Investing in Endowus to help build trust — and moats — in Asia-Pacific’s wealthtech ecosystem

Across the Asia-Pacific (APAC) region, wealth technology (wealthtech) is primed to take a major step forward.

This holds particularly true in Hong Kong and Singapore, two of the world’s largest financial hubs. With roughly $3.7 trillion in combined cross-border assets under management (per Credit Suisse), Hong Kong and Singapore both boast significant concentrations of high-net-worth individuals and some of the highest consumer fintech adoption rates in the world. Yet, while these macroeconomic factors provide fertile ground for digital wealth management solutions to take root in the region, the adoption of such services by retail investors has lagged behind other parts of the world.

This may be due, at least in part, to the fact that retail investors in these markets have historically struggled to access wealth advisory services, which tend to charge high transaction costs and provide little transparency into their offerings. Traditional wealth advisors in Hong Kong and Singapore are often paid on commission, which incentivizes them to steer clients toward investment products with higher fees rather than those best suited to their needs.

In the spirit of providing a better wealth experience for the retail investor, several wealthtech startups are emerging in APAC. The clear front-runner among these firms is Endowus, the newest addition to the Citi Ventures portfolio.

Headquartered in Singapore with a recent expansion into Hong Kong, Endowus provides its users with an affordable, commission-free, advice-led digital wealth management platform — a platform that we believe is the most durable and complete in the region.

Endowus’ primary offerings, Advised Portfolios and Fund Smart, democratize access to best-in-class investment strategies and advice across both public and private markets and alternatives for retail investors in APAC.

• Advised Portfolios is a robo-advisory tool designed by a tenured investment team that screens and analyzes funds and products globally, selects the best-in-category products and builds diversified and optimized portfolios at low cost to serve the client’s needs and goals.
• For investors who want to manage their own portfolios, Fund Smart provides a curated platform that offers 300+ strategies from 70+ global managers for investors to choose from, often making institutional-grade investment strategies available at the lowest cost.

Both offerings provide differentiated value by giving users exclusive fund access across public markets, private markets, hedge funds and alternatives while helping them systematically allocate their capital across customized portfolios and individual funds based on their unique risk and liquidity profiles.

In building its client base to over 100,000 users, Endowus has effectively overcome the “cold start problem” that often hampers the growth of new digital wealth solutions, whose early clients are expected to entrust meaningful portions of their wealth and savings in an unproven product/platform. Endowus bridges that “trust deficit” in several ways:

• Zero conflict: Its business model incentivizes objectivity in its digital-led advice by removing all conflict by design: Endowus is compensated not on transaction volume but on low fees for the assets administered on its platform, which is more aligned to the client outcome, and it rebates any fees earned by fund managers to its clients in whole.
• Pension moat: Endowus is the first digital wealth platform to be effectively approved by the government to serve individual investment accounts of Singapore’s national pension scheme, the Central Provident Fund (CPF). This level of regulatory compliance enables investors to contribute to their retirement accounts through Endowus, deepening user trust in the platform and helping build a strong moat around Endowus vis-a-vis other platforms in the market.
• Strength in numbers: As Endowus has expanded its assets under advisory to $5 billion — surpassing all other independent digital investment platforms in APAC — it is increasingly able to work directly with world-class fund managers for institutional-grade (and lower cost) investment products. Its expansion to private markets and alternative funds traditionally the purview of institutional investors is another exciting new opportunity for growth that sets Endowus apart from its peers. Thus, Endowus has truly democratized access to best-in-class funds for its retail investors.

This strong value proposition, effective flywheel and leading market position underscore the exceptional execution of the Endowus team, expertly led by co-founders Samuel Rhee and Gregory Van. Sam, Endowus’ Chairman and Chief Investment Officer (CIO), has three decades of experience in institutional investment management, including as the CEO and CIO of Morgan Stanley Investment Management Asia. Meanwhile, CEO Gregory played a pivotal role in scaling fintech adoption across Southeast Asia as a Senior Regional Manager for Payments at Grab (another Singapore-based Citi Ventures portfolio company), where he helped launched the company’s digital payments services in the region. They have built around them an exceptionally talented management team that has deep financial service and technology expertise driving faster time to market for its innovative solutions.

Thanks to the team’s expertise and vision, Endowus has achieved rapid, steady growth and established a durable moat around its platform. The company’s emphasis on reducing the barriers to high-quality investment management also resonates deeply with our focus on supporting initiatives that prioritize customer-centricity, financial innovation and access to global wealth opportunities. That’s why we are delighted to announce our investment in Endowus. With this investment, we join Lightspeed, Prosus, UBS, MUFG and EDBI in supporting the company’s journey to becoming an enduring leader in the wealth management sector. Our congratulations to Samuel, Gregory and the entire Endowus team!