Malaysian fintech startup Curlec gets 500 Startups backing

Curlec, a Malaysia-based fintech company, said it has raised an undisclosed amount of investment from 500 Startups. This follows the company’s seed round last year, which was led by Captii Ventures.

Curlec co-founder and CEO Zac Liew / Photo credit: Curlec

Launched in early 2018, Curlec helps businesses collect recurring payments and manage their cash flow more easily. It offers an API that facilitates direct debit bank-to-bank payments and automates the collection workflow.

The startup will use the new funds primarily to scale its team and operations in its home market as it ramps up sales and focuses on merchant acquisition for its target industries such as education, financial services, and property management.

It also looks to add more payment types to its solution and develop banking and software integration partnerships to help it scale in Southeast Asia eventually.

How is it different? Many businesses, especially small and medium-sized enterprises, still struggle with managing their cash flow and getting paid on time.

“Some of the stats are scary: In Malaysia, over 30% of businesses have less than one month cash in the bank and, on average, it takes around 90 days to get invoices paid. This has been particularly magnified during [the Covid-19] lockdown,” Zac Liew, CEO and co-founder of Curlec, told Tech in Asia.

Traditional payment options such as cash, check, bank transfers, and credit cards haven’t been effective in solving this pain point, Liew said. Instead, he sees great potential in direct debit, which is an automated payment method that allows merchants to pull payments directly from their customers’ bank accounts.

The concept of direct debit has been in Malaysia for many years, but only large companies have access to it, as they have the resources to deal with the cumbersome and paper-based processes involved. Liew believes that this leaves SMEs underserved. Curlec is now bringing direct debit online so that even SMEs can take advantage of this payment type.

Some established names in the region offering similar solutions include Stripe, Revolut, and Ezypay. According to Liew, while other players are more focused on ecommerce and e-wallet transactions, Curlec targets direct debit payments.

“This is an area that nobody else here has been focusing on and is a differentiator for us,” he added.

What are its challenges? Curlec has to educate businesses that direct debit is the “best way” to collect payments, get paid on time, and take control of their cash flow, said the CEO. It also has to convince consumers that its solution is a safe, secure, and a convenient way to pay.

What’s the opportunity? The startup aims to build an end-to-end product for managing recurring payments and looks to enter the subscription economy soon.

According to Google, Temasek, and Bain & Company, the digital payments sector in Southeast Asia is expected to reach US$1 trillion by 2025. Meanwhile, the global subscription economy is estimated to reach US$530 billion this year.