AIZEN, an AI-focused Fintech company based in Singapore, today has announced that it has signed a definitive agreement to acquire an e-commerce merchant cash management platform in Korea as part of its vertical date economy integration strategy.
There are different types of retail e-commerce sites in Korea: open markets like Naver Smart Store; social commerce like Coupang; existing retail giants; and MZ-favored vertical platforms such as Musinsa, Brandi, and Zigzag. A seller typically diversifies their sales channels from nine to ten malls on average, and each mall settles the sales payment within nine to eleven days.
This is a real hassle for sellers when it comes to cash management, since every mall has different sales payment cycles and policies. The company AIZEN is acquiring is addressing the practical needs of sellers that are looking to scale, by enabling critical cash flow management functionality via its own cash management platform.
It provides online sellers with tools to monitor and control their cash tied to multiple e-commerce sites, including their sales, expected settlements, refund history, as well as daily reports on when the sellers can receive its sales payment, by malls, by settlement date, and by different delivery status.
The acquired company is the only company that has managed to connect to over 42 online and offline malls. Their competitiveness comes from its 10 years of know-how and expertise on different settlement policies every e-commerce site has, as well as their backend infrastructure that is constantly being updated.
To date, there are thousands of registered merchants with gross transaction value(GTV) of over US$2.5 billion. Leading banks in Korea have already approached and partnered with the company for its data availability and applicability in merchant loan underwriting.
However, working with legacy banks entails months-long process from discussing product schemes, validating technology requirements, checking regulatory compliance, and to final integration. Even the loan supports only a limited number of malls which also narrows down the number of options available for the sellers.
The acquired company has its account receivable financing system called GSM which have originated over US$600 million loans for the last couple of years. The loan decisions were based on the multiple sources of data it has collected from e-commerce sites, banks, payment gateways and VAN companies, as well as inventory, warehousing, and fulfillment data from the third-party logistics(3PL) partners. It is favoured by many sellers as they can see the scattered information across their malls with just a few clicks and easily apply and get loans in one-stop.
AIZEN will leverage AI technology to offer sellers even more value with CreditConnect, backed by a strong financing partner including credit funds. CreditConnect handles the core operations around the credit cycle, which it aims to design and build as an Autonomous Banking Operating System that fully automates core credit decisions from customer acquisition, product development, risk management, and collection.
This also benefits the financing partner as they can rapidly expand their retail assets without having to set up a separate operation team.
Loans will be originated based on sophisticated AI modeling, with differentiated credit limits and rates for each merchant based on their sales and product return risk scores. It is powered by AIZEN's proprietary AutoML engine called ABACUS, which is used by some of the largest banks, credit card and insurance companies. It has also been recognized by the Monetary Authority of Singapore as a global winner at the MAS Fintech Award.
"With the addition of an e-commerce data aggregation platform, we can strengthen our AI-powered lending platform and further enhance our data economy ecosystem across the entire value chain in the e-commerce industry." said Jung Seok Kang, CEO of AIZEN. "We are working to expand the same business model in different countries as we standardize the process and infrastructure to achieve high scalability."
"The acquisition will allow us to better serve our sellers through a range of tailored financing and lending options" said the CEO of the acquired company, and "we are excited for this opportunity to continue to support sellers to harness their cash flow and scale up quickly".
The acquired company will continue to operate as an independent subsidiary of AIZEN. Starting with CreditConnect E-commerce, AIZEN plans to enhance its vertical data economy integration strategy across Southeast Asia including Vietnam and Indonesia, and expand to mobility, gig economy and other potential data economies to come.
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