With funding from a Tencent founder, he’s simplifying cross-border money transfer

Koku co-founder Calvin Goh / Image credit: Koku

Calvin Goh was working as a business consultant in Europe when he started seeing a pattern: clients were turning to him for remittance advice. Back then, existing cross-border money transfer solutions were wanting. And so the seeds were sown for a business idea that would eventually connect him with Jason Zeng, co-founder of Chinese internet titan Tencent.

“I started looking for contacts to find out how I can help my client solve his problems. I was introduced to a licensed money service operator in Hong Kong who could help,” says Goh. “We got to talking, and he shared with me some problems he faced as a remittance provider.”

Goh wanted to help meet this person’s needs on top of those of his client’s, but he wasn’t thinking of starting his own business to do it.

Nevertheless, the finance and economics master’s graduate continued searching for an answer. He realized that even with technology’s rapacious appetite for advancement, cross-border payments were still trapped in a digital backwater.

“Many players still have to do manual bookkeeping and human-intensive procedures. The exchange rates are also not optimized,” says Goh. Believing that the industry is ripe for a tech makeover, he formed payment startup Koku in the early spring of 2016.

A decent investment

While many payment solutions focus on small consumer fund transfers, the 33-year-old Singaporean set his eyes on corporate transactions involving larger amounts.

“The minimum transaction on our platform is US$8,000 per client. The biggest deal we’ve done to date was about US$4 million for one client alone,” says Goh, explaining what sets his startup apart from a majority of payment apps in the country.

At present, the company runs on the founder’s own capital alongside money from angel investors. But a home run for the year-old startup came in the form of a half-a-million investment supplied by Jason Zeng via Decent Capital. Zeng started the investment firm in 2007, after leaving Tencent as its chief operating officer.

Singapore-based Koku has managed US$23 million worth of foreign exchange (FX) transactions to date, averaging between US$300,000 to US$800,000 each day. It works with licensed remittance houses like CYS and Hanshan, private equity firms, and non-bank financial institutions in multiple countries across Southeast Asia. It manually matches these players together to broker FX transfer deals.

Middle: Jason Zeng, co-founder of Tencent / Image credit: Koku

Known as liquidity providers, these institutions buy and sell currencies in large amounts for business reasons. Traditionally, they would exchange foreign currencies with banks which trade mainly in US dollars or euros. For volatile and minor currencies like the Thai Baht or Malaysian Ringgit, which can be affected by policy shifts, banks do not offer competitive rates.

“We focus on remittance houses and small-to-medium firms because they tend to get less competitive rates from banks compared to multinational corporations which have higher liquidity,” he adds.

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