Chen Chow, who led Groupon’s regional operations.

Spotting an opportunity to disrupt the fitness business in APAC, Joel left Groupon to start KFit, the region’s first-ever fitness sharing platform, touted as an Uber style platform for gyms and fitness studios.

After a year of tremendous growth and raising a US$12m series A financing, the company set its sights beyond the fitness space and launched its multi-category platform. It went on to acquire Groupon’s businesses in Indonesia, Malaysia and Singapore.

According to Joel, the pivot to a broader O2O platform was a natural progression for the company, as multi-category local commerce presented a much larger business opportunity. Joel observed that apps with high-frequency use cases tend to succeed in a competitive landscape. Fave was launched with a focus on the food and drink category – a major part of life in Southeast Asia.

Whilst deals businesses have been around for a while, Fave is focused on merchant-first innovation via deeper product development and data science. All with a view to enhancing the customer experience with daily deals and rewards. Joel notes that the traditional deals model only brings in new customers to offline businesses and stops there. To truly add value to local businesses, Fave wants to create an ecosystem where businesses can acquire, retain and re-target customers in the online world.

working with kindrik partners

Lee Bagshaw started working with Joel from the set-up of what was the KFit business in 2015. As well as advising Fave on its VC financing rounds, Lee and Chris Wilson have helped Fave on the three M&A deals relating to the acquisitions of Groupon’s Indonesian, Malaysian and Singaporean businesses.

Joel says that Kindrik Partners provided insightful and comprehensive legal advice that played a key role in helping Fave reach some major milestones. He specifically notes Kindrik Partners team’s considerable expertise in VC and tech M&A, which helped the company efficiently navigate the documentation negotiating during its funding rounds and the Groupon transactions.

The future of O2O commerce in Asia looks bright in Southeast Asia as new generation of digitally savvy consumers come online. Kindrik Partners looks forward to helping Fave continue its rapid journey to become a leading O2O player in the region.

Explore Fave.

[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]

Fintech startups are the next big thing in the Southeast Asian tech scene. Kindrik Partners client C88 (formerly Compare88) is racing ahead of the pack after securing the backing of high-profile VC investors including Telstra Ventures.

C88 provides online financial services price comparison tools, helping consumers to compare the offers of major brands for products such as credit cards, personal loans, mortgages, vehicle loans, savings accounts and insurance. The company also offers a brokerage service, enabling consumers to purchase products directly on the C88 platform – for which C88 has secured relevant financial services licences through Southeast Asia.

Founder and CEO, J.P. Ellis, talked to us about the company’s background, its most recent series B financing round, and how they have found working with Kindrik Partners.

the c88 story

Prior to C88, founders Karl Knoflach and J.P. worked in private equity, finance, operations and leadership. The C88 senior team also consists of Gary Empl, a professional software developer with over two decades of experience leading teams in the creation of cutting-edge software in the financial services industry. Karl and Gary were part of the original founding team of einsurance.de in Munich in 1999 – a revolutionary company in the German insurance space which later became Check24.de, the German market-leader.

C88’s commercial teams in Indonesia, the Philippines and other markets are made up of senior bankers, insurance executives and sales operators with many years of experience in financial products sales and distribution. This experience, and the networks that senior team members bring, is crucial to C88 maintaining its market leader position.

J.P. notes that the Southeast Asian economy’s migration to digital begin with communities moving online for social needs. This was followed by online purchasing of physical goods, usually electronics and clothes, then travel bookings, followed more recently by financial services. This migration began in earnest in 2009, and by 2011 there were already major e-commerce providers. Online channel emerged in the insurance vertical in 2013, and C88 followed quickly releasing its platform in 2014.

J.P. observes that high traffic digital marketplaces, such as C88’s CekAja.com brand in Indonesia and eCompareMo.com brand in the Philippines, benefit consumers as well as underwriters. C88 can use its volume to create pricing efficiency for their customers. That volume also reduces the overall cost of acquisition for underwriters. Prior to the emergence of financial services e-commerce, banks and insurers basically only had two options for sales in the large markets of Southeast Asia: branches or physical agents. Digital sales through C88’s platform provides a highly cost-effective alternative.

challenges

Southeast Asia remains highly fragmented. Operating a multi-jurisdictional structure that is attractive to both consumers and providers, while keeping national regulators on-side, is challenging.

The company also faces the challenge of creating a common culture across national teams. Incentivising teams in different verticals and across countries to work together to solve problems creatively is an ever-evolving process of creative leadership and problem solving.

J.P adds that fortunately, C88’s team are multi-lingual and truly love what they do. It is not at all uncommon for them to log long hours during the week and weekends, because they genuinely enjoy what they do in building systems and solving problems for consumers in the region.

working with Kindrik Partners

As well as advising C88 on its venture capital financing rounds, Kindrik Partners’s Lee Bagshaw and Chris Wilson have helped C88 implement a variety of business critical structures including inter-company, cross-border licensing agreements and intellectual property documentation.

J.P says that Kindrik Partners provided high-quality and competitively-priced legal services in the critical areas of C88’s business. J.P. particularly appreciated the level of support he received when negotiating and completing the company’s recent Series B round led by Telstra Ventures – he says that the Kindrik Partners team know venture capital deals inside out, and made the negotiation of the financing documentation a breeze.

Kindrik Partners looks forward to helping C88 to continue its journey to become a leading fintech player in Southeast Asia and beyond.

Explore C88.

[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]

mClinica is a Singapore-headquartered health-tech company which provides data, analytics, and patient engagement tools for healthcare organisations in Southeast Asia. In 2017, mClinica closed a USD$6.3million series A financing round, with Kindrik Partners advising the company.

Founder and CEO Farouk Meralli talked to us about mClinica’s journey to date and working with Kindrik Partners.

the mClinica story

Whilst working for multinational pharmaceutical companies, Farouk identified issues in the healthcare sector in emerging markets. Pharmaceutical companies and public sector entities (NGOs and governments) lack access to consolidated data that similar companies in developed markets have. This is particularly so in Southeast Asia where pharmacies are mainly independent owner-operated businesses rather than the large branded chains that you see in established markets.

This led Farouk to start mClinica to connect pharmacies on a common mobile platform. The company launched in the Philippines in 2013, and has since expanded to Indonesia, Vietnam, Thailand and Malaysia.  By the end of 2017, mClinica had connected over 60,000 pharmacy professionals and 12,000 pharmacies on a single digital platform. This platform now addresses several challenges in healthcare including education and engagement of pharmacy professionals, pharmacy-driven patient programs, and last-mile data.

Farouk recently received the Public Health Innovator Award from Harvard University for his work with mClinica, and was the youngest ever recipient of the award.

challenges

Due to the fragmented nature of the healthcare industry in Southeast Asia, developing mClinica’s products was no easy feat. Farouk had to recruit healthcare professionals who also had expertise in mobile technology, engage with lots of government agencies and regulators, and develop products that were flexible enough to work in different health contexts. However, Farouk’s patience and vision has paid off, with its pharmacy network now reaching approximately 80 million patients per month.

The business has also been through some financing rounds and other corporate transactions along the way, which Farouk admits can be a big distraction from the day job of growing the business – like all entrepreneurs, he just wants to focus on solving real problems for end users.

raising a series A round

mClinica’s series A round was led by Silicon Valley fund, Patamar Capital (formerly Unitus Impact), and joined by UK based Global Innovation Fund, MDI Ventures, and Endeavor Catalyst. Existing investors also took part in the investment round.

The cap raise was to help mClinica grow faster and enter more markets across Southeast Asia.  By 2017, mClinica had a good profile in the regional tech and healthcare scene, and was known to investors.  The company therefore had the luxury of picking investors that had knowledge of the healthcare space and would offer the best long-term strategic value.

In the end, mClinica was able to secure investment from well-known international investors, all of whom believed in the vision of transforming healthcare in Asia. A term sheet followed, and once a lead investor was committed, was agreed fairly quickly.

Farouk described an important aspect of the transaction was discussing the term sheet openly with all interested parties from the outset. This included existing seed investors who required careful management to avoid roadblocks later in the deal process.

working with Kindrik Partners

mClinica has worked with Lee Bagshaw since the incorporation of the business, including advising on seed funding deals with Kickstart Ventures, Spiral Ventures (formerly IMJ Investment Partners) and 500 Startups. Kindrik Partners has helped the company with other corporate and commercial matters, aside from the series A deal.

Farouk says: I believe mClinica was one of Lee’s first clients in Southeast Asia. Therefore to some extent we’ve been on the journey together in what is an exciting but challenging digital market. We feel like we’re in safe hands with Kindrik Partners. The team is very easy to work with and their VC transaction experience is second to none.

what’s next?

Since completing its series A financing, mClinica has continued to expand its pharmaceutical network, work on product development and grow its team. Right now, the focus is still on Southeast Asia, but mClinica’s products are also suited to many other developing countries worldwide.

As a transformative health-tech company operating in emerging economies, we’re proud to have been a part of Farouk’s journey to date.  The digital economy in Southeast Asia will play a great role in improving healthcare delivery over the next decade and mClinica is leading the way.

[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]