HSBC invests in Singapore’s customer intelligence and risk assessment startup

HSBC Asset Management, the investment arm of Britain’s HSBC Group, has led a seed round of $4 million in Singapore’s customer intelligence and risk assessment startup Bizbaz, the two said Friday.

Founded in June 2019, Bizbaz offers its proprietary customer intelligence and risk management solutions to banks, insurance companies and fintech startups. The startup has attracted nearly 20 people with backgrounds in behavioral science, health tech, AI and data.

“The problem we’re trying to solve is to empower and enable, whether they are a financial institution, a fintech company or any kind of a B2C company that’s trying to acquire or onboard new customers,” said Hayk Hakobyan, CEO and co-founder of Bizbaz, in an interview with TechCrunch.

In several Asian countries, as high as 80% of the local population does not have credit bureau data and scores to help banks and companies understand their financial position and efficiently underwrite their lending. Bizbaz is attempting to solve this issue by exploring alternative ways to build credit profiles of individuals.

Several firms in Asia are taking a similar approach today, sifting through people’s social media profiles and telco records. Hakobyan said this kind of research requires high accuracy, and some industry practices raise privacy concerns.

In contrast, Bizbaz looks at the available data attributes, including social media profiles and the apps people have installed — and frequently use — on their smartphones. It can also assess someone’s personality and their ability to bear risk by speaking with them for 45 seconds if they don’t have a smartphone, Hakobyan claimed.

Analyzing individuals’ risk appetite through their multiple digital footprints helps the startup limit the instances of false positives and flag people trying to trick the system.

“Of course, false positives cannot be 0% because theoretically, you cannot eliminate all this kind of cases, but we do as most as can be done technologically to potentially eliminate or diminish the chances of that by very extensively training our data systems before even the test, during the test and by the time they reach the actual deployment,” Hakobyan noted.

Bizbaz has different templates based on countries and industries. It also tailor-made its solutions by incorporating data from its clients to meet their specific demands — rather than using a single offering for all its customers.

The development team at Bizbaz mainly works from the Middle East, while its data team is in India and its sales, business development and product teams operate from Southeast Asia.

The investment from HSBC, which doesn’t typically back early-stage startups, is noteworthy for Bizbaz. Hakobyan said the startup’s suite of solutions — and support from New Jersey-based VC firm SOSV — helped inked the deal.

“In ASEAN, the middle class is expected to more than double between now and 2030, to reach 334 million people. Financial services are likely to expand at the same pace if not faster. Our investment in Bizbaz provides a compelling exposure to this market shift in the region and other developing economies. It will support the development of its technology, which overcomes the major obstacle of on-boarding clients with no previous financial records,” said Remi Bourrette, head of Venture Investments, HSBC Asset Management, in a prepared statement.

The startup is exploring to deploy its solutions within parts of HSBC in Asia and Europe, Hakobyan said, adding that it would continue to have the autonomy and the ability to bring in other partners as well as customers including new banks and insurance companies.

Bizbaz plans to spend 20-30% of its fresh funding on outreach and marketing as it has so far generated sales through word of mouth and references. The startup also aims to upgrade its Web presence, recruit more data and software developers as well as data and behavioral analysts and spend some resources on product development, Hakobyan told TechCrunch.

Paul Redbourn, a senior advisor and chief of staff at Bizbaz, said the startup organically made a positive month-on-month growth in revenues.

The all-equity round also saw the participation of Southeast Asian venture capital firm Vynn Capital and new angel investors alongside follow-on investments from SOSV and existing angel investors. Before the latest round, Bizbaz raised $300,000 in an angel round.