So you thought that buying in a group was dead? Not in Southeast Asia, where Fave, a company that seeks to connect local merchants with customers who use discounts, has closed a $ 20 million round of Series B while exploring expansion opportunities.
The startup started as a KFit fitness subscription service, but pivoted on buying groups and coupons after it acquired Groupon's businesses in Singapore, Malaysia and Indonesia. KFit is still working, but the Groupon agreement caused Fave's CEO, Joel Neoh, to return to the e-commerce space. Neoh previously started GroupsMore, based in Malaysia, which Groupon acquired within a few months of its launch. He then went on to direct Groupon's operations in Asia before leaving to start KFit in 2015. KFit / Fave co-founder Yeoh Chen Chow, also spent time with Groupon as regional operations director at APAC.
Fave said his new round was led by current sponsors Sequoia India, SIG Asia Investment and Ventura Capital, although Neoh told TechCrunch that he also took money from a "strategic" investor based in China. Neoh refused to provide the identity of the Chinese investor, apart from saying that he is "an important player".
We could not determine the identity of the company, but one source suggested that it could be Meianan Dianping: the "super application" service that is being prepared for a Hong Kong IPO that could reportedly be worth as much as $ 55 billion. Meituan is actively exploring investment opportunities in Southeast Asia, and has already supported Go-Jek through a strategic investment.
Combined, Fave and KFit have raised a total of $ 35 million after the announcement of today's round. [19659002] Fave said it works with "tens of thousands" of offline businesses in Singapore, Malaysia and Indonesia, with around three million application downloads to date. In a press release, the company said it would "generate more than $ 100 million in revenue" for its associated businesses in 2018, but Neoh told TechCrunch in an interview that the figure is likely to be "closer" to $ 150- $ 200 million. end of this year However, this is not income to take home, since Fave eliminates the transactions of its retail partners. Fave did not disclose a figure for its net income.
Neoh said that Fave plans to use capital to expand its focus on mobile payments and develop more "merchant-friendly" services and solutions. The company offers services ranging from restaurant and food reservations to beauty, fitness, activities and more, but Neoh wants to go beyond that by using partners.
Meituan – which sets the standard for online and offline services – takes the majority of your income and food delivery transactions. Fave does not offer that at the moment – Neoh acknowledged that there are already a lot of services doing it – and said he plans to try to establish partnerships with those companies, such as Grab, Go-Jek, FoodPanda and others . The objective of the service providers, the CEO of Fave hopes, is that the platform already has merchants and restaurants that can add value to third parties if they are integrated with Fave.
Instead of focusing on consumers, Fave wants to delve into The F & B partners and help merchants connect with service provider partners to expand the services they can offer. But instead of having to juggle the demands of multiple services for food delivery, for example, Neoh believes Fave can add those channels and offer them through a service, his.
"Instead of competing with them on that front, it's a more collaborative model," Neoh said. "Over the next three to six months, we seek to collaborate and work with merchants, delivering food and other services that we do not offer would be a natural next step to offer to merchants."
The startup is also starting to look for opportunities for expansion in Southeast Asia, the region with a population of more than 650 million consumers. That is likely to happen in 2019, Neoh confirmed
Regarding KFit, he said the service is still running with an independent team. It's still profitable and it's not a distraction, he added, so it's likely Fave will continue to execute it.
"But if there is an association [potential] with ClassPass [which recently launched in Singapore] or someone else wants to do that, then we'll see it," Neoh added.
