Syfe to launch in Hong Kong, double headcount by end-2022

Singapore

DIGITAL wealth manager Syfe is gearing up to enter the Hong Kong market in the next two quarters, with plans to also double its headcount by the end of 2022.

The Singapore-based robo adviser, which currently has about 100 staff since its launch in July 2019, is on an aggressive expansion track across Asia after closing a US$30 million Series B funding round last month that was led by Peter Thiel's Valar Ventures.

In an exclusive interview, Syfe chief and founder Dhruv Arora told The Business Times the firm is already eyeing new markets after Hong Kong as it navigates "final stages" of talks with several regulators.

"I think a few markets are very promising where we are expecting to launch, probably within the course of next year as well," he said.

Syfe recently onboarded four senior hires to lead its next phase of growth, including Jack Prickett, former UBS regional head of securities operations in Asia, and Samantha Horton, ex-managing director of Singapore-based hedge fund Broad Peak Investment Advisers.

Its customer base has grown about 20 times since 2020, with assets under management (AUM) up more than five times since the start of 2021. About 55 per cent of total AUM comes from customers between 31 and 50, Mr Arora told BT.

He did not disclose specific figures and said that growth had exceeded targets. The firm is now looking to mirror this success in Hong Kong, where the market is "somewhat similar" to Singapore in terms of population size and financial savviness among retail investors.

"When (we saw that) the opportunity or the need for wealth management was going to be across Asia, the market that had the most resonating aspects to Singapore was Hong Kong. That's why we feel that our product will be quite as successful there, if not more successful, as it has been in Singapore," said Mr Arora, formerly a banker at UBS in Hong Kong for about seven years.

Syfe looks to target Hong Kong's mass affluent segment between ages 25 and 45, and aims to launch products that are unique to the market on top of its existing offerings here.

Even as Hong Kong's political crisis continues, Mr Arora reckoned that the correlation between broader circumstances and need for digital wealth services "might not be as much as people think".

"We hope that things will get better as time goes by, but where we are at right now, we still remain committed to the market and remain committed to launching," he said.

In Singapore, the firm is launching a new "Select" portfolio early next month to complement its core investment portfolios.

Individuals can pick from five pre-curated themes - such as disruptive technology and healthcare innovation - to invest in, or choose to build their own portfolio, where they can pick up to eight ETFs (exchange-traded funds) from a repository of over a hundred ETFs.

"The idea is to give users that autonomy and that power to customise their portfolios to their own need cases," said Mr Arora.

On the do-it-yourself track, investors have the option to edit the ETF list in their portfolio and assign allocations to their liking. For example, if one is looking to get exposure to clean energy, the platform will filter out relevant ETFs to choose from.

"Rather than having (customers) know exactly what to buy, we've done the work for them, we shortlist three to five best options. Essentially, they can choose what they want and build up a portfolio. If that's too complicated, the most popular themes have already been pre-curated and they can just choose from those," said Mr Arora.

Management fees range between 0.35 and 0.65 per cent for the Select portfolio with no minimum investment amount.

Syfe joins many other digital wealth platforms and online brokerages that have had their bottom lines boosted by the global pandemic, as more people step up to manage their finances in a time of long-drawn uncertainty.

A recent survey by Franklin Templeton found that 80 per cent of individuals between 18 and 35 in Singapore are already investing, while almost 90 per cent are considering investing in at least one product in the next year.

Mr Arora observed that people were saving more money working from home, and also had more time to research accessible investment options in the market.

"There was always this (idea) that investing is only for the super savvy or the super rich. But now with technology, transparency and product innovation, there's the accessibility that we want. We have a customer who's put in S$10 and a customer who's put in S$5 million, and they have the same portfolio. That's truly democratising finance," he said.

In raising US$30 million in a Series B round last month, Syfe has tripled its valuation. It declined to reveal any figures. Data from VentureCap Insights as at July 8 places Syfe's post-money valuation at US$210.6 million.

This latest round, which comes just nine months after its previous financing, brings the total amount of money raised to US$52.6 million as at July 14.