Navigating the unpredictable waters of the tech ecosystem, especially during an economic downturn, requires strategic foresight, adaptability, and an unyielding focus on core business principles, said startup founders in a dialogue at DealStreetAsia’s Asia PE-VC Summit 2024.
Caesar Sengupta, CEO & Co-Founder of Arta Finance, Lim Wai Mun, Founder & CEO of Doctor Anywhere, and Caecilia Chu, Co-Founder & CEO of YouTrip shared their insights and personal anecdotes on building and scaling companies during a funding crunch.
They were speaking at a panel discussion titled ‘Founders’ take: Building and scaling through funding crunch’ on the second day (Sept. 18) of the summit in Singapore.
Recounting the pandemic days, Sengupta of Arta Finance said: “Surviving COVID-19 is way more impressive than surviving any funding winter.”
“Surviving COVID-19 is way more impressive than surviving any funding winter.”—Caesar Sengupta, CEO & Co-Founder, Arta Finance
He attributed the success of the digital family office to his team that targeted the largely untapped space in wealth management. “The quality of the team definitely helped sell it a lot. We’re also aiming for a large space,” he said, adding that the company’s foresight in anticipating the funding crunch and deciding to raise capital early provided a cushion against market volatility.
Arta Finance emerged from stealth mode in November 2022 and has raised over $90 million from Sequoia Capital India, Ribbit Capital, Coatue Management, and over 140 prominent angels.
Co-panellist Mun of Doctor Anywhere believes that focusing on the core business model and unit economics is crucial. He said that Doctor Anywhere, a Singapore-based health tech company, stuck to a positive gross margin approach and refrained from subsidising users.
“We have been very focused on generating a positive gross margin business… It’s very tempting for companies to compromise on their gross margins when competing for market share. During the good old days money was a lot easier to raise, but the market has turned, and some of the companies became not so sustainable and exited the business,” Mun emphasised.
“During the good old days money was a lot easier to raise, but the market has turned.”— Lim Wai Mun, Founder & CEO, Doctor Anywhere
Chu of YouTrip emphasised the need for adaptability. The Singaporean multicurrency wallet faced a catastrophic drop in business volumes due to COVID-19, but it pivoted by identifying new use cases through customer data. “We had to do a lot of soul searching and truly reinvent ourselves,” she explained.” “It took us something like COVID to realise the importance of having a diversified business.” Chu added.
In 2019, the Singapore-based multi-currency travel wallet raised $25.5 million in a pre-Series A funding round from Insignia Ventures Partners and other Asian family offices.
Core metrics and strategies to sustain and scale
Chu underscored the necessity for control over one’s direction and investment. “Gross margin economic business was something we always valued,” she said.
This principle sustained YouTrip through the COVID years, and the company continues to scrutinise expenditure, aligning every line item toward customer value and essential growth.
Sengupta, meanwhile, put it differently. By integrating technology, and guiding Arta Finance by the principles of sustainable growth, the company minimised its need to depend on colossal external funding.
“It took us something like COVID to realise the importance of having a diversified business” — Caecilia Chu, Co-Founder & CEO, YouTrip
He stressed the need for wise spending, framing decisions around a long-term vision, and investing in technology in a competitive fintech market. This strategy aligns well with the company’s goals, Sengupta added. “I cut back from a big marketing campaign,” he said, adding that the company is cautious on spending.
The AI landscape and new horizons
While acknowledging the transformative potential of AI, Caesar also warned of the competitive threat posed by AI-native startups. These companies operate with inherent efficiencies far superior to traditional operations.
“A startup that’s starting today that is 100% AI from scratch will fundamentally have an advantage over us,” he said, adding that Arta is pivoting significant resources towards flexible, regulatory-compliant AI solutions to sustain their competitive edge.
Mun of Doctor Anywhere elucidated the cautious route toward AI adoption. Automation is the precursor to effective AI integration, particularly when dealing with sensitive health data. “We look at our own operations and maximise automation first, then transition into AI to solve critical processes,” he said.
Managing AI’s trust factor within healthcare output is indispensable to ensure accurate and regulatory-compliant patient care. “If the AI starts to give wrong advice for consultation…that will be the end of the company,” he warned.
Chu of YouTrip, on the other hand, finds AI lucrative given its potential to bridge ecosystems. By connecting consumer and business users on YouTrip and driving holistic payment services, AI’s relevance becomes evidently applied in enhancing financial services environments, blending seamlessness while cutting across the boundaries of cost.
Future roadmaps
For Arta Finance, the next big milestone is becoming globally operational by leveraging Singapore’s global wealth hub status to capture diverse markets. Sengupta projects scaling its AI-driven features across geographies to deepen market penetration and fortify customer experience.
YouTrip, meanwhile, aims to expand into new markets, backed by existing successful multi-market models while advancing product features for better client engagement. Chu also added that her company will exploit network effects to enhance intra-platform payments and foster both consumer and business integrations for seamless global transactions.
Doctor Anywhere plans a decentralised healthcare approach, aligning community care capabilities, telehealth integrations, and specialised medical services to develop a holistic, patient-centric ecosystem.
By steadily developing decentralised surgical and post-operative care, Wai Mun foresees an epoch where hospital-level care becomes ubiquitously accessible. “The next stage for us is to look at a decentralised hospital ecosystem. It means that…you can actually have access to hospital-level care anywhere,” he said.
