Moving ahead with confidence

M-DAQ's boss Richard Koh talks about the three growth engines that are expected to power the fintech startup in the next 12 to 18 months.

IT is "wartime" for homegrown fintech startup M-DAQ, says founder and CEO Richard Koh.

But not, as one might think, because of economic turmoil unleashed by the Covid-19 pandemic. No, the 10-year-old startup was battle-ready even before the global economic forecasts for 2020 unravelled.

"We have been in wartime mode since 2019, as we needed to significantly attain the inter-related dual goals of business and cap-table diversification. From mid-February 2020, the rest of the world also entered into 'wartime' and 'survival' mode. We're likely to see this same mode for the better part of 2021 globally," says Mr Koh, 48.

M-DAQ, meanwhile, is forging ahead with plans for a public listing, even going on the offensive to pursue previously unlikely clients and opportunities.


It was with a vision of creating a "world without currency borders" that Mr Koh founded M-DAQ at the start of 2010.

He is candid about the roller-coaster ride it has had. M-DAQ's website chronicles vividly the ups and downs, including a plunge into what it calls the "valley of death" in 2012. A major deal fell through, funds nearly ran out, and Mr Koh drew no salary for months.

But that is behind him now and M-DAQ is on the ascent. The solutions it provides range from multi-currency international securities trading to a global clearing network for e-wallets. It also helps micro, small and medium enterprises hedge their forex risks.

Its Aladdin e-commerce solution allows merchants to offer local prices to their global consumers at guaranteed forex rates, ridding both parties of the uncertainty of credit card forex charges. M-DAQ can guarantee attractive rates because its proprietary data-driven system predicts pricing and hedges accordingly.

If shoppers can buy online in their home currency while merchants get paid in their currency of choice, without fretting over forex rates, that fulfils the company's central mission of breaking down currency borders.

M-DAQ broke even at the start of 2018, turning around a S$6.6 million operating loss in 2017. In FY2019, it raked in revenue of S$46 million on the back of S$10 billion in gross transactions.

And this year, Mr Koh is one of EY's three Entrepreneur of the Year award winners for Singapore, picking up the award in the financial technology category.


M-DAQ entered the current turmoil in a position of strength. Its latest valuation - at the pre-series D round last November which brought in fresh funds from South Korea's Samsung and Japan's Nippon Telegraph and Telephone (NTT) - is in the S$500 million to S$700 million range, according to Mr Koh.

It has raised S$82 million in equity so far and entered 2020 with S$56 million in reserves. "We were originally looking at deploying our cash reserves for M&A (mergers and acquisitions). However, with Covid hitting the world in March, we decided to keep it as a "war chest" instead, in order to come out stronger from this long corona war."

With 10 successive quarters of positive net profit, its aspirations to launch an initial public offering remain intact. Although pinning down the exact timing is a challenge in the current state of flux, a listing is still expected next year or the year after.

Efforts to diversify have also borne fruit. The company's strategic partnership with NTT Communications in Japan has yielded new revenue streams which will materialise next year; it hopes to achieve the same in Korea through Samsung. "There are also several beach-head projects happening in Asean, as well as in Europe," Mr Koh reveals.

But there is no denying that 2020 has been a "perfect storm" for many of M-DAQ's clients. With clients in survival mode or downsizing, critical projects have been put on ice. "We had several original 'go live' projects as part of the Tokyo Olympics in July, but that's now postponed by a year. A few of our on-boarding projects were with airlines, events venue operators, online travel agents and neobanks. All these sectors have suffered temporary suspension in normal business activities."

Through that fog, 'the best way to predict the future is often to invent it", says Mr Koh. "Times of crisis force some players to quit... and the survivors get a chance to further innovate and grow in significance."

For instance, M-DAQ has secured partners who would not have been interested earlier but are now willing to experiment. Mr Koh adds: "Clearly, businesses can no longer treat online digital presence as an option. We are getting quite a bit of enquiries from non-traditional businesses who are now rushing to digitise."

It has branched out from its unrelated verticals of stock exchanges and online e-commerce businesses to start talks with firms in other sectors who are now eager to develop a digital strategy.

A crisis like the current one also highlights "pain points" - opportunities for new solutions.

One such pain point is the fact that many travellers still visit a money changer for cash despite the prevalence of e-wallets and credit cards. M-DAQ's solution makes domestic e-wallets usable abroad, replacing the money-changing process with a digital top-up that allows for cash withdrawal at airports, shops and hotels. Then, within two weeks of returning home, the traveller can exchange any unused foreign country balances at the same rate as before.

Mr Koh sees M-DAQ's past decade in two halves. The first five years were spent on building deep tech expertise in foreign exchange, while the second five revolved around developing proof of concept of its technology to provide price certainty on e-commerce and remittance channels.

"This has confirmed that one, the technology and risk models work, and two, it is highly scalable... and three, that it is ready to be deployed to other geographies and platforms."

So even as uncertainty swirls, Mr Koh is confident that M-DAQ will, in the next 12 to 18 months, be powered by three growth engines: deployment of its Aladdin tool to more platforms and geographies, going live with at least one major global stock exchange and its Japan initiatives.


Mr Koh says his entrepreneurial career has never been about personal wealth creation or fame. Apart from working towards "a world without currency borders", he seeks to be "part of a new generation of Singapore born and bred technopreneurs, in order to help create a movement".

The last success story, Creative Technologies, was three decades ago now, he says. A new story is needed. M-DAQ is still on its journey but has survived close to 11 years now, so his hope is to pay it forward by mentoring a new generation of local startups.

The only child in a poor family, Mr Koh says he always had to be enterprising to make ends meet. He was 14 when he first attempted to build a software company - a venture he kept at for three years but which eventually folded.

Business failure was accompanied by academic failure - his grades did not secure him a place for a two-year A-level course. However, a "series of academic pivots" led him to secure a scholarship to read accountancy and eventually qualify as a chartered accountant.

His big break came when he joined his then-audit client JPMorgan Chase Bank in its Global Markets/Foreign Exchange division. "The next decade was spent gaining a deep understanding of the domain and being an 'intrapreneur'," says Mr Koh, who worked his way up to become the bank's regional head of e-commerce.

He is keenly aware of others' contributions to M-DAQ's success, particularly their confidence in what could not yet be seen. Pivotal moments included the first angel investor who put in S$500,000, the Singapore Economic Development Board's seven-figure grant on the back of a promise and a business plan, and Ant Group's 2015 investment which catalysed M-DAQ's learning about cross-border e-commerce - the backbone of its past four years' growth.

Asked about the biggest influences on Richard Koh the entrepreneur, he says his Christian faith drives how he plans, acts and reacts in life and business. At work, this has meant seeking to model servant leadership of his 65-strong team at M-DAQ.

It is a lean team which Mr Koh reckons gives M-DAQ one of the highest revenue per headcount among regional fintechs. "If our volume of business increases by five times, our cost base would probably only increase by 20 per cent, making this very scalable," he says.

Recognising the vital support of family and friends - by which he refers chiefly to his own colleagues - Mr Koh spoke of their invaluable constancy during M-DAQ's 2012 "valley of death" episode. "Nearly a dozen decided to cast their lot with me and go on a no-pay basis until we found new funding," he shares.

"Entrepreneurship is living a few years of your life like most people won't, so that you can spend the rest of your life like most people can't," adds Mr Koh. And he could not have lived those few years that way without the people around him.

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