On February 9, Grab Financial Group said Chandrima Das left the company, citing personal reasons.
The relationship didn’t last long.
Grab Financial Group acquired Das’s robo-advisory business, Bento, a year ago, in February 2020. It kept the team intact and made Das head of GrabInvest.
What does her abrupt departure tell us about how things are going?
It was about the license
First, it suggests Grab valued Bento for its Capital Markets Services license, which allows it to sell investment products to retail investors.
Bento was too small to be valued for its assets under management. GrabInvest’s business model was different from Bento’s, so there wasn’t intrinsic technology involved.
The other asset from an acquisition is the people. Das brings incredible experience in asset and wealth management. She worked at Prudential Asset Management and ran the Singapore businesses of ING Investment Management and Bank of Singapore – and she became an entrepreneur, founding her own robo-advisory.
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But if Das is leaving so soon, then she probably wasn’t the main reason for the acquisition either.
Terms of the acquisition were not disclosed at the time. If Das is leaving then either Grab wanted to cut costs, or she is headed out because the financial rewards of selling her company were not compelling.
It’s also possible that Das, with an understanding of compliance, regulation, and other facets of doing business in finance, did not fit in with a technology-driven culture. She may have decided that, having sold her business and bedded it within the new owner, it was time to find a new opportunity.
What is GrabInvest today?
What did GrabInvest achieve under her brief tenure?
It launched. That is no simple feat. The service debuted in Singapore in September. Sources tell DigFin the firm is also eyeing activity in Thailand and Malaysia.
The only product to date is its AutoInvest, a micro-investment product in which customers can invest a small amount, as little as S$1, off the back of spending money on other Grab services, such as ride hailing or food delivery. These go into short-duration, investment-grade bond funds or money market funds run by Fullerton Asset Management and UOB Asset Management. These simple products provide a 1.8 percent annual return.
Sources tell DigFin the business has reached “seven digits” of assets under management, which was “better than expected”.
Granted, it’s only been going for about five months, but S$1 million-plus is a modest amount.
(By comparison, StashAway, a cross-town wealthtech selling direct to consumers, has now surpassed $1 billion in AUM, albeit after five years of operating.)
One challenge for GrabInvest is the high cost of customer acquisition.
Grab has a rich pool of data to draw from, from transport to food, as well as its other financial services, including payments, credit, and insurance. But it’s still a taxi company. There’s no seamless conversation around transforming a ride into an investment.
Grab realizes this, which is why it started off with the most basic product imaginable. But it’s not clear how this becomes a profitable business.
Second, how does it move into more lucrative investment businesses? Wealthtech companies provide consumers with investment portfolios built around goals (retirement, a child’s education) or needs. Once GrabInvest’s customers become more comfortable with its Acorns-like offering, will they be willing to invest in a more serious way?
Grab insiders say it’s not obvious that moving into a robo-advisory style offering will succeed. Banks in Singapore have done a good job, often in partnership with B2B wealthtech partners, in providing a digital solution based on a customer’s risk appetite and profile.
One possibility is for GrabInvest to source customers for a partner bank. Or better yet, to partner with Grab’s own bank, now that the firm has received a full digital-bank license in a joint venture with Singtel from the Monetary Authority of Singapore. (These new banks are expected to go live in 2022.)
An established bank would welcome access to Grab’s consumers, but it would demand access to Grab’s data as well. That might not be a good trade for Grab. But its own bank has yet to get off the ground.
Grab has one last competitor to think about: Sea Group, the other winner of a full digital-banking license.
The head of its fintech arm, SeaMoney, is Zheng Yudong, former CEO of PINTEC, which is one of China’s leading robo-advisors.