Sequoia-backed StashAway’s revenue grows 2.5x, but losses widen

StashAway, a Sequoia-backed wealth management platform, has recorded revenue growth of over 150% year on year (YoY) during the financial year ended 2021.

Team StashAway/ Photo credit: StashAway

However, this increase comes off of a small base, as a closer look at its top line in 2020 shows that revenue was only S$3.2 million (US$2.3 million).

Founded in 2016 by former Zalora CEO Michele Ferrario, former Nomura global head of derivatives strategy Freddy Lim, and Divvit co-founder Nino Ulsamer, StashAway personalizes financial planning and portfolio management for both retail and accredited investors.

Its client base is largely made up of people between the ages of 30 to 45 who are earning enough money to save or invest.

Some of its local counterparts include Endowus and Kristal.AI, but StashAway considers traditional banks – where clients still park most of their personal wealth – as its biggest competition.

Despite the increase in revenue, the Singapore-based company also saw a 128% YoY rise in losses coming in at US$22.7 million. According to Ferrario, who acts as the firm’s CEO, the losses include costs related to the company’s stock option plan, “which is very generous.” In 2021, the company recorded share-based compensation amounting to US$8.8 million.

“Since foundation, we made the decision to award meaningful stock options to every full-time employee in the company, irrespective of their seniority, as we want everyone to participate in the value we are jointly creating,” Ferrario tells Tech in Asia.

In June, the company laid off 31 employees, or 14% of its staff, which could be seen as a bid to arrest the firm’s rising losses and improve unit economics.

StashAway earlier said that the layoffs were a result of company restructuring that made certain roles redundant. It currently employs 170 people across its offices in Singapore, Malaysia, Hong Kong, Thailand, and the United Arab Emirates.

Most revenue generated from Singapore, Malaysia

StashAway’s 2021 revenue was driven by new clients as well as existing ones that have continued to increase their investments on the platform, says Ferrario.

However, the company faced backlash from its users in early 2022 for liquidating its holdings in a key China technology fund. A day after the sell-off, Chinese stocks bounced back to their highest level since 2008.

Personnel costs were the largest expense

Cash balance