Ex-banking and finance professionals shake up Singapore’s start-up scene

Six local founders tell Channel NewsAsia why they were willing to ditch the promise of six-figure bonuses as bankers, traders and financial analysts for the hard-toiling life of making a start-up work.

SINGAPORE: When first-time entrepreneurs Daniel Chia and Cynthia Siantar quit their jobs at major financial institutions to create geolocated social networking app BlastOut in 2013, they faced objections from their family members, with Mr Chia's father commenting “IT cannot make money one, lah."

For their families, ditching a career as an investment banker, with its perceived prestige and financial rewards, for the uncertain life of a tech entrepreneur seemed like an odd career move.

However, the duo persevered and moved on to a second venture a year later – financial technology (fintech) start-up Call Levels, which has since raised US$500,000 (S$674,264) from US venture capital firm 500 Startups and several prominent angel investors, including local financial industry veteran Timothy Teo.

Mr Chia, 36, and Ms Siantar, 29, represent an emerging trend in Singapore’s start-up scene, where more banking and finance professionals are viewing entrepreneurship as a better alternative to the money markets.

According to recruitment consultancy Robert Walters Singapore’s senior consultant Faiz Modak, former bankers, traders and finance analysts now make up the bulk of mid-career professionals venturing into the start-up world.

“It could be a senior executive from a bank who has worked at all levels and opts for a challenge to drive a start-up business, or it could also be a young graduate who wants to be independent and work on the latest and coolest technology which the bigger firms sometimes struggle to offer,” said Mr Modak, adding that this group of aspiring founders are usually lured by the sense of job satisfaction and purpose, as well as the flexible working environments that start-ups offer.

And it seems that dealing with specific frustrations experienced in the industry are an added incentive for wannabe entrepreneurs.

Call Levels helped to address a long-standing need in the industry for a simple monitoring tool, according to Mr Chia, who had more than seven years of experience at Ortus Capital Management and Singapore’s sovereign wealth fund GIC. The platform allows both retail investors, as well as seasoned traders and private wealth managers, to set specific price levels that will trigger the app to send out notifications when attained.

“There are many things you wish you can change after having enduring the pain, but you can’t because of the many layers of bureaucracy. So the way to resolve this is to be detached from the industry and do it via a start-up,” added Ms Siantar, a former investment analyst with Mercer Investment Consulting and equity capital markets associate at HSBC.

“We were from the industry so we knew what the problems were. Who else apart from us can better fix them?”

The urge to provide “fairly obvious fixes” to lingering, unresolved issues due to the rigid nature of banking and financial institutions also prompted veteran investment banker Tanmai Sharma to come out of retirement.

“When I left banking, I had no intention of doing a start-up but once you leave and start looking at specifically how the wealth management industry is run, you see these fairly obvious fixes that you can do and represent big business opportunities, then the idea just takes over your life,” said the 47-year-old who retired in Aug 2013 after being a trader for more than 20 years. He founded Mesitis two months later.

The fintech start-up’s flagship product, Canopy, sought to help wealthy individuals compile their financial data across various banks and financial institutions – a service that is expensive to offer and not readily available at the moment.

While Mr Sharma noted that banking systems needed to be rigid due to the nature of its business, it inevitably stifles creativity. “If I was doing up this product at a bank, it would have needed a lot of approval and the involvement of many people. But now I don’t have to so that’s the fun part.”

Mr Tanmai Sharma started Mesitis in 2013 after spotting "obvious fixes" that he could create to fix the gap in the wealth management space. "It's a reflection of how broken the system is," he said. (Photo: Tang See Kit)

STARTING UP BEYOND FINTECH

For many banking and finance professionals, fintech seems to be the most obvious path to take but there are also those who have their sights on the burgeoning opportunities in sectors such as e-commerce and property.

Serial entrepreneur Lai Chang Wen, for one, set up Ninja Van in 2014 after spotting gaps in Singapore’s logistics services which is playing catch-up with the rapid growth of e-commerce. The last-mile logistics start-up now counts renowned brands in the region, including online and offline retailers Lazada, Zalora and Charles & Keith among its clients, and launched its services in Malaysia in Mar 2015, marking its first foray into an overseas market.

According to the 29-year-old who co-founded custom apparel retailer Marcella prior to Ninja Van, there are currently more than 5 former investment bankers and traders from the likes of Morgan Stanley, Deutsche Bank, Macquarie and Citibank on his team. Mr Lai, an ex-trader with Barclays Capital, attributed that to the growing notion of pursuing one’s passion among the millennial generation.

“There are more interesting jobs than banking and finance,” he said. “(It) is challenging, but it doesn’t expose you to a lot of things… You are stuck in the same stratosphere with the same people and career progression is all about having a bigger book to trade or in banking, meeting more clients and getting more deals done,” he told Channel NewsAsia, adding that even with the “obscene amount of money” that came with the job, "you see enough in one year”.

“I looked at my boss and realised I don’t want to be doing that in 20 years’ time. I don’t care about the money or prestige anymore.”

For the founders of online property brokerage firm Greyloft, it was the combination of a plateauing learning curve and the allure of venturing into the ever-growing property space that paved way for the career switch.

Co-founder Siddhesh Narayanan, who joined Standard Chartered as a transaction banking analyst after graduating from the National University of Singapore (NUS), said: “Initially, the learning curve is very steep but it eventually starts to taper.”

“Usually at the three-year mark, a lot of people either choose to do an MBA, have a change of environment by switching companies or countries. For us, it was always about building something,” he added.

“MY PARENTS THOUGHT I WAS CRAZY”

Unsurprisingly, the switch from a commonly-perceived prestigious job in the banking and finance industry into the hard-toiling life of making a start-up work has not been easy, with some founders having to overcome family objections and getting used to lifestyle changes.

Ms Siantar from Call Levels said her family, in particular her parents, were “the main source of rejection for the longest time”.

“My parents thought I was crazy… especially when we were doing BlastOut because back then not many people understood the idea of a start-up and the product was non-tangible. So the most common question I had was ‘When are you going to start looking for a real job?’ even though I was going to work everyday,” she said.

“It’s interesting because my dad came from a business background but that was also why he didn’t want me to do it. He knew how much hardship I would have to go through."

"The most common question I had was ‘When are you going to start looking for a real job?’ even though I was going to work everyday."

For Ninja Van’s Mr Lai, the early stages of setting up the company saw him and his co-founders clock 21-hour work days for nearly three months. “We would sleep in shifts because the systems were not that stable then but we had to make sure that operationally, everything worked. That was very, very draining but I don’t think at any point we regretted it.”

Instead, the hardest part came in the loss of a comfortable monthly salary, which the founder said was painful to get used to.

“When friends ask you out for meals that cost S$50 to S$100 per head, you forget it because that’s equivalent to a month’s worth of chicken rice. You see your friends a lot less; you’ll get a bit lonely. You are also busy and poor,” he said. “That’s not a good combination.”

“My regret was that I should have worked maybe for another year in banking because I really didn’t save enough money to survive so I had (situations) when my bank account didn’t have enough money to top up EZ-link. That was quite sad,” Mr Lai recounted.

To be sure, there were advantages that these founders reaped from their backgrounds in banking and finance.

In a recent interview, online recruitment platform Venn’s CEO Candice Aw said her experience as a banker helped to instill confidence in prospective investors.

Mesitis’ Mr Sharma agreed: “They are looking for someone who can do justice to their investments so the fact that you were a senior banker and you understand the financials give comfort to these investors.”

Other founders believe that their stints at major banking and financial institutions have helped them to amass a wide range of skills applicable to running a start-up.

“In retrospect, my time at Barclays was a really good experience,” Mr Archit Agarwal, co-founder of Greyloft, said. “Not just about finance and knowing how to make a pitch to investors, but I also learnt a lot about working with people from different countries. Now that we have people in 3 different countries, it helps me in terms of managing these teams.”

“Banking was a good experience,” said Greyloft's Mr Archit Agarwal. However, a plateauing learning curve and the urge to develop a product he can call his own eventually prompted him and university mate Siddhesh Narayanan to venture into the tech start-up world. (Photo: Tang See Kit)

A TREND YET TO REALISE FULL POTENTIAL: OBSERVER

Moving forward, Robert Walters believes that the osmosis of banking and finance professionals into the start-up scene will continue.

“It's a trend that is catching up but yet to realise full potential,” Mr Modak said. One contributing factor is the deteriorating outlook for the global banking industry amid news of job cuts and downsizing. Meanwhile, the swift pace of developments in the fintech, data science and analytics sector will likely help start-ups win over more mid-career professionals looking for change, the senior consultant added.

Founders also told Channel NewsAsia that a step-up in the Government’s fintech push, ranging from state funding and a recent move by the Monetary Authority of Singapore (MAS) to allow start-ups to test financial products in a controlled environment, will bolster the flourishing scene’s ability to attract more aspiring entrepreneurs.

This will help invigorate the local start-up scene, according to Mr Sharma, who noted that founders tend to create different types of products according to their age and experience.

“I see two kinds of founders. The young people with two to three years of experience in banking and want to make something new, and then there are people like me who are white-haired and have been through a lot more,” Mr Sharma explained.

“I see that manifesting in the type of products that each profile creates. The younger (generation) tends to be retail or social media-heavy, and will create something that involves social interaction. But for me, it’s analysis of a different kind. I’m thinking what is the market doing at that time, what happened for example did the US Federal Reserve cut interest rates.”

With the outlook for the local start-up scene brightening, Ms Siantar recalled the past with a laugh: “Everyone thought I was crazy to leave because times were good then. But now, people are complaining about risks of getting retrenched… and they are telling me that actually I made the right choice.”