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- 🧸 How GoBear went from $97M to $0 in 9 months
🧸 How GoBear went from $97M to $0 in 9 months
Probably one of the largest fintech closures in Singapore
Admond Lee
April 21, 2024
Read Time: 6.5 minutes
Hey Founders,
Welcome to The Runway Ventures, a weekly newsletter where I deep dive into startup mistakes and lessons learned to help you become a better founder.
Let’s get to it! 🚀
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Today at a Glance:
☠️ 1 Failed Startup → GoBear
⚠️ 2 Mistakes → Lack of focus & pivoted too late
🧠 3 Lessons Learned → Stay lean & move fast
🔗 The Runway Insights → Why startups fail & what we can learn from It
🤝🏻 The Founders Corner → Promising space for startup ideas in the next 3-5 years
☠️ 1 Failed Startup: GoBear
🚀 The Rise of GoBear
GoBear, founded in 2014, was a comparison platform to help consumers choose the right financial products, including insurance, credit cards and loans.
It has raised a total funding of USD 97 million over 2 rounds from investors like Walvis Participaties and Aegon.
🤔 So what exactly was the problem that GoBear was solving?
The Problem — Consumers struggled to find the right financial products that catered to their needs, leading to poor financial decisions and health.
The Solution — GoBear provided consumers with the know-how, tools, and various financial products to help them compare and choose the right financial products without any bias.
By doing so, GoBear’s purpose was to improve the financial health of people across Asia.
💰 How did GoBear make money?
Like other comparison sites (MoneySmart, SingSaver, ValueChampion), they made money via an affiliate partnership model.
GoBear partnered with banks or financial institutions and helped them acquire customers.
In return, for every successful referral or sign-up, GoBear earned a fee.
For this model to work, GoBear needed huge traffic to its website and converted visitors into new sign-ups or customers.
🌍 At its peak, GoBear had 165 employees and was present in 7 Asian markets – Singapore, Hong Kong, Malaysia, the Philippines, Indonesia, Thailand, and Vietnam, serving over 55 million users since its launch in 2014.
In 2020, GoBear had also been recognised by LinkedIn as one of the top 10 startups in Singapore.
📉 The Fall of GoBear
It seemed that GoBear was rising fast with all the funding and media recognition, but was it?
🧸 In January 2021, suddenly GoBear announced they were shutting down. Everyone was shocked. Wasn’t GoBear growing fast and expanding its partnership? What happened?
“GoBear has made the difficult decision to close the business. Our purpose has been to improve the financial health of people across Asia, and I'm proud and grateful for the contributions that all our employees and partners have made towards that mission.”
🏳️ Here’s what happened to GoBear:
2014 — GoBear was founded.
May 2019 — Raised the 1st round (USD 80 million) from Walvis Participaties and Aegon.
November 2019 — CTO (Ivonne Bojoh) and Chief Commercial Officer (Marnix Zwart) left the company by mutual agreement.
May 2020 — Raised the 2nd round (USD 17 million) at the height of the COVID pandemic from the existing investors.
In the same month, GoBear also acquired AsiaKredit — a Singaporean digital lending firm.
September 2020 — GoBear retrenched 22 employees (11% of its global workforce).
January 2021 — All of a sudden, GoBear announced its closure.
The company said that it couldn’t raise funds to continue operations due to the prolonged period of weakened demand for some financial products and services (travel insurance in particular) and the challenging environment brought by COVID-19.
April 2021 — Finder, a fintech company based in Australia, acquired GoBear to accelerate its global expansion.
From May 2020 to January 2021, GoBear basically went from USD 97 million to zero within 9 months. Comparison websites are notoriously known to be a very competitive space, and GoBear was one of the casualties in this fight.
Despite the failure, there are many lessons learned from GoBear’s story for founders.
Want to learn more about GoBear’s downfall?
⚠️ 2 Mistakes
Mistake 1: Lack of focus
“I think they were trying to do too much”
This was actually shared by Vinod, the founder & CEO of MoneySmart, that GoBear was trying to do different things in 7 markets, yet they were not #1 or #2 in any of these markets, hence losing out to strong local competitors.
But why would the lack of focus kill the company? This was largely due to its business model. For GoBear to make money, it had to achieve 3 things:
High Traffic — Attract huge traffic of visitors to its comparison site to learn and choose financial products
High Conversion Rate — Convert those visitors to new sign-ups or customers for GoBear’s partners (banks or financial institutions)
Low Customer Acquisition Cost — Reduce the cost to acquire customers for GoBear
Because GoBear was trying to do many things, it didn’t invest enough in building the capabilities of drawing in organic traffic, fine-tuning SEO, building intelligent bidding systems to maximise margins and keeping acquisition costs low.
As a result, GoBear was outcompeted and couldn’t make it.
Mistake 2: Pivoted too late
During the pandemic, GoBear launched 2 white-label insurance products, including:
Go Travel — underwritten by Chubb
Travel Buddy — underwritten by Allianz
It was clear that the travel industry evaporated overnight. MoneySmart quickly pivoted and focused on other financial products like credit cards and loans as people were looking for the best deals and offers during the tough time.
However, GoBear pivoted too late as they already put too many resources into the travel insurance products, leaving insufficient resources and time to pivot to another direction.
🧠 3 Lessons Learned
Lesson 1: Focus on what customers want
One of the biggest traps after raising from investors is this:
You are under pressure to grow and expand aggressively
You need to answer to your investors
You lose focus on what your customers want
You sacrifice the long-term gain for the short-term growth
As a result, your lack of focus slowly becomes the silent killer of your company. Stay focused, my friend.
Lesson 2: Stay lean & move fast
Building a startup is like running different experiments to test your hypothesis on the market and see which hypothesis is correct, and then you double down on that.
Every bet is a chance to test your hypothesis for you to iterate and achieve product-market fit. However, GoBear probably made a huge bet on the travel insurance products during the pandemic, leaving them no room to pivot for another round of iteration, and they died because of the huge bet.
🧠 Moral of the story:
Try not to make a bet that would kill your company. You have limited chips in your hands, so use them wisely.
Lesson 3: Timing is important
If the pandemic never happened, GoBear’s bet on the travel insurance might have resulted in a huge win. However, many businesses died during the pandemic, and unfortunately, GoBear was one of the casualties.
🌊 Building a business at the right time could 10x your growth because of the wave. If you can ride the wave, you win. On the other hand, building a business at the wrong time could dampen your growth. If you’re not careful enough, your company might be drowned by the wave.
🏄♂️ You might not like it. But timing is important.
🔗 The Runway Insights
🤝🏻 The Founders Corner
This is the place where you can ask me any questions about building a startup. Every week, I’ll pick one question to answer.
Just reply to this email with your burning question. Let’s win together 🤝🏻
Founder’s Question:
Curious to know what’s your thought on the promising space to build a startup in the next 3-5 years. Thanks!
My Thought:
6 years ago, if you asked me the same question, I’d say data space was the next big thing, be it data science, data engineering, data warehousing, data integration, or databases.
Today, given the same questions, I’d say Generative AI will be the next big thing to transform people’s lives. I’m excited because of the possibilities with the use of GenAI in our day-to-day life.
Of course, you might be thinking that the current market is saturated with many GenAI startups (mostly above an API wrapper), are there still opportunities?
Just take a look at the latest YC winter batch and you’ll see most of the startups are in the GenAI space. YC invests in brilliant founders who want to build great things. And many founders want to build something in the GenAI space now. Maybe there’s something in that space — I’m not sure.
But one thing I’m pretty sure is this → We’re at the inflection point where GenAI is going to change our life in the next 3-5 years.
🤝🏻 Join our founders community on Discord:
Building a startup is one of the toughest things you can do. Why struggle alone when you have our community to help and support you.
This is the founders community I wished I had when I first started.
That's all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope it has helped you in some ways and brought you some peace of mind.
You can always write to me by simply replying to this newsletter and we can chat.
See you again next week.
- Admond
Disclaimer: The Runway Ventures content is for informational purposes only. Unless otherwise stated, any opinions expressed above belong solely to the author.
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