For BitRock Capital’s latest “Meet the Founder” episode, we sat down with Yup founder Donny Zhang. An ex-overseas CEO of Qihoo 360, Donny spoke of his journey that took him from the peaks of climbing the corporate ladder, to creating Southeast Asia’s first credit-based neobank.

Q. What was your career before founding Yup?

Donny: I started out with Accenture, consulting on overseas market entry strategies for companies based in China and elsewhere. After more than four years, I decided to make the move into venture capital by joining the VC arm of 360, China’s leading internet security provider.

That was where I got my first taste for entrepreneurship. In my 3.5 years at 360, I handled fintech investments globally and got the chance to meet with startups in AI, insuretech, and robotics across China and Southeast Asia. At the same time, I helped 360 launch its own financial services business and bring the company to a Nasdaq listing. That was a pretty pivotal moment for my career.

In late 2017, I went on to build my first startup - MEETUR Finance. The platform was designed as a marketplace for fintech companies to drive customer acquisition in the Philippines, Vietnam, and Indonesia. The company was then sold to 360 DigiTech, the digital consumer finance arm of 360 Group, in early 2019. At that point, I returned to 360 as the overseas CEO for 360 DigiTech, where I was based in Indonesia.

Q. What was the idea that spurred you into founding Yup?

Donny: In 2015, Southeast Asia’s fintech market was still very nascent. Fast forward three years and the first batch of startups entered through the lending business. But it wasn’t a healthy or sustainable market - those startups were typically charging interest rates 10 times higher than banks. Borrowers also didn’t have to be transparent about why they needed the cash.

That’s why I started my first marketplace in 2017. Customers with borrowing needs should have the flexibility to obtain capital without needing to worry about high fees or rates.

Q. Tell us a bit more about Yup

Donny: Yup is a personal credit-based challenger bank. Founded in 2021, it operates an e-wallet app, a personal credit card, and provides a credit line to support its customers’ daily expenses. Yup works with banks from which it outsources credit card licenses and leverages credit capabilities. It also has its own lending and payments licenses in markets like Indonesia, where it currently has about 1.5 million customers. We’re targeting over 17 million users in Indonesia and over 150 million across Southeast Asia in the next four to five years.

Yup charges interest to customers using its buy-now, pay-later installment services through its credit card, though rates are in line with banks’. It also generates merchant income per cash card transactions, as well as commissions from its e-wallet and ecommerce services. 

Q. What do you have planned for Yup’s future business milestones?

Donny: We’ll start expanding the company in the Philippines and Vietnam next year and have already begun obtaining the relevant licenses. We also plan to issue a Visa card at the beginning of next year to support user payments globally. We’re currently building out a new feature for deposits, so that users can enjoy receiving daily interest (of about 4%-5% annually).

Q. That’s quite a lot in the pipeline! How would you describe your highlights so far?

Donny: I’m proud of having built Southeast Asia’s first tech company that can issue credit cards. Yup is still the largest business in Indonesia that manages personal credit and all related card features.

I’m also proud to say that Yup is a local Southeast Asian business. Of its 150 employees, over 100 are local Indonesians. I think it’s important to have a diverse team with multiple cultures if you want to build a global business.

Q. What have been the main obstacles?

Donny: When running a startup, you face challenges every day. But I’m also grateful for myself and my team, given our previous experience in running fintech businesses in Southeast Asia. We were well prepared from that regard when launching Yup.

Fundraising is always challenging but we’ve managed to succeed so far. We’ve done four rounds and raised USD 60m in total from investors in Hong Kong, Indonesia, Singapore, the US, and China. We have a runway of three years and plan to open a new round, our Series B, early next year.

Q. How do your investors engage with you?

Donny: We are very lucky to have our investors and their resources. BitRock Capital is highly experienced in the financial services sector, with banking veteran John Peng as their founding partner. We also have an Indonesian family investor which owns a banking business and can introduce us to their network. China-based XVC is another backer - they can help us build connections with international banks and potential investors in the US and Europe, thanks to their relations with US family offices and endowments. Hong Kong’s MindWorks Ventures has solid ties to the city’s banks and government, which also comes in handy for potential funding capital.