The profitable fintech startup that took off after pitching to Jack Ma on a cruise ship

A leading fintech startup from Singapore is tucked away in an unlikely place: a church building in a low-key industrial town, a short train ride away from the city.

It’s apt in some ways: Richard Koh, the 47-year-old CEO and founder of M-DAQ, says he’s a believer. The office location, however, is purely coincidental.

“Faith really helps when you’re going through a crisis,” he tells Tech in Asia.

M-DAQ went through a baptism of fire after starting in 2009. Specializing in technology that enables currency exchange at low cost, the company ran out of money when a deal fell through.

It survived after the team made sacrifices and received some timely funding. It took off after a plum deal with Alibaba – which came about after one of M-DAQ’s investors gave an elevator pitch to Jack Ma on a cruise ship. The ecommerce giant became its top customer and an investor through its affiliate Ant Financial.

In 2018, the low-key startup hit full-year profitability for the first time. It handled US$4.8 billion in transaction volume in the same period, resulting in a revenue of US$31 million.

It’s set to grow again. Revenue for Q1 2019 increased 30% year-on-year, and it expects transactions to hit US$7.2 billion by end-2019. All of this has been done without offering any discounts. As an internet company offering a standardized product, it has the potential to multiply its revenue with little additional costs.

Granted, Koh expects headwinds this year due to the economic uncertainty. The company is also investing heavily in expansion and that will eat into its profits. But he expects M-DAQ to stay in the black. It has a large cash pile too – for a startup, at least. When we met to discuss the story, it had US$29 million in the bank. A week later, that number jumped by a million.

Overachiever

Koh would’ve been considered a problematic 14-year-old in 80’s Singapore. Back then, he rounded up a few schoolmates to start a company that made and sold computer games. He was so focused on it that he flunked the all-important ‘O’ Level examinations.

Because of that, he couldn’t get into a junior college to take up the computing course he wanted. Instead, he entered the now-defunct Seletar Institute, a school for people who wanted a pre-university education but didn’t make the grade for junior college.

“It was like a halfway house. A place that collects all the education system’s failures,” he says.

Coming from a poor family, Koh had to help support them even as he kept up with school work and chased his ambitions.

Besides preparing for his ‘A’ Level exams, he was picking up two diplomas – one in computer studies and the other in accounting. Armed with a computing qualification, he began teaching the subject in night classes.

The seeds of M-DAQ

An unlikely benefactor

The term sheet that almost killed M-DAQ

Hit by a bus

Pitching Jack Ma on a cruise

New challenges