Roboadvisers need their own money

Today, we’ve got the deets on:

• The growth of wealth management platforms
• Why the Grab-GoTo talks are different this time

Dear Garage reader, 

Wealth management platforms were busy rolling out new products and raising funds last year. That pipeline of launches led to a bump in their assets under management (AUM) – a key indicator of how big and trusted a wealth manager is.

Many are targeting the mass affluent segment to scale up. Still, even after years in the market, none of the main players headquartered in Singapore have reported profits.

The financial viability of digital wealth platforms has been a sticky issue. Last August, roboadviser MoneyOwl said it was winding up as the business was not commercially viable. Though a prominent player, MoneyOwl stood slightly apart from the market as a social enterprise focused on financial planning.

Even then, its failure raised questions about the low-fee business model. Startups are playing the game of volume and scale, and as they double down on existing markets this year, their profitability will be an issue to watch.

Last week, we delved into the mechanics of a Grab-GoTo merger and why any potential discussion this time would be different than the one that took place three years ago, which yielded no deal.

Both companies are under immense pressure to turn profitable – and stay that way. Nasdaq-listed Grab on Thursday reported its first profitable quarter since listing, turning in US$11 million.

Still, its shares slid the most in more than nine months after its forecast of 2024 revenue was lower than expected. Besides striving for top-notch operational efficiency, the company could use some clever dealmaking to maintain its bottom-line strength.

That’s all from us this week. Have a good one ahead!

5 things to know

• Julo, Julo, IPO INDONESIAN online lending startup Julo said it’s working towards an initial public offering as its annual revenue nears US$100 million. Read more
• Go to GoTo THE chief executive of buy now, pay later company Atome is stepping down to join the fintech arm of GoTo. Read more
• Duty cut VIETNAMESE electric-vehicle maker VinFast has asked India to reduce import duties on its cars for about two years so customers can get familiar with its products. Read more
• Pizza time GOPIZZA, founded in South Korea, is the third-largest pizza chain in Singapore by store count. Its founder is eyeing bigger growth. Read more
• Hit pause JEFFERIES is the first major foreign brokerage to drop coverage on One 97 Communications, the operator of major fintech platform Paytm, until regulatory issues ease. Read more