The Challenges
Most of Southeast Asia’s economy is made up of small and medium-sized enterprises (SMEs), which account for nearly half of the region’s GDP. However, many SMEs are still playing catch-up when it comes to going digital.
The construction industry is a prime example, where developing any real estate project is often a multi-year and complicated process. The complexity stems from the various sizes and large numbers of stakeholders across the entire supply chain, including SMEs, landowners, architects, regulators/local governments, financiers/banks and master contractors.
And there is no surprise that most parts of the supply chain industry are still procuring and/or trading manually. But beyond digitalisation, SMEs also often encounter another challenge: financing of any form.
Supply chain financing for SMEs in Southeast Asia is typically viewed to carry a higher risk due to limited credit data and lack of tools for credit decisioning. This often results in lengthy risk assessment and underwriting processes for most SME financing applications. Considering the construction industry’s supply chain, characterised by a relatively long credit cycle, there is a clear and evident demand for credit financing.
One of the ways to mitigate this challenge is through anchor financing, where SME suppliers and subcontractors monetise their invoices with large buyers and leverage the buyers’ credibility to obtain credit or financing. By digitalising the procurement process, where every transaction record is verified and recorded, financial institutions can leverage the transaction data to provide invoice financing to SMEs.
Why Doxa?
We invested in Doxa to help address the challenges faced by SMEs when it comes to digitalising their procurement process, as well as enhancing their accessibility to credit and financing from financial institutions.
A digital procurement platform like Doxa is essential for expediting and automating transaction cycles, which often take place manually. It is also crucial in tracking and analysing transaction data that are usually inaccessible to lenders — this could greatly improve credit accessibility for the supply chain industry.
In the past, the cost of assessing such requests from SMEs was simply too high for financial institutions to make it a viable business servicing the SMEs. But now, by leveraging Doxa, credit assessment and lending can be done by banks at a much more efficient and scalable level.
Targeting primarily the construction industry, Doxa’s procure-to-pay platform, Doxa Connex, provides a clear trail of the transactions that occurred. Such data is able to provide financial institutions the credibility that they need in assessing the creditworthiness of SMEs seeking financing. With Doxa, only verified invoices can be triggered for financing requests.
Years ago, our mission began with addressing the real-world challenges faced by building contractors in Singapore. As we delved deeper, we recognised similar challenges existed in other industries, including logistics and healthcare. Consequently, we are actively expanding our reach to accommodate a broader spectrum of customers and explore new geographies. We take pride in our role of bridging the gap between SMEs and banks, unlocking economic growth throughout complex supply chains for the benefit of everyone involved.
— Edmund Ng, Co-founder and CEO of Doxa
Doxa has cemented its foothold in the construction space by working with some of the top-tier contractors in its home market, Singapore. In addition, the company has entered the Indonesian market, starting with a customer in the healthcare industry. Through various partnerships formed with Visa as well as top banks in Singapore, the company is now working on expanding to Malaysia through a collaboration with a key financial institution.
The success of Doxa’s business underscores the pivotal role of embedded finance in liberating B2B transactions from manual workflows. Through an integrated experience, Doxa seamlessly weaves trade financing into their technological infrastructure.
Doxa was founded in 2019 by Edmund Ng, Leon Yeo and Henry Kwan.
Edmund, a serial entrepreneur, brings over two decades of experience in software development and programming, complemented by Leon’s extensive global leadership experience in business management and strategy development. Henry, a passionate technologist with over 20 years of IT experience in the financial industry, completes the founding trio. They are supported by seasoned professionals with diverse skills in SME financing, procurement, business development and market intelligence, creating a dynamic group with the right combination of skills and a proven track record to drive the platform’s growth.