Chocolate Finance whets Singaporeans’ appetite for higher cash yields; assets approach S$1 billion
Founder says that platform has consistently maintained interest rates better than other alternatives, which is a reason behind its expansion
UNTIL recently, the low rates on Singapore-dollar deposits were a source of frustration for savers. For entrepreneur Walter de Oude, they sparked an enduring passion to create a platform for higher cash yields, resulting in the birth of Chocolate Finance.
Just roughly seven months since its roll-out in July 2024, cash assets in Chocolate Finance are already nearing the S$1 billion mark, a sure sign that de Oude has successfully tapped Singapore’s voracious appetite for more cash options at higher yields.
But few would know that the drive for better cash returns is a common refrain in de Oude’s entrepreneurial journey. He founded insurance company Singlife in 2014, the first digital insurance company, and obtained a licence to operate in 2017.
At the time, he believed that better cash yields were the ticket to raising assets. In 2019, in the absence of a bancassurance partner to offer deposit accounts, Singlife rolled out the “Singlife account”.
“I built something that looked like a bank, worked like a bank, but was actually an insurance product. It was a very simple place for you to put money in, take money out, with an interest or crediting rate which was slightly better than what banks were offering on deposits.
“We put a debit card on it and an app that looked like a bank. Immediately, we gained traction with customers who (were) looking for a slightly better return on their cash,” he said.
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The business scaled up “incredibly fast”, gaining 60,000 customers within the first year. Eventually, however, the regulatory confines of an insurance business were too restrictive for him.
“My ambition was to grow and scale and expand as aggressively as possible, whereas the financial investors were more concerned with consolidation of the base. I was not the right person to lead the business into its next phase, so I made the decision to try something else.
“The Singlife journey was fantastic for me. We built it from nothing into a business ultimately valued at S$4.6 billion when Sumitomo Life acquired it. But the learning I took from Singlife – around the fact that everyone has cash that’s not earning a great return – inspired the idea for Chocolate Finance.” Sumitomo Life acquired Aviva’s share of Singlife in 2023.
He added: “You need to have a minimum lovable product, not just a minimum viable product when you market. To get from viable to lovable takes quite a lot of work. The challenge is to do that in the shortest amount of time. I’m lucky in that I have a team that is incredibly motivated to do cool stuff.” Chocolate Finance’s backers include Peak XV Partners (previously Sequoia Capital India and South-east Asia), Prosus and Chocolate Ventures.
Rapid growth
Chocolate Finance is not a fixed deposit. It is an investment, where funds raised are pooled and invested in short-term, investment-grade bonds with yields sufficient to deliver a target return. Assets may also be invested in money market funds and short-duration, fixed-income funds. The firm has a capital markets services licence for fund management.
Customer funds are in segregated accounts, and there is no penalty for withdrawals.
The platform offers an attractive interest rate on customers’ first S$20,000, and another rate on the next S$30,000. At the moment the rates on offer are 3.3 per cent and 3 per cent per annum, respectively. A “top-up programme” supports the quoted rates, where the platform undertakes to top up any shortfall during the “qualifying period” until Mar 31, 2025 – or “until assets reach S$1 billion, whichever comes first”.
There are no monthly or subscription fees. A performance fee of up to 2 per cent will be charged when returns exceed the promised rates.
To date, Chocolate Finance’s quoted interest rates have steadily declined along with the market – from an initial 4.5 per cent in the pilot phase at end-2023 to 3.6 per cent in January 2025. The current rate of 3.3 per cent for the first S$20,000 applied from February. The decline has not deterred customers, however. Based on a compilation by Beansprout of February fixed-deposit rates, the best rate for a three-month tenor is 2.85 per cent a year. Chocolate Finance’s competition includes robos, which also have popular cash-management funds.
The company’s founder and chief executive said: “Even though rates have come down, Chocolate has consistently maintained a rate better than other alternatives, which has meant that money has stayed and is very sticky. That’s why we’ve grown so astronomically.”
The firm has more than 60,000 customers to date, and, for every client, there are another 1.6 referred customers. Its website states that returns are not guaranteed and that customers’ principal is exposed to market risks. Deposit insurance does not apply. Customers effectively invest in a managed account.
The site adds: “The target return for amounts above S$50,000 is 3 per cent per annum based on the yield to maturities of the underlying assets. However, the actual daily return may fluctuate a little due to market volatility and can either be positive, negative, or even neutral... Your return is calculated using a money-weighted rate, considering the timing and size of your investments.”
De Oude noted: “What we found is that more people are just putting that bit of spare money into the Chocolate world because it is delivering a return as promised… We believe every Singaporean has a bit of cash currently not doing anything.”
Chocolate is about to roll out a US dollar account, which will pay 4.6 per cent a year for the first US$20,000, 4.2 per cent for the next US$30,000 and a target 4.2 per cent per annum for amounts above that. It has also rolled out a Visa debit card with zero annual fees and zero foreign-exchange fees. The card has garnered more than 8,000 activations since its October launch.
In the pipeline is a product for corporates, which it may roll out within the next few months.
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