With travel halted, YouTrip charts new path in e-commerce, B2B payments

Singapore

WHILE travel is on hold, multi-currency wallet operator YouTrip is not standing still. The Singapore-based startup plans to expand its travel wallet into a broader digital payments app, while also entering the business-to-business (B2B) space.

To fuel this new direction, it is set to double its Singapore headcount, hiring for over 50 new roles in engineering and product development over the next year, chief executive Caecilia Chu told The Business Times.

The company, which has close to 100 employees globally, is also setting up an innovation lab in Singapore.

"As a startup, it's really about adapting continuously and aligning our efforts, energy, investments, and most importantly, our product portfolio, to the most promising opportunities at that time," said Ms Chu over a video call.

Asked about YouTrip's funding, she replied that the company is in a strong financial position. "Through Covid-19, we have shored up our balance sheet further without actually announcing a funding round to the market," Ms Chu said, without sharing specifics.

YouTrip previously disclosed a US$25.5 million fundraise in 2019 from Insignia Ventures Partners and undisclosed family offices.

Founded in 2018, YouTrip operates a multi-currency card - with Mastercard - and e-wallet. Prior to Covid-19, its focus was on the consumer travel market. The pandemic has upset this use case, but YouTrip is now pivoting.

It is now focused on two big projects. The first is a refresh of its existing travel wallet into a broader digital payments app. Beyond a new brand identity, the YouTrip app will also hold more popular currencies.

There is also a "big partnership" in the works that will bring new financial products on the platform, Ms Chu said, declining to reveal more details.

The second project is YouTrip Business, a multi-currency corporate credit card for companies, especially SMEs, performing cross-border payments. Businesses will also be able to issue multi-currency cards to employees and streamline expenses on one platform. Credit terms will be offered to selected business account users.

The two products are now in development and scheduled to be launched in early 2022.

Both consumer and B2B payments are cut-throat spaces. The e-wallet space is a red ocean, with numerous players fragmented across South-east Asia. The recent closure of Razer's e-wallet highlighted the cash burn required to operate in this space. Meanwhile, Internet giant Sea has been muscling in with an aggressive expansion of ShopeePay. And banks themselves have rival offerings.

Despite the stiff competition, Ms Chu said that the company has been encouraged by user behaviour: many users have switched to using YouTrip for online shopping, especially on international sites like Taobao, where they seek competitive exchange rates. Between July 2020 and June this year, YouTrip saw an 84 per cent rise in online overseas purchases by Singaporean users.

"I do agree that the competition is going to be strong, but I think on the overseas and forex piece, we are still doing strong. In the last 12 to 24 months, we haven't seen new players enter into that space too, so I think we're still solid," Ms Chu said.

YouTrip maintains bank and non-bank forex partners with a deep liquidity pool in the region, to maintain competitive rates. As transaction volume increased in the past three years, it was also able to get better wholesale rates from partners, she noted.

YouTrip similarly hopes to stand out with competitive exchange rates in the B2B credit card space. Given that this is new territory for YouTrip, the company is conducting in-depth research on SMEs' forex needs. In fact, this is a "Covid-enabled opportunity", Ms Chu said, as SMEs have become more cost-conscious.

Ms Chu and her co-founder, Arthur Mak, had an "aha" moment when they were having a chat with heavy users of the product. "One of the users actually told us that he has been using our consumer card for his company in paying overseas vendors; our rates are the best and we are extremely easy to use. And he said that, because our limits are quite low - with S$5,000 wallet limits and S$30,000 annual limits, he needs to get his friends, family and colleagues to sign up for the card for his business use."

With the upcoming rollout of YouTrip Business, Ms Chu is confident that the company can unlock a new earnings stream with startups and SMEs.

According to data platform VentureCap Insights, YouTrip posted US$4.8 million in revenue for the year ended March 2020, with a US$11.8 million loss. Ms Chu declined to comment on specific financials, while adding that the data does not fully reflect consolidated financials.

Asked about her outlook on YouTrip's financials, Ms Chu is confident that e-commerce and B2B payments can mitigate the hit from the travel standstill. The pandemic has been an important stress test, she reckons.

"What the experience has taught us is how to be able to pivot and turn on a dime; how to move the entire ship to a new direction when we actually have to. And I think this is a really great lesson."