We have led StashAway’s Series C round of USD16 million, joining forces with Asia Capital Group, Burda Principal Investments and Eight Roads Ventures to support the team’s mission to build the region’s leading wealth management platform.
This investment has been a long time coming…far too long! We had known the three co-founders Freddie, Michele and Nino for several years prior to investing, and watched in awe as they quietly executed towards building something unique and enduring across the region. It took us a while to convince them to let us be a part of their journey.
As with all our investments, our investment thesis was largely based on StashAway’s stellar team. Only in SEA will you find a Malaysian quant econometrician, a German technologist and an Italian ex-fast fashion founder come together to build a wealth management business. How does this make any sense? It makes perfect sense when you think about the vision of the company, and the skills and culture it will require in success.
SEA is a region on the rise, growing at one of the fastest rates in the World, creating growing prosperity for its citizens.
The region has not only one of the fastest-growing middle classes in the World, but also one of the youngest and most “online”. With this growing prosperity, people have an increased ability to generate savings and to build greater wealth over time through appropriately investing those savings.
However, the region is playing catch-up on several key dimensions. First, a much greater proportion of savings in the region are held as cash (or equivalent), which does not compound in value over time. Second, there is a paucity of simple, affordable options for consumers to learn about diversified investing and wealth creation.
StashAway aims to solve this problem by creating a wealth management platform that educates, delights and creates wealth for its customers over time at an affordable rate. The challenge is to combine an investment business, with all the fiscal and investing discipline that entails, with an experience that is consumer-centric, delightful, affordable and simple.
We love how the co-founders’ skills combine to make this possible. Freddy has built and managed multi-billion-dollar diversified asset portfolios for major global investors and brings deep investing expertise and rigour. Nino has built and run multiple tech and e-commerce businesses and products globally. And Michele brings to the team a deep understanding of consumer dynamics from his time deep in e-commerce at Zalora.
In venture, there are always lots of reasons to not invest. The list of what can go wrong is usually much longer than the list of what can go right. And in StashAway’s case the list of “criticisms” was quite compelling! We had heard it all before: low margins, powerful incumbents, high acquisition costs and increasing competition, to name a few big ones.
But what we try to understand more is what can go right, and in StashAway’s case that list was far more compelling:
Powerful macro tailwinds that will increase the need for offerings such as StashAway’s
An experienced and “fit for purpose” leadership team that is mission-aligned and driven to have a positive impact
Customers that love the product, and save more with the platform over time, and
Organic acquisition of new customers, leading to declining acquisition costs and accelerating growth in the face of a market that is allegedly becoming more competitive.
StashAway educates its customers about the compounding effect of diversified savings over time. That value creation also applies to its business model: more customers saving more of their wealth on the platform over time leads to compounding growth for the business. We saw this in the behaviour of incredibly sticky customer cohorts, contributing to an acceleration in StashAway’s assets under management.
We also saw this trend continue and accelerate through the ongoing COVID-19 pandemic: customers continued to trust StashAway with their investments even more during a time of great uncertainty.
The StashAway team has achieved a lot, and in coming months the market will learn more about some of its achievements. But what excites us most is that we are still only at the beginning of realising the potential the business has, and the positive impact it can create for millions of customers in years to come.
We are grateful to Freddy, Michele and Nino to give us a chance to join the journey. Ed and I have recently relocated to Singapore, and are also happy customers of StashAway! Looking forward to helping build something iconic over the coming years.