People born in a period of relative calmness and economic prosperity, the generation Ys/millennials, are entering a phase where they are a few years out of college and are beginning to step into major milestones in their lives. They might be thinking of getting into a marriage, save for their first home, think about retirement care for their parents, and start planning seriously for the future. They are also at a stage where they are earning enough to be able to budget for savings and are considering how they want to grow and safeguard their wealth. Notably, retail wealth (savings and investment solutions) is a large opportunity in Southeast Asia, with mutual fund AUM expected to reach ~$700B by 2023.
Especially in the APAC region, where the availability and knowledge of investment tools are relatively low compared to the rest of the world, there is a dire need to nudge people towards better planning for the future, especially in a time of greater global trade tension and as we are many years into the economic cycle. With this backdrop, even companies like Grab has dipped its toes into wealth management with its acquisition of robo-platform B2B provider Bento. Smaller (and hearsay even some larger ones) B2C wealth players have struggled as customer acquisition costs are high compared to the fees they can charge. B2B is highly competitive, yet at least with the advent of financial services providers eyeing a slice of the wealth management pie, continue to remain afloat. Another such player in the space is Bambu.
Who are they?
Founded in 2016 by Ned Phillips and Aki Ranin, Bambu is a B2B digital wealth and robo-technology provider for banks, asset managers, fund managers, and investment advisors, agnostic to asset class and region.
It provides a white-label modular solution that includes data visualization, portfolio construction and management, risk profiling and client onboarding. They had aimed to be cash-flow positive by 2019 and by 2021-2023 to be a global leader in robo building, exceeding $50M in recurring revenue with a minimum of 100 clients by 2024.
In a 2017 interview, unlike other wealth-services related providers that charge a fee on associated assets-under-management, they had claimed to instead charge their clients a monthly fee of $1 per user.
- Intelligent advisor
- Enables relationship managers to make relevant investment ideas for client portfolios
- They do this through leveraging a proprietary ranking algorithm to provide a unified view of the market and house view
- White-Label Robo
- Offers wealth management service providers (e.g. banks, asset managers and insurance companies) an intuitive platform to automate portfolio creation and management
- Creates a personalized portfolio and risk profile
- Portfolio Builder
- An interactive tool for investment advisors and analysts to consume insights and analysis, to aid in portfolio construction
- API developer hub
- A platform of independent modules for extending a client’s robo solution
- (As of February 2020, this is unavailable)
Bambu is headquartered in Singapore with subsidiaries in Hong Kong, Malaysia, and the United Kingdom, as well as representatives in the Middle East, Africa and the Americas
What is the team and who are the investors?
Bambu was founded in 2016 by Ned Phillips (CEO) and Aki Ranin (COO), complemented by a team of experienced professionals from diverse industries.
- Ned Phillips (CEO) – 9 years sales at E*TRADE and ITG, 5 years exchange experience and 4 robo advisory
- Aki Ranin (COO) – 6 years experience in tech consulting, at Tigerspike (SG) and Avaus (Finland)
- Pierre Valentin (CIO) – 8 years investment advisor at Golden Alpha, ABN AMRO and ANZ, experience in risk at Natixis, Societe Generale
- Sean Zhou (Head of Sales, APAC) – 2 years partnership/BD at FOMO Pay and invstr, 3 years in the Land Transport Authority of Singapore
- Nick Wakefield (Managing Director, Europe) – co-founder of Regulation Asia / RegWire, the former a source of regulatory news for financial services in APAC and the latter a real-time data and analytics tool for Financial Regulation
Bambu most recently raised a $10M Series B in Jul 2019, with third-time investor Franklin Templeton co-leading the round with new investors PEAK6 Strategic Capital. With these funds, Bambu had mentioned that they would accelerate growth and expand the product offering to target new segments within financial services, as well as build up delivery and support teams in key global markets.
Prior to its Series B, it had raised 3 rounds of investing – 2 seed rounds and one Series A. Its $3M Series A round was led by Franklin Templeton with Singapore family office Octava and Japanese Fintech investor Mamoru Taniya also joining the round. It also received investments from Wavemaker Partners, a prominent VC in Southeast Asia, and Fintech investor Robby Hilkowitz.
What is their value proposition?
The company believes that financial planning is moving towards becoming relevant not just for the white-collared workers, but for the masses, especially with the advent of technology and connectivity.
With that backdrop, financial services firms are starting to strategize to capture as much managed dollars for their existing and prospective clients as possible. Bambu aims to help to democratize financial planning and assist these firms to achieve their goal of being a trusted partner to consumers in wealth management. Their B2B robo-platform product aims to make it much easier and quicker for these firms to bring to market a robo-advisory solution for their current-or-prospective clients. Beyond that, their intelligent advisor and portfolio builder solutions will make maximize their clients’ customer value proposition, by allowing for smart, tailored and timely advice and solutions, to better serve their end customers.
They believe they are best positioned to grow through this business model because as opposed to other regions, where, for example in Europe, there are pan-European licensing processes, the target market of Southeast Asia is relatively fragmented.
One example of a successful partnership was helping Refinitiv, a global financial markets data and infrastructure provider, build a robo-advising tool for private bankers, subsequently used by Standard Chartered.
What could the company branch out into and what similar companies are there?
To enhance its current product set, it could potentially offer complementary services to the digitized wealth management providers, including live chatbots for lead engagement and greater automation in advisory, on-boarding or identity and verification tools, similar to what New Wealth aspires to do.
Other similar players are London-headquartered WealthObjects, which elevates the customized experience for its clients, claiming to work in partnership with the wealth manager to match the robo to the particular business model. They also double down on providing smart suggestions and prompts to their clients (financial advisers) to help manage their own customers.
additiv, which is Zurich-based, pivoted from B2C to B2B, and has been expanding geographically, most recently into the Middle East and North Africa, through a partnership with QCENTRIS, an IT services firm focused on the implementation of digital transformation projects. Bambu could continue taking on the approach of expansion geographically.
With the increasing demand for better knowledge on wealth management and tools that enable it, financial service providers and technology-led ecosystem players (e.g. Grab, Go-Jek) are paying greater attention to the service gaps in the industry. While assets-linked fees for financial services targeted for the masses are likely not to be high, the greater ease of distribution and acceptance of automated management might bring down costs, helping these players eke out profitability. The greater concern in APAC is the disparity in existing regulatory oversight and/or the speed at which they react could be an obstacle for these players.
Bambu has successfully grown its business by avoiding the independent approach and targeting established financial institutions with licenses and regulatory acceptance and the founders continue to be upbeat about its progress. It will be a company worth looking out for especially with the minor shake-up with Grab’s acquisition of Bento.