BEACON VC, a corporate venture capital arm of Kasikornbank (KBank), yesterday made its first investment in the emerging wealth management technology (wealth-tech) sector by leading a US$6.5 million investment round of pre-series A funding in Jitta.
This investment round marks the biggest pre-series A funding for a Thai startup to date.
Thanapong Na Ranong, managing director of Beacon Venture Capital, said that Jitta has the potential to become the country’s first unicorn because of its unique, proprietary core-technology that can be scaled globally, and its services are directed at the financial industry, which is a huge market globally.
“Globally, more than 50 per cent of total venture capital is invested in fintech startups compared to less than 10 per cent in Thailand, as there are fewer fintech startups here,” said Thanapong.
“Jitta is our second fintech investment after FlowAccount, but Jitta is the first wealth-tech startup for us and for the country.”
He said that the $6.5 million funding round for Jitta would help promote innovation in the country’s wealth-tech industry and prepare the company for global expansion.
Beacon VC will support Jitta in expanding its services in Thailand and abroad, enabling broader access to Jitta’s simple investment solutions, “so more people can build long-term wealth with minimal effort, which is in line with KBank’s direction”.
“Beacon VC sees a lot of growth potential for wealth-management technology, or wealth-tech, as it plays an increasingly important role amid the low interest rates,” said Thanapong.
“Jitta has exhibited the most outstanding capability to develop such technology, with its proprietary stock-analysis algorithm that’s been proven to help investors beat the market in the long run, as well as a steadily growing user base.”
Beacon VC has invested in five startups in Thailand and overseas. The firm focuses on investing in high-potential startups that can deliver value to KBank’s customers or can contribute to the bank’s business expansion. It has $135 million in funds and has invested in several technology startups such as FlowAccount in Thailand, and Grab and InstaReM in Singapore.
Trawut Luangsomboon, chief executive officer and co-founder of Jitta, said that by being in partnership with Beacon VC, Jitta can raise its innovative capabilities and become a leading wealth-tech company.
With the latest fund, Jitta will use the proceeds to expand its team of software engineers and other experts in technology and marketing.
They can conduct research and development on so-called deep technology, which includes artificial intelligence (AI) and data mining, while expanding service overseas in countries such as Singapore and India. The funds can also help the company to boost growth through the launch of a new service called Jitta Wealth.
Wealth-tech relates to ways of using technology to manage wealth. The wealth marketing potential in Thailand is around Bt 12 trillion. If Jitta were to gain just 1 per cent of that amount, this would come to Bt120 billion, Trawut said.
He did not give a timeframe for this goal.
“We would also make accessible the stock-analysis data for 95 per cent of the world’s stocks from 16 territories. Additionally, we are launching Jitta Wealth, a technology-based fund that uses the Jitta Ranking strategy and aims to provide index-beating returns in the long run,” said Trawut.
He said this long-term investment alternative would be operated by Jitta Wealth Asset Management, which is seeking a private fund licence from the Securities and Exchange Commission (SEC), and will tentatively begin operating in the second quarter of this year.
“We believe Jitta Wealth will receive a lot of interest from retail investors, due to the fuss-free service, the low management fee of 0.5 per cent per year and a fair performance fee of 10 per cent of the profits, and better returns through the use of technology,” said Trawut.
Jitta’s technology include Jitta.com, a fundamental analysis platform covering stock markets in 16 countries with over 200,000 users in 128 countries, and Jitta Wealth, an automated stock investment platform that uses Jitta Ranking strategy to deliver higher returns at lower fees and risks, said Trawut.
The Jitta Ranking strategy has been used by asset management firms to manage over Bt2.2 billion worth of assets.