Deals: This Singaporean fintech startup just raised almost $1m, pre-launch

By Nadine Freischlad for

AlgoMerchant, a Singapore-based fintech company, has closed a S$1.3 million (roughly US$910,000) seed round led by East Ventures. The startup still operates in closed beta. It plans to use the funds to develop the product, accelerate user growth, and hire new people.

The startup’s software is designed to simplify investing, says founder and CEO Justin Tjoa. (Update January/25/2015, 11am: This passage was updated to reflect that AlgoMerchant’s services cater to all investors, including small-scale, professional, and high net worth individuals.)

How precisely it achieves this and what its core features are remain shrouded in mystery for now. This is “due to the competitive nature of our business,” Justin explains.

He only reveals that AlgoMerchant’s users will get access to a “peer-to-peer investing ecosystem” – an environment which helps investors make better investment decisions based on technology and social networking.

One of the main sources of revenue is a monthly subscription fee, Justin says. Basic membership is free, but you can subscribe to a premium service which lets you invest using a top money manager’s “algorithm.” The price varies depending on which algorithm you choose to follow. In one particular example, members could follow Robin Ho, a well known investor from Singapore, for S$49.99 (US$35) a month.  (Update January/25/2015, 12pm: An earlier version of this article failed to mention that the basic service is free and that the pricing for the premium service isn’t fixed.)

Justin is experienced in both the world of investing and software development. He had seen similar solutions targeting non-institutional, so-called retail investors, but found none of them very efficient. He saw a huge business potential waiting to be tapped with the right approach and technology.

“Having worked as a software developer, business analyst, and consultant to traders in the electronic trading business gave me a good all-round perspective on how to run a similar business,” Justin explains.

He quit his job to pursue his startup idea in 2014. AlgoMerchant participated in the NTUitiveincubator, which is associated with Singapore’s Nanyang Technological University. The startup currently consists of a 10-person team.

While the company’s product is still awaiting public launch, it says it currently has “around 100” test users, consisting of money managers, professionals, and investor friends.

The startup claims it already partners with a number of major financial institutions and professional money managers.

For the short term, AlgoMerchant plans to target retail investors domestically. It estimates there are about one million such investors in Singapore. It won’t stay that way though. The startup is looking at global expansion. It currently supports access to investment products traded in Singapore and US exchanges.