As Kuznets (of “Kuznets’ Curve”) would put it, “growth is a rising tide that lifts all boats” – in emerging markets, almost all industries get to benefit from the growth of the economy, enabled through opening up to trade and investments, socio-political reforms, greater transparency and efficiency in the capital markets. A key factor is the development of a stable financial infrastructure, of which hinges upon consumer and business access to capital. One essential element of the financial system is the relationship between lenders and borrowers (consumer, businesses, government, foreign entities), with relationship management at the heart of it. One company that is looking to take advantage of the gap between customers’ expectation and the level of service emerging market financial services firms (banks/Micro Finance Institutions(MFIs)) provide is Salutat, one of Startupbootcamp Fintech’s 2019 cohort.
Update: Salutat has since “sold its technology” to Advans, a small business SME loans, and financial services provider.
Who are they?
Salutat was founded by Mike Driver (CEO) and Sam Upra (CTO) in 2018, is headquartered in Thailand and has an office in Singapore. It was reported in May 2019 that it has ongoing pilots in Thailand, Myanmar, Kenya and Zimbabwe, with discussions for partnerships in the Middle East, Eastern Europe and Latin America. In a conversation with Mike in early July 2019, it was also revealed that they plan to build a business development team in Thailand.
Salutat’s goal is to help financial institutions improve the digital customer experience through better, automated, communication, both externally and internally. This is in response to the increasing demand of consumers for fast, on-demand, secure and personalized customer service, as well as the burgeoning responsibilities of staff with the increasing need to handle omni-channel communications to customers.
They claim that “staff at banks and MFIs manage as many as 500 customers each” and “send an average 20K messages per year across up to 10 different channels”. To manage customer relationships more effectively and efficiently, they are building a conversational marketing and customer servicing solution that helps its clients move to OTT (over-the-top) communication channels with its customers, replacing SMS blasts with 2-way, personalized smartphone chats, supported by behavioral psychology and machine learning. Through this widely adopted mode of communication, Salutat hopes to increase financial inclusion, to give potential borrowers (entrepreneurs, under-served societies etc.) greater access to the financial system and also contribute to the democratization of access to financial services of developing countries.
From the technology-enhanced customer relationship management system and real-time data analytics and reporting, Salutat hopes to be able to gain greater insight on a customer and provide useful signals with customer engagement, some of which could be, for example, declining engagement, the need for a certain service, appropriateness of time to engagement etc., as well as staff performance, for example, fraud or harassment language alerts.
In addition, it also seeks to optimize, through centralizing and analyzing, internal communication between teams about customer interactions. This seems to not only improve efficiency within the company by having a standardized or common source of information for the same customer, hence improving on customer services, but also reduces the probability of duplicate touch-points a client has with the same company, which might irk a customer (imagine if you were approached by many different people from the same firm – what impression would you have of them? Disorganized would be one).
Some of its partners include the National University of Singapore (NUS) and University of New South Wales (UNSW). It is reported that the founders teamed up with professors from the universities to “conduct a research effort of almost 1,000 low-income borrowers in Asia and Africa to understand their financial, business, and digital needs“.
Salutat product UI. Source: Salutat website
What is the team and who are the investors?
Salutat was founded and is led by Mike Driver, with co-founder [ ] as CTO.
- Mike Driver (CEO, co-founder) – formerly investment officer covering FIG (Financial Institutions Group) at IFC (International Finance Corporation) and also at ADB (Asian Development Bank), with a M.B.A. from Wharton and B.S. Economics and International Development from University of Bath
- Sam Upra (CTO, co-founder) – formerly Backend/Big Data software engineer at Agoda in Thailand, pausing his M.S. Computer Science at Georgia Institute of Technology and holds a B.S. Computer Science from Mahidol University International College (Thailand)
- Theerasan Tonthongkam – Ta (Head of APPS) – with Salutat since April 2019 and formerly an android developer at eatigo (restaurant reservation platform) in Bangkok, as well as Project Manager and Software Engineer at AMPOS Solutions (provider of mobile talent management solution), with a B.S. Computer Engineering from Prince of Songkla University in Hat Yai, Songkhla. Profile on Medium and GitHub show interests in “Android, Angular, Firebase, Unity3D and UX/UI”
- Yurika Morita (Head of OPS) – joined Salutat in June 2019, having previously spent 6 months as Head of Product in Audacious Futures (provides consulting on preparation for high-tech innovations) and was in charge of building and managing FutureFit AI (AI-powered upskilling and reskilling solution) services. Previously with Quipper (edTech company with presence in Japan, Indonesia, the Philippines and Mexico) as Head of Partnerships in London and Country Manager of Vietnam and Thailand. She holds an M.B.A. from Harvard and a B.A. Economics from Haverford College
Advisors listed on the website include:
- Prof Joel Pearson – Professor in cognitive neuroscience from the UNSW, founder and director of the UNSW Future Minds Lab, a hands on empirical lab that develops new methods to scientifically study all related aspects of innovation using Psychology and Neuroscience
- Prof Michael Frese – Head of department of Management & Organization in NUS, and research spans a wide range of basic and applied topics within organizational behavior and work psychology, as well as longitudinal studies on psychological effects of unemployment, impact of stress at work, predictors of personal initiative, as well as psychological success factors of entrepreneurs
In May 2019, it raised seed funding from 500 Startups, Singapore’s Expara Ventures and Impact Investment Exchange (IIX). More recently, the Catalyst Fund (JPM and Bill & Melinda Gates-Foundation-backed accelerator which provides mentorship and non-equity funding) also announced Salutat as one of its 4 finance ventures in its 2019 startup cohort.
Expara’s Asia Ventures fund portfolio companies include 3 other AI-focused companies (Brain Dynamics, Compliy and Rooit) and the company has been investing in Southeast Asia since 2007, with expertise in incubation and early-stage venture capital, which Salutat can hopefully benefit from.
The IIX growth fund seeks to fill the gap between the supply of capital (19% of world’s active PE and VC impact fund are Asia-focused) and the demand from high-impact enterprises in Asia for investment, and to accelerate inclusive growth in Asia’s frontier markets, focusing on the “double bottom line”. Given Salutat’s focus on developing regions with the goal of improving low-income micro-entrepreneurs lending, especially to women, hopefully it can leverage off IIX’s expertise and network, with both capital providers and institutions in the region, to accelerate growth.
In addition to NUS and UNSW, Salutat also lists Helicap (FinTech investment firm that provides lending capital to alternative credit providers in Southeast Asia and Australia), I was not able to find any information on it online. It would be good to understand if they were involved in debt financing for Salutat or are serving in an advisory capacity.
What is their value proposition?
Salutat is a company I would consider to have the potential to achieve the double bottom line – achieving financial, as well, and as important as, social returns. That is, its target consumer of those in developing countries will allow it to gain access to a huge, relevant, market for its product (think product-market-fit) and allow it to synergistically achieve financial profits and making a positive impact to one’s life, as well as maintain sustainability.
They are hoping to solve a pain point in customer communication, specifically targeting the financial industry where such communications take place frequently, and in emerging markets where there is a necessity for financial inclusion and demand for financial products that will likely be a major driving force of the economy in future. Developing countries are often characterized by the lack of infrastructure, both technology and physical, and the digitization of communications which Salutat is bringing will take away the inconvenience of traveling to get access to much-needed services.
In addition, they are also aiming to cut down the inefficiencies in inter-company communication and information flow. By managing data efficiently and in real-time, lapses in client communication will be minimized, the reaction towards customers’ needs quickened, and attention to declining customer engagement sharpened. It also tracks staff performance which will allow rectification of erroneous behavior quickly.
What could the company branch out into and what similar companies are there?
Beyond just serving the needs of financial institutions, Salutat could also bring its communications expertise to other potentially important industries in emerging markets that could grow in significance. Examples are mobile service providers, given how countries like China and India have leap-frogged computers to mobile-connectivity, which is the main channel of being connected to the internet (and world) for consumers, or, as a longer-term play, eCommerce, which will be able to take off once there is the connectedness infrastructure in place.
Apart from horizontal expansion into other industries, it could also expand the set of services it provides, to become a multi-encompassing full-suite service provider to businesses. For a company’s internal resource and staff performance management, it could start offering payroll and benefits services, while for its client-facing business, it could offer sales consulting (e.g. provision of telemarketers), or go deeper down the value chain to start offering financial products and services, as well as loyalty programs and management of these programs based on social media.
It could also deepen its services in its vertical, by not just offering communication solutions through mobile channels like WhatsApp, but also potentially setting up physical satellite customer-service stations for where the human-touch is still desired and necessary, or going the other way and developing chatbots, like Pand.ai, to automate the addressing of the most frequent and straightforward customer issues. Further integration into more communication apps is an obvious option, and development of a proprietary app (apart from WhatsApp and Line which it claims capability with), is also a possibility.
A company that it could potentially exchange learnings from is Winimy, an AI-powered omnichannel customer engagement solution that is based in Singapore and claims to serve >900K businesses there and in the Middle East.
Sumatosoft is a software solutions company in Belarus that, on top of chatbot apps, provides a wide range of customized software solutions to clients, leveraging on some up of the newer technology capabilities, for example, internet of things, artificial intelligence and machine learning.
Chatbot Startups (2016 post). Source: VentureRadar
- African fintech dominates Catalyst Fund’s 2019 startup cohort
- SG’s fintech startup Salutat raises seed funding from 500 Startups, Expara
- Beyond the bottom line: Early Stage
- Salutat closes seed round from 500 Startups, Expara Ventures, and IIX, to help lenders improve customer communication
- 25 Chatbot Startups You Should Know
- Finance chatbot builder snags big clients, hits profitability after 18 months