Hello dear reader,
Each week, we cover startups solving geography-specific problems or those enabled by local context, as well as look at those expanding beyond their current markets.
This week:
Money questions in Singapore
The lack of money in Latin America
And logistics startups moving to the Middle East
Location, Location, Location
Singapore: Succession for SMEs
Oneteam, a Singapore-based startup, raised $2.6 million in seed funding to help small and medium enterprises (SMEs) navigate succession challenges. The company provides free business valuations, performs due diligence, and buys promising companies. They then modernize operations and introduce employee ownership models like stock incentives and profit sharing.
The Local Angle
SMEs Dominate: SMEs account for 99% of Singapore’s businesses and employ 70% of its workforce (btw, it is the case in every single country in the world). Compare that to Germany’s SMEs employing 55% Japan’s employing 60%.
Succession Crisis: An albeit decade-old survey revealed that only 58% of Singaporean businesses had succession plans, lagging behind Malaysia (66%), Thailand (74%), and Indonesia (78%). Another survey came from PWC in 2018. According to survey, just 8% of family businesses in Singapore had formal succession plans, compared to 12% in APAC and 15% globally.
Not a (Immediate) Family Matter: According to HSBC, only 38% of Singaporean entrepreneurs plan to transfer their wealth to immediate family—lower than India (42%) and China (48%). Just 27% discuss wealth transfer (the lowest in surveyed countries), and 17% are open to selling their businesses, second only to Hong Kong’s 23%.
Mexico: Lending a Hand
R2, a Mexican embedded finance platform, secured $9 million in a Series A round alongside a $50 million debt facility. The startup enables marketplaces, ride-hailing companies, and vertical SaaS platforms to provide financial services to SMEs. R2 natively integrates into its clients’ platforms and takes the financial risk onto itself. For that, it takes an average 32% commission.
The Local Angle
Latin America’s Credit Gap: From the very beginning R2 was focused on Latin America as a whole. The region faces a $1.2 trillion credit gap, with 85% of SMEs struggling to secure financing.
Tough Economy: The second issue is an unstable economy. Although to varying degrees, Latin America’s overall economic conditions aren’t great. Some countries struggle with inflation, with Argentina and Colombia being prime examples. Others experience high interest rates: in Colombia and Mexico, interest rates minus the average inflation rate have been over 5% for the 2017–2022 period. Economic growth is also nothing to write home about: in Mexico, Colombia, and Ecuador, it is under 2%.
Japan: Finances for the Young
Japanese fintech Habitto raised $11.7 million in a series A round. The startup offers a digital banking platform aimed at young people in hopes to end their financial anxiety. It wants to help financial novices in entering the financial market by providing a savings account, insurance offering, and investment tools. All that is supported by Habitto’s advisor — a real person that helps guiding a new user in their intricate financial journey.
The Local Angle
Finances and Stress: 63.2% of Japanese consumers feel financially stressed and feel negatively about the future.
Japan is not into Financial Education: According to Nudge, only 10% of Japanese had some financial education in school. Also just 10% use YouTube for financial education — the lowest mark among surveyed by Nudge. Finally, only 36% of people in Japan have exceeded their parents’ wealth, second-lowest behind only Italy.
Japan’s Behind: As a result, Japan’s financial literacy is quite a bit lower than in other developed countries with 43% of Japanese adults being financially literate, compared to over 60% in most of the EU.
China: Caffeinated Bots
Chinese CAYE Technology, a fully automatic coffee machine provider, raised $13.7 million. The company says its machines “emulate the artistry of elite baristas,” claiming extreme precision and the ability to brew everything from cappuccinos to espressos.
The Local Angle
Coffee Mania: The main reason I wanted to put this item in the newsletter is this stat: China’s coffee imports have exploded in the past decade, growing 4.9x in value and 3.3x in weight, according to UN Comtrade data.
Need for Automation: China’s shrinking population and rising labor costs have forced the government and businesses to think of other ways to stay competitive. And, true to form, China tackled the problem head-on—and on a massive scale—by leaning into automation: it now snaps up half of all industrial robots worldwide.
UK: Charging Forward
Molyon, a British startup, raised $4.6 million to advance battery technology by transitioning from lithium-ion to lithium-sulfur batteries. These new batteries aim to reduce reliance on rare-earth metals like cobalt while offering higher energy density and longer lifespans. Previous lithium-sulfur designs struggled with rapid cell degeneration, but Molyon claims it has stabilized sulfur to overcome this challenge.
The Local Angle
The Cambridge Power: Molyon emerged from Cambridge University, leveraging 15 years of research at its Department of Materials Science. This highlights how leading universities continue to shape the future by spinning out cutting-edge companies. Cambridge consistently ranks among the top 5 global institutions in chemical engineering, making it a hub for innovation.
From Here to There
Locad: Scaling Middle Eastern Logistics
Locad, a logistics solution provider from the Philippines, raised $9 million and plans to expand into the UAE and Saudi Arabia. The company helps consolidate their clients’ inventory in one place, enabling them to sell goods through multiple channels across international borders.
Qara: Also Helping to Logistics in the Middle East
Egyptian startup Qara raised $2.6 million to continue its expansion in Saudi Arabia. Qara provides a platform for producers to authenticate and trace their products.
Portcast: Helping Ports Across Asia
Another startup in the logistics space, Portcast from Singapore, raised $6.5 million in Series A funding to expand its operations across Asia Pacific and Europe. Portcast’s product helps track container shipping information and predict ETAs.
Hoopers: Dunking into Brazil’s Courts
A Portuguese sportstech company, Hoopers, raised $2.3 million in a seed round to develop its operations in Brazil. Hoopers helps basketball teams and sports associations with court revitalizations, events production, and helps basketball players find courts.
