Our doubts about GoBear’s viability in 2019

This article was originally published on Momentum Works’ WeChat channel in November 2019. At that time，Go-bear just underwent some management changes，but we had been unconvinced about the business for a while. Nonetheless, this doubt is different from that we had about Honestbee or PolicyPal. 

In 2019, the two co-founders of the Singapore-based Southeast Asia-focused, n financial product comparison platform GoBear have confirmed their departure. CTO Ivonne Bojoh and CCO Marnix Zwart both left. The founding CEO Andre Hesselink has been converted to “Special Advisor” more than a year ago.

At the same time, GoBear also decided to close its Indonesian business in January next year (2020). GoBear has already shut down its business in Malaysia in July this year. Currently operating markets in Singapore, Hong Kong, Philippines, Thailand, and Vietnam.

A huge challenger from Europe?

GoBear was founded in 2014 as a joint venture between two Dutch financial institutions, Walvis Group and Aegon. In those few years, several European parties came to Southeast Asia to do financial product price comparison and traffic generation platforms -they also saw the success of the corresponding European platforms and planned to replicate them in Southeast Asia.

One of the loudest voices is the CompareAsia Group incubated by Nova Founders, which was founded by several former Rocket employees in SEA.

In last summer CompareAsia Group received US$20 million，in B1 round investment from Experian-a US credit agency. Prior to this, CompareAsia had received a total of US$90 million in financing from institutions such as IFC, Goldman Sachs, Jardine Matheson, and SBI.

Experian has also made a number of investments in this field，including in Malaysia’s price comparison platform Jirnexu, India’s Bank Bazaar, C88 operating in Indonesia and the Philippines, and participating in the H round of financing of Southeast Asian giant Grab.

The Call Center

CompareAsia claims to have 60 million users; GoBear claims to reach 40 million users and contains more than 1,800 financial products.

However, those who are familiar with the operations of CompareAsia know that their operating model is still a little far away from the Internet platform. Because in many markets there are KYC and bank/insurance company approval procedures, etc., CompareAsia and many other platforms are actually operating sales centers and collecting documents and applications offline. However, due to the relatively low approval rate, the income for the platforms is actually not high.

in 2018, including S$4.7 million from lead generation and S$1.5 million pure advertising revenue. In 2018, the entire group incurred a loss of S$22.1 million，including S$10.1 million in personnel costs and (notice) S$9.9 million in marketing costs.

This account is actually a bit complicated.

Similarly, Singapore’s MoneySmart’s business in Singapore (mainly credit cards and other relatively standard financial products) is profitable, but its Indonesian business – DuitPintar – has been in terrible shape.

The Southeast Asian version of Shuidichou（水滴筹）

Even in a country like Singapore where the cost of acquiring offline customers is surprisingly high, online platforms can only provide simple standardized products. A little more complicated (such as life insurance) has to be from offline agency channels or banks.

This is why there have been several large-scale lawsuits in Singapore in recent years due to the collective job-hopping of agents. Banks and insurance companies hate and fear agents, and they cannot do without them. They all want to be able to go online to deal with customers directly, which is actually not easy.

A similar question is, does the Shuidichou model work in Southeast Asia (several teams have tried it), or is it better to follow the trend of cash loans and build more profitable loan supermarkets?