Choco Up sets up in Australia to meet demand for growth financing

Singapore’s Choco Up has found a large market in Australia for its growth financing solutions.

Singaporean fintech Choco Up is expanding into Australia to meet a demand for financing among Australian businesses.

The company’s revenue-based financing platform supports fast-growing businesses that struggle to source capital from traditional lenders. Choco Up has disbursed close to A$12 million to date and is looking to disburse A$20 million more in 2024. It is also opening an office, and plans to hire up to 10 staff over the next three years.

Choco Up’s expansion into Australia was aided by Austrade and participation in the Project Lorikeet program, a joint initiative between Austrade and Singapore Fintech Association. The program supports Singaporean fintechs to expand​ ​to Australia, and vice versa. The new networks and knowledge of the Australian e-commerce ecosystem convinced Choco Up to expand to Australia.

‘We do everything we can to help our clients grow their business,’ says Bart Joanilho, ​Country Manager​, Choco Up Australia. ‘We don’t just offer financing. We introduce them to other companies like website platforms and payment providers that can assist them. The faster they grow, the faster we can get our return on investment and provide them with more funding to grow even further.’

A financial booster for businesses

Choco Up was founded by serial entrepreneur Percy Hung in 2018. He founded the company to provide others with what he lacked: a source of capital to grow and scale their businesses.

Choco Up offers revenue-based financing and growth solutions. Its proprietary AI model analyses historical sales data, marketing trends and other factors to forecast a potential client’s future revenue potential.

This helps Choco Up determine if the company is eligible for growth capital financing and how much. Choco Up does not charge interest or ask for collateral. Instead, it charges a one-time fee and takes a percentage share of the company’s future revenue until the repayment amount is met.

‘Up to around 90% of our clients come back for multiple funding tranches,’ says Joanilho. ‘Eventually they reach a level of success where they “graduate” from us in terms of obtaining financing. They can stay on to continue getting access to our growth solutions. Our job is to give them that boost at the start and help them scale at various stages of business growth.’

Meeting a demand for growth funding

Choco Up focuses on 4 markets: Australia, Hong Kong, Malaysia and Singapore.

‘One of our Australian clients told us he had trouble getting financing from banks and other lenders,’ says Joanilho. ‘We were looking to expand and realised this was a great opportunity for us to fill a gap.

‘We serve all kinds of clients,’ he adds. ‘But our technology is especially well suited to e-commerce businesses. It is easy for online merchants to connect their platform to ours. Our research showed Australia is a mature, thriving market for e-commerce. It made sense for us to be here.’

Project Lorikeet gives wings to Australian expansion

Choco Up’s Australian expansion received a boost when it was selected for the Project Lorikeet program. The program is a collaboration between Austrade and the Singapore FinTech Association. It provided:

• insights on market dynamics, regulations and talent acquisition in Australia
• introductions to key stakeholders, including Australia’s fintech ecosystem players, service providers and states and territory bodies such as Investment NSW and Global Victoria
• on-the-ground support during Choco Up’s 2-week-long immersion program in Melbourne and Sydney, as well as targeted market connections and insights throughout multiple Australian visits
• high-profile exposure and networking at events like Intersekt 2023, Singapore Fintech Festival and the Ali Expo.

‘Project Lorikeet allowed us to test the market and see how we would fare in Australia,’ says Joanilho. ‘Austrade was very supportive. They asked us who we wanted to see in Melbourne and lined up as many people as they could. After the program ended, Austrade continued to introduce us to potential partners.

‘The badge of government has also been helpful,’ says Joanilho. ‘It gives our business credibility when meeting with potential clients and partners. Austrade has done so much to pave our market entry.’

Partnerships drive growth

Choco Up is partnering with Australian companies to grow its business. One of them is Hello Clever, a fintech providing real-time payment solutions. The partnership allows Hello Clever to bring Australian e-commerce businesses to Choco Up for growth capital. In turn, Choco Up will refer Australian e-commerce businesses to Hello Clever for real-time payment solutions.

‘We have a lot of synergies in terms of our target clients,’ says Joanilho. ‘We’re all in a similar growth phase. It was very natural for us to start partnering with Hello Clever and a couple of other up-and-coming players in the ecosystem so we can grow together.’

Future plans

Choco Up will open an office in Australia in 2024. ‘You need a physical presence in Australia,’ says Joanilho. ‘It helps build trust and profile. We’ve done a few events, so a lot of people in the e-commerce ecosystem already know us.’

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