EIGHT months after his departure from WeWork, veteran entrepreneur Turochas “T” Fuad has unveiled his newest startup in the hot “Buy Now Pay Later (BNPL)” space, Pace Enterprise (Pace).
Armed with a “high seven-figure” seed round co-led by Vertex Ventures, a Temasek subsidiary, and Alpha JWC, the company says its mission is to drive financial inclusion in Asia Pacific and the funds will be used to further develop its platform and offer progressive services and solutions to consumers and merchants.
In the Singapore tech startup world, Fuad has become known for his fast “launch, scale, exit” strategy following his two exits from Travelmob (to HomeAway) and Spacemob (to WeWork).
Following the acquisition of Spacemob by WeWork, Fuad stayed on as managing director for South-east Asia and Korea until his departure last June, which happened in the midst of the well-publicised struggles of the once great co-working unicorn brand.
Fuad kept a low profile and has clearly been working quietly away on Pace. With this new startup he’s gathered a trusted team around him, as well as investors familiar with his track record.
“The reason we launched Pace—and our long-term goal—is to create a broader and more inclusive digital fintech platform that empowers underserved populations,” said Fuad, who is CEO and founder. “To achieve this, BNPL (Buy Now Pay Later) is the right first step that flexibly and seamlessly extends customers’ buying limits while giving merchants access to financing alternatives and entirely new customers segments.
“Pace has a clear and bold vision to create an inclusive and accessible ecosystem. With a strong founding team that has worked together for over 10 years and has a proven track record in building successful ventures, Pace is already transforming the fintech space, and we’re excited to be a part of that growth. Vertex Ventures SEA was an early investor in Spacemob. We have been impressed with T at Spacemob and are happy to back him again in this new venture,” said Kee Lock Chua, managing partner, Vertex Ventures SEA & India.
Headquartered in Singapore, it is available in Singapore, Malaysia, Thailand and Hong Kong. It says it uses a bespoke financial profiling algorithm to match customers with appropriate spending limits that allow them to split their purchases over three interest-free installments.
The BNPL space has exploded in recent years with a payments model aimed at catering to Millennial and Generation Z customers who prefer debit over credit. The poster child, Afterpay, out of Australia, reached $30b valuation in November 2020. Founded six years ago it was listed two years after with a valuation of $140 million.
A Worldpay report forecasts that the BNPL market in Australia will double by 2023 and that nearly two million Australians used a product like Afterpay or ZipPay last year.
In South-east Asia, which Pace is going after, the opportunity is enormous when you consider the size of the unbanked population. This report on the state of digital banking in ASEAN states that only 27% of the population in South-east Asia have a bank account.
The World Bank estimates that around 80% of people in Indonesia, the Philippines, and Vietnam, and 30% in Malaysia and Thailand, are unbanked. Myanmar has one of the lowest levels of financial inclusion in South-east Asia with only 23% of the adult population holding a bank account.
The model is also gaining traction in travel. In December, Agoda signed an agreement with Atome to offer flexible instalment payment option for accommodation bookings in Singapore and Malaysia initially, followed by Indonesia, Philippines, Thailand, Vietnam, Hong Kong and Taiwan. Traveloka has its own scheme.
With Fuad’s background in travel it can be expected that Pace will try and make inroads into the sector which will be needing flexible payment options once travel recovers.
Pace says that as adoption for its solution grows, it will leverage insights and unique buying patterns to offer the right fintech solutions to a developing digital banking ecosystem.
Since rolling out its BNPL offering in November 2020 Pace has added over 300 points-of-sale from over 200 merchant partners including Goldheart, OSIM, Sincere Watch, Carousell, Reebonz, and FJ Benjamin.
“It’s only been four weeks, but our partnership with Pace has already proven to be effective in driving solid results both online and across our 16 retail outlets. In fact, since the partnership started, Goldheart has reached more customers and with the support of their scalable technology platform, we’re excited to keep that momentum going,” said Patsy Loo, business director, Goldheart.
With Pace, businesses of all sizes can easily activate and offer BNPL payment options to their customers, including debit card holders. This enables greater reach and higher sales through sustainable spending. In fact, as part of a BNPL pilot program in Singapore Pace signed an exclusive partnership with Carousell that enables specially curated Carousell merchants to offer Pace’s BNPL payment option to their customers.
The company aims to reach 5,000 merchant partners by the end 2021 through its geographical expansion into North Asia and the rest of South-east Asia.
• Images credit: Pace