OctiFi is a Singapore-based fintech startup that helps SMEs tap into new gen consumers who desire the convenience of interest-free credit without escalating credit card burden. The company is creating a mobile-first platform that enables merchants to offer instalment credit at the point of sale with zero integration.
Current Status
Since launching on July 2020, we have achieved S$175k GMV across 28 paying merchants and 135 consumers. In terms of merchant brands, we have global retail brand EVISU, and listed aesthetic companies such as Accrelist and IDS/JYSK on our network. But in terms of raw productivity, we are finding our MVP merchants on social marketplaces such as Carousell. Our top 2 merchants have each done 25+ transactions.
Problem or Opportunity
Buy Now Pay Later currently exists as an unattended payment option during checkout on e-commerces. Outside of the e-commerce construct, it's not a service that is accessible by most consumers and merchants. For example, Lazada has over 1.7M merchants on their platform, yet 90% of these merchants have not completed even a single transaction.
Solution (product or service)
We are creating a merchant super app that empowers the SME merchant to offer Buy Now Pay Later as a new way to engage their customers. We are changing merchants' sales processes by incorporating Buy Now Pay Later as a tool to sell and/or upsell during offline sales or interactive e-commerce. We are getting tremendous traction on social marketplaces such as Carousell. Currently, 60% of Carousell's payment transactions are done through bank transfer, and the rest is mostly cash on delivery. Buy Now Pay Later fills this credit void and is an attractive payment option for a new generation of consumers.
Competitors
Our main competitors in the region are Grab, hoolah, Rely, Atome and Split. Afterpay has announced a global expansion plan in Europe and Asia. It is possible that Shopee or Lazada, the Amazon of Southeast Asia, could enter the market in the future. My biggest fear would be if Facebook or Tencent entered the market. In addition to in person or livestream engagement, Whatsapp and WeChat are the main communication channels that our merchants use to communicate with their consumers, and if Buy Now Pay Later becomes available natively on these platforms, they would be formidable competitors.
Advantages or differentiators
Buy Now Pay Later, in its current form, is not accessible by most consumers in the region outside of the e-commerce setting. E-commerce does not work well with service businesses or products that require greater customer engagement during the sales process. Examples include home improvement contractors, electronics merchants, and certain beauty and fashion segments. Consumers in the region want to be engaged. educated or even entertained when making buying decisions. So we are flipping the script and making Buy Now Pay Later a merchant companion tool for merchants to use during interactive e-commerce, in person, on live stream, or over Whatsapp or WeChat. We have gone head to head with our competitors in a few instances, and we have won over our merchants because we provide a mode of engagement that is currently not in existence. We provide a merchant app that can provide instant custom pricing and offer interest-free instalment credit. We believe this gives us an opening to grow rapidly in social and livestream commerce, social marketplaces and OTO (offline to online) businesses that have large sales teams.
Business model
We take a percentage of order value fee from each merchant for every completed transaction. Assuming we charge a 7% fee, an average transaction size of $600, and 20 transactions each month per merchant, we could achieve $100M revenue with 10,000 active merchants in 5 years.
Money will be spent on
Key staff hiring across engineers, product managers and sales to enable our consumer/influencer platform for social commerce
