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PayPal steps up efforts to incubate S-E Asian startups
TO SHED its image as "just a payments company", and affirm its commitment to be in the business of making other businesses better, PayPal is doubling down on efforts to nurture startups from Singapore and South-east Asia.
In 2019, PayPal plans to incubate 10 early-stage fintech startups from the region through PayPal Incubator, the incubator platform it set up in 2016 within PayPal's Singapore office.
PayPal's target of 10 startups for the next year is twice the yearly average number of startups it has supported in the last two years. Since its inception, PayPal Incubator has run two incubation programmes and nurtured nine startups, which works out to about five startups each year.
Jerry Tso, director of PayPal's Singapore Development Centre, told The Business Times: "As we embark on the third run, our priority is to keep our incubator programme running successfully for the long term, given the ever-evolving innovation landscape in the region and globally."
PayPal, whose corporate headquarters is in San Jose, California, more than a decade ago chose to site its international headquarters in Singapore. In 2016, PayPal also made Singapore its base for innovation with the launch of its first Innovation Lab outside of the United States. PayPal Incubator sits within this Lab.
Mr Tso said: "It is important that we're constantly improving the incubator programme to meet the needs of the growing startup community in Singapore and South-east Asia."
A recent improvement is abbreviating the length of each incubation programme from nine to five months, he told BT. This will take effect in 2019 and allow PayPal to run more programmes and nurture more startups within a year.
"We want to empower more of these emerging and ambitious players with the necessary tools that will advance their development, and ultimately foster collaborations and connections that contribute towards a more vibrant innovation ecosystem in Singapore and South-east Asia," said Mr Tso.
As part of the programme, PayPal will provide startups with co-working space in its Suntec City office, structured learning conducted by fintech industry leaders, mentorship from PayPal executives, and access to funding through PayPal's network and venture capital connections.
The nine startups backed by PayPal have reportedly raised more than US$100 million in venture capital between them. They include digital insurance app PolicyPal, cryptocurrency payment platform TenX and invoice financing company InvoiceInterchange.
Founded in 1998, PayPal is today a listed company on Nasdaq with a share price of about US$85 and market cap of over US$100 billion.
In its 2017 financial year, PayPal processed some US$456 billion in payment volume.
The company, however, wants to be known for more than just payments.
Michael Champlin, PayPal's innovation showcase manager at San Jose, said at PayPal's Innovation Lab Crawl event held in Singapore last week: "While most people know PayPal as just a payments company, we see ourselves as a security company."
Mr Champlin said that for one thing, PayPal examines as many as 150 data points before it validates and enables a transaction, so as to minimise fraud. Even in the event of a single red flag, PayPal may prompt a user to re-authenticate himself by logging into the platform again.
Asked how PayPal strikes a balance between ensuring security and reducing friction for its users, Mr Champlin said that while the company will "err on the side of caution", it will also provide a seamless workaround for its users when needed, such as a quick and simple re-login process.
Aside from partnering external startups, PayPal also looks inward for innovative ideas, said Michael Todasco, director of PayPal's San Jose Innovation Lab.
At PayPal's Innovation Lab Crawl event, Mr Todasco shared that the company recently launched a blockchain-based initiative, named WOW, to encourage in-house innovation.
WOW works by awarding innovative employees with tokens, which they can use to redeem for rewards such as a trail run with PayPal's chief financial officer John Rainey, or a car wash by Mr Todasco.
PayPal is also working on a new mobile feature - codenamed 'Black Adam' for now - that could potentially allow a user - who is watching a show on say, Netflix - to uncover via voice search what an actor in the show is wearing. The new feature will identify the piece of clothing in real time, ask the user for his size, and buy it for him using his PayPal account, said Mr Todasco.
When asked about the significance of this product to PayPal, he noted: "It addresses a unique problem that PayPal has the ability to solve for its users and partners. Today, people want to buy things in the moment. The trend is contextualised commerce. This is one of many ways PayPal is meeting consumers where they are."