About
Richard Koh
Fintech Entrepreneur
At the Forefront of the Fintech Revolution
With many mouths to feed, eight months without a salary can be an extremely long time, but passion kept Richard Koh’s dream alive.
Koh, founder and Chief Executive of homegrown tech start-up M-DAQ, dreams of creating a world without currency borders.
Now a profitable company after nine years, M-DAQ is valued at more than S$300 million. But it has not been an easy journey as Koh recalls a time when he sold off his car and house and had to resort to borrowing from his family.
“The passion that kept us going is we all felt that there was this dream that we wanted to fulfil,” says Koh.
The company’s goal of minimizing foreign exchange (FX) risk is based on proprietary patented technology that enables buyers to see asset prices in their own currency.
In 2015, Ant Financial, the Chinese payments firm affiliated to Internet behemoth Alibaba, participated in M-DAQ’s Series C fundraising round. This then led to AliExpress adopting M-DAQ’s technology in order to enter new markets.
M-DAQ has also tied up with the Singapore Exchange to develop a prototype solution for investors to view stock prices in real-time in selected currencies.
While the company is definitely spearheaded by Koh’s vision, instrumental to its success has been “a team of believers who have steadfastly believed in the whole mission and the vision that we are trying to achieve.” says Koh.
Nurturing A Start-Up Mindset
Being based in Singapore has also been one of the key factors behind M-DAQ’s success, with Koh describing it as the “perfect place to start a business”.
“We have a very open economy as well as a financial system that is recognised worldwide as stable and transparent,” Koh enthuses. “And this has actually allowed us to attract both capital as well as strategic partnerships, and more importantly, to attract talent.”
Singapore’s government agencies have nurtured what Koh describes as a “start-up community mindset” giving support financially and otherwise. In fact, Singapore’s Economic Development Board (EDB) gave M-DAQ a S$1.5 million grant in the company’s early years. And six years later, the EDB ‘s investment arm made its maiden investment in a Singapore-based company and became a shareholder of M-DAQ.
Even though 90% of the company’s business is overseas, the reliability of Singapore’s telecommunications infrastructure enables M-DAQ to conduct most of its business centrally through cloud computing.
All these attributes explain why many start-ups have chosen the city-state to base their headquarters, including unicorn Grab which moved its base from Kuala Lumpur to the city-state.
Global Fintech Village
Specifically, in the realm of financial technology, Singapore packs a powerful punch. The country is likely to emerge as one of top three global fintech hubs in the next two years, according to a survey by US law firm Reed Smith.1 And fintech investments in Singapore have more than doubled to US$365 million in 2018 from US$180 million just the year before, reads a report by Accenture.2
Singapore’s central bank, the Monetary Authority of Singapore (MAS), has been a key champion in securing Singapore’s global fintech hub status through a raft of initiatives including organising the annual Singapore Fintech Festival in November, which attracted 45,000 participants from 127 countries last year, cementing its standing as the biggest fintech event in the world.
“The week-long Festival allows us to network with other businesses, whether it’s upstream supply chain, forge strategic partnerships or find potential investors,” says Koh.
Last year, 380 participating investors, who enrolled in the festival’s deal-making platform MATCH, indicated intentions to invest US$12.2 billion over the next few years.3
The draw of Singapore as an attractive place to hold events such as the Singapore Fintech Festival, according to Koh, is its strategic position at the crossroads of East and West, enabling participants to “harness the best of both worlds”.
“No one feels foreign to this place, even if you come from overseas,” continues Koh. “Whether it’s the food, the people, the culture – Singapore is very dynamic and global. We are almost like a global village.”
Other notable MAS initiatives include being one of the earliest central banks to adopt “regulatory sandboxes” for fintech companies. This allows firms with new ideas to test their products and services in a controlled environment before fully launching them.
Singapore’s central bank has also penned a number of agreements with countries ranging from Japan to the US and Indonesia to bolster fintech ties.
While the MAS is described as a “no-nonsense regulator” by its chief Ravi Menon, managing director at the central bank, it is “highly facilitative of innovation” and wants to “create an environment that promotes innovation but without comprising soundness”.4
Silicon Valley of the East
Looking back a decade ago, Koh recalls a time when it was very difficult to attract international funds to provide capital to start-ups in Singapore, but things have changed dramatically.
Singapore’s venture capital investments are said to be 30 times higher last year than in 2012.5
Koh even goes so far as to call his hometown the “Silicon Valley of the East”.
“Many VCs now have local offices and the funds raised are regional, of which a large chunk is given to start-ups incorporated in Singapore,” explains Koh. “We look at this place as a place to experiment and generate ideas before it is ready for the region or the world.”
With so much money pouring into the country and the industry, it is no wonder entrepreneurs are flocking to the island state.
“I must say it has actually been a journey of faith.” “Over here, as long as you have a dream and the passion to make the dream come true, nothing can stop you.”
1https://www.scmp.com/business/companies/article/2173270/fintech-ma-deals-set-grow-globally-over-next-two-years-according
2https://www.straitstimes.com/business/invest/spore-fintech-investments-more-than-double-to-492m-in-2018-accenture
3https://www.mas.gov.sg/news/media-releases/2018/singapore-fintech-festival-attracts-us12-billion-of-capital-for-asean-enterprises
4https://www.bloomberg.com/news/articles/2018-11-09/fintech-and-the-monetary-authority-of-singapore-interview
5https://www.sgsme.sg/news/startups/coming-bust-venture-capital-spore-may-be-worst-hit
