Trust is key, startups told

Trust is key, startups told

Jitta chief says strong customer base crucial

Trawut Luangsomboon, chief executive and co-founder of Jitta, stresses the need for fintech start-ups to develop appropriate revenue making models before transforming into corporations. (Photo by Pattanapong Hirunard)
Trawut Luangsomboon, chief executive and co-founder of Jitta, stresses the need for fintech start-ups to develop appropriate revenue making models before transforming into corporations. (Photo by Pattanapong Hirunard)

Despite growing interest and state support, financial technology (fintech) start-ups should focus on building consumer trust before transforming into corporations, said Trawut Luangsomboon, chief executive and co-founder of Jitta.

"Fintech [start-ups] who cannot generate trust are in a difficult position because they have to rely on support from financial institutions, which could be in conflict with [the idea of] having their own customer base," he said.

Trust is a key factor for fintech start-ups because they are involved in financial operations, added Mr Trawut. He noted Jitta has been building trust through partnerships with the Stock Exchange of Thailand and brokerage firms to provide investment education and financial analysis.

Mr Trawut said that starting a fintech start-up is more difficult than a consumer-oriented start-up as it requires a considerable amount of capital and good networking coupled with experience in the financial realm.

"A good start-up has to manage to survive up until the moment when the ecosystem is ready [to support its business operations]. Then that start-up will accelerate its growth because of its existing branding, customer base and community support," he said.

Fintech start-ups create innovative products and services that compete with the traditional financial services industry. Commercial banks have recently begun following telecom companies, which have been investing in tech start-ups (including fintech) over the past two years.

Jitta for its part is an investment analysis platform providing actionable advice to help investors streamline the decision-making process for their investment strategies.

Launched in January 2014, it offers financial analyses of the stock markets of the US, Thailand, Hong Kong, Singapore and Vietnam.

With a partnership with Thomson Reuters, which calculates some 85 million figures a day, Jitta processes and assesses all the data it receives, compiling only the essentials, such as a business's quality and the company's intrinsic value.

Jitta can be accessed online at www.jitta.com and a mobile phone application was unveiled at the end of June.

There is no fee for using Jitta to help make your investment decisions, but there is a "free-mium" feature, in which users have to pay US$30 per month or $300 annually to access in-depth information on listed corporations' past financial statements. These rates apply to in-depth information for listed corporations in a specific country, meaning users have to pay additional fees if they want to browse that corporation's financial statements in another country.

Mr Trawut said Jitta will transform from a start-up into a corporation once an appropriate revenue-making model is in place.

From a start-up perspective, Jitta should become profitable within five years of operations, he said, citing Google Inc and Facebook Inc as examples of start-ups that turned into profit-making corporations during a similar time frame.

"There should be a clear revenue model by next year to generate income at a certain level," said Mr Trawut.

Most of the angel investors which have provided funding for Jitta are Thai value investors, with Mary Buffett, the renowned American entrepreneur and international speaker, being its most notable foreign investor.

Jitta has operations in Thailand, Hong Kong, Singapore, and the US, but mainly focuses its business growth strategy in Thailand and Singapore due to how investors in these two countries are well-connected and form a niche group, with investment being their common interest, he said.

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