Choco Up's development of RBF in Asia
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Who is Choco Up?
Choco Up is a revenue-based financing (RBF) firm that offers non-dilutive growth capital to startups with high growth potential. We have made over 100 investments, totalling US$30 million, and continue to grow rapidly. Choco Up was made by founders for founders and aims to help startups grow by providing them with growth capital that is paid back through a flexible repayment scheme.
Each partnership is tailored to the needs of the borrower. Choco Up’s revenue based repayment model offers collateral free loans without the need of extensive credit history, which is why the success of the startup is of paramount priority. Choco Up has physical offices in Hong Kong and Singapore, but has invested in a total of 8 countries across 10 sectors and has not yet made a ‘bad’ investment.
Development of AI systems in risk assessment
With over 100 investments and not a single default, Choco Up’s expertise in risk analysis allows them to make financially sound investments time and time again. However, we hope to take our risk analysis to the next level by developing proprietary machine-learning technology to aid human analysis of investment risk.
Currently, our risk assessment is done manually through financial modelling done by industry experts. However, machine-learning may be able to unlock further insights through quantitative data analysis, including past investments and profitable business behaviours that make a client more likely to succeed. Not only can these AI systems assist in Choco Up’s risk assessment, but it can also aid startups in making data-driven decisions that benefit their business.
Development of integration-as-a-service (IaaS) technologies for credit analysis
The current model of data collection involves manually retrieving and modelling data from the borrower, in the form of profit & loss (PL) statements, balance sheets, income statements, and online sales reports. However, due to the many steps this involves, there is high risk for error and delay.
By investing in integration systems, Choco Up can develop technologies that readily extract data from multiple platforms or banks to increase the efficiency and accuracy of data collection. These systems can allow our analysts to form financial models with real time data and therefore, make informed funding decisions quicker for the borrowers.
Choco Up’ innovative developments in the Asia Pacific
Choco Up sees technological development as one of its responsibilities as an industry leader of RBF in the Asia Pacific. We hope to develop technology to continue disrupting the venture debt industry and to provide more accessible growth capital to startups outside the rigid regulatory structure of traditional finance companies and banks.
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