Singapore-based robo adviser AutoWealth Pte. Ltd. is raising up to US$3 million to expand into neighbouring Malaysia and to introduce new products, according to people familiar with the matter.
"The company is raising the funds mainly from high-net-worth investors via equity crowdfunding platform, and is also looking at raising the funds from venture capitals,"one person, who is a top official at a rival robo-advisory firm, tells Asia Asset Management (AAM), speaking on condition of anonymity.
According to this official, AutoWealth has applied for a digital investment management, or robo advisory, licence from Securities Commission Malaysia (SC), and “the funding will come in handy once it receives the approval”.
Robo advisers are firms that offer automated, algorithm-based investment advice to retail investors.
Another person familiar with AutoWealth’s plans says the funds raised could also be used to explore opportunities in other Southeast Asian countries, including Indonesia.
"Malaysia is a key market that AutoWealth is looking at. However, it is also keeping its options open and could explore other Southeast Asian countries," this person says.
AutoWealth Chief Operating Officer Noel Lee confirmed the fundraising and expansion plans, saying that the company is also in talks with banks and traditional asset managers to raise the money.
He says the funds will be used to “further consolidate our position in Singapore, expand into Malaysia and a third Southeast Asian market”, which he did not identify.
“We have received in principle approval from the SC,” Mr. Lee tells AAM.
Spokespersons for the SC did not immediately respond to questions from AAM.
AutoWealth, established in 2015, is one of the first robo advisers in Singapore. The company launched its robo-advisory service in 2017, and competes with several others in the city state, including StashAway, Endowus, Smartly and MoneyOwl.
These firms also compete with robo-advisory services offered by traditional financial services providers, including Oversea-Chinese Banking Corp.’s OCBC RoboInvest, United Overseas Bank’s UTrade Robo, and DBS Bank’s DBS digiPortfolio.
Malaysia currently has three licensed robo advisers, including StashAway, which was the first to launch its service in the country in November 2018.
Two more firms – MyTheo, a Malaysian-Japanese joint venture, and Wahed Investment from the US – have since entered the market. MyTheo began operating in July but Wahed, which received its licence from the SC in August, has not rolled out its service yet.
According to Mr. Lee, AutoWealth currently has more than 2,000 customers and over S$30 million (US$21.72 million) of assets under management.