M-DAQ, Alibaba’s Ant Group and surviving a toxic relationship

Good Morning Dear Reader,   What's the hallmark of a toxic relationship? Using someone for personal gains and then discarding them just as easily. It could be their money. It could be their socio-political standing. It could even be how they make one look. What's the best way to get out of a toxic relationship? Regaining control of your life, being independent, and most importantly, enjoying your autonomy. Right? Now, this is exactly why I think Singaporean startup M-DAQ has been in a toxic relationship with China's Ant Group. Ant invested in M-DAQ's US$87 million Series C round in November 2015 alongside EDB Investments. It took a 40% stake in the startup, with a long-term plan of taking ownership in three years. Wedding bells could be heard in the distance. M-DAQ had something Ant desired—the tech to make e-commerce payments in local currency. For a short while, it seemed like the duo had a good run. Working with Ant and its parent Alibaba gave M-DAQ's revenue an instant boost. After all, it was serving the likes of Alibaba's international e-commerce site, AliExpress. Its sales surged, it basked in Ant's limelight. But every relationship seems great at the start. By 2019, M-DAQ's revenue grew just 8%. And 90% of its revenue was coming via Alibaba in some form. To grow, it had to reduce dependency. What's worse is that Ant was working on a possible replacement for M-DAQ—an in-house alternative. It's safe to say the honeymoon ended fast. Today, M-DAQ is not only competing with its biggest investor, but it's sitting on a 'war chest' of US$55 million. It has also posted two consecutive years of profitability, according to financial data filed in Singapore. How did it go from being Ant-dependent to independent? Jon unpacks M-DAQ's unusual road to redemption in today's story: https://the-ken.com/sea/story/singaporean-m-daqs-balm-for-the-chinese-ant-bite/ (10-minute read) It's particularly unusual because like all toxic relationships, it follows a pattern—one that California-based Quixey didn't survive before M-DAQ. Read the story to know what I'm referring to; it's a free one! Have a good week. Regards, Durga durga@the-ken.com   PS: We're looking for a full-time tech/business reporter to join The Ken Southeast Asia's team. You can find the full details here. What you just read is the personalised daily introduction to The Ken's story. Written by a different person each day. Often insightful, sometimes witty, and very rarely boring. Someone sent this to you? Sign up for free. Don't like these? You can unsubscribe. Want to manage your emails? Click here.