Malaysian digital wealth management app Versa announced on September 5 it had secured an eight-figure funding. Regulated by the Securities Commission Malaysia, Versa aims to provide various accessible wealth solutions for Malaysians.
An eight-figure funding means that Versa could have received funds that are anywhere between $10,000,000 to $99,999,999. However, the exact number is unrevealed. Vulcan Post inquired about the currency of the funding too, but Versa declined to disclose the information.
The funding round was led by Hibiscus Fund, which is a venture capital fund managed by RHL Ventures and KB Investment Co Ltd., the latter being a South Korean financial services conglomerate.
Affin Hwang Asset Management, a recurring investor and partner of Versa, also participated in this round alongside new investors OSK Ventures and Singapore-based HPRY Ventures.
According to Versa’s CEO, Teoh Wei-Xiang, the younger generation has found the app’s ethos of making saving and investing easy, accessible, and fun appealing.
“With that, we felt that we were ready and in a good position to scale,” he said to Vulcan Post.
Finding their product-market fit
According to the press release, Versa has doubled its transactions since the beginning of 2022. Wei-Xiang believes this was made possible thanks to a product-market fit, particularly for Versa Cash, as well as the economic conditions.
“Due to COVID-19 restrictions in the past two years and the current inflationary period, many prefer to invest in stable low-risk funds, to recover and rebuild their savings for emergencies,” he said.
Versa, a CIP Ignite II grant recipient under Cradle Fund, was established in 2020 by a group of financial technology entrepreneurs.
The app essentially allows users to save and invest via Versa’s partnership with Affin Hwang Asset Management. Versa users can deposit their funds via the app, which will be handled and managed by Versa’s expert fund managers who manage it based on users’ risk appetites.
Versa has two products—Versa Cash and Versa Invest. The former is a savings products while the latter is a risk-based investing portfolio.
The minimum investment amount for Versa Cash and Versa Invest is RM1 and RM100 respectively.
“[Versa Cash] allows Versa users to tap into money market funds which are traditionally accessible only to high net-worth individuals and corporates, to earn stable returns on their idle savings,” Wei-Xiang shared.
Essentially, Versa Cash is Versa’s flagship cash management solution that lets users earn interest on-par with fixed deposits (FD). But it differs from FDs in the sense that there isn’t a restrictive lock-in period of high minimum deposit requirements which are traditionally required by banks.
On the other hand, Versa Invest gives users access to actively managed portfolios with a combination of passive and active funds.
There are currently two available risk categories for Versa Invest—Versa Moderate and Versa Growth. The Moderate option has a moderate risk rating, wheras the Growth option has a high risk rating.
Expanding Malaysians’ investment options
Similar apps have popped up in Malaysia, such as Singapore-based StashAway, which also offers easy-to-access savings and investment opportunities.
When asked about it, Wei-Xiang claimed that due to Versa’s partnership with Affin Hwang Asset Management, his startup’s operating model is already quite different.
However, StashAway has recently partnered with BlackRock, an American investment management company.
“With our recent funding, we’ll be able to expand our products and offerings in the near future to further distinguish ourselves from our peers,” he said.
Specifically, Versa plans to introduce more investment options with the fresh funds. To do this, Wei-Xiang believes the team will need to up its manpower and possibly secure more partnerships that can provide value for its users, just like its current partnership with Affin Hwang Asset Management.
“Asset Under Management (AUM) has always been the measure of success for global asset managers and we’re looking to grow it further,” he added.
Featured Image Credit: Versa