Chocolate Finance raises US$15 million; CEO says it may still offer instant withdrawals in future
Founder Walter de Oude says the company's asset levels have not fully recovered after a surge in withdrawals in March saw S$500 million pulled out by customers.
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SINGAPORE: Four months after suspending instant withdrawals due to surging demand, Chocolate Finance announced on Thursday (Jul 24) that it has secured US$15 million in fresh funding.
The funds were raised from Nikko Asset Management, returning investors Peak XV (previously known as Sequoia Capital India and Southeast Asia), Prosus, Saison Capital and Chocolate Finance’s founder Walter de Oude.
The fintech firm plans to use the capital to expand across the region, starting with Hong Kong, where it recently obtained regulatory approval to operate. It expects to launch there in the first quarter of 2026.
Expansion into Hong Kong is the “logical next step” given that the regulatory environment and technological infrastructure is similar to Singapore’s, Mr de Oude told CNA in an interview.
The company came under scrutiny in March when it halted instant withdrawals after receiving an “unusually high” volume of requests. Customers withdrew S$500 million (US$392 million) in about two weeks – wiping out around 40 per cent of its assets under management, which had hit S$1 billion the previous month.
Its assets under management have not fully recovered, but have hit nearly S$900 million, and profitability is "not too far off", he said.
Mr de Oude, who is the company’s CEO, said instant withdrawals are not currently “part of the recipe”, though it could be reintroduced in future.
“For the time being”, he said, withdrawals will follow a standard process of up to three days.
“We're continuing to look how we can innovate in that space as we roll out, but what we have found is that actually … up to three days for a withdrawal is good enough.”
"MORE SUSTAINABLE" APPROACH
The March episode came about after Chocolate Finance quietly suspended AXS payments on its debit card and customers accused the company of opaque communication.
At the time, the company was offering two miles per dollar on all spending – including education fees and AXS payments – categories where miles are typically excluded.
Customers were taking advantage of the scheme and it soon became “quite evident” that this was unsustainable, Mr de Oude said.
“We have pared that back a little bit to more of a sustainable mileage programme, which is continuing to deliver great miles,” he said. Customers can still earn up to two miles per dollar, but "without loopholes".
“We've had to tweak things a little bit, around our communications and the understanding of our products and services,” said Mr de Oude. “And potentially be ... more sustainable around the freebies and benefits we give in a launch.”
Chocolate Finance, which invests its customers’ money into fixed-income funds, has 100,000 users in Singapore.
The company previously raised US$19 million in 2022. Mr de Oude said the confidence shown by existing and new investors reflects the strength of its business.
He added that Chocolate Finance will take lessons from its Singapore experience to Hong Kong, with a "slightly less aggressive" approach to growth.
“When you run promotions, you can be very generous in your promotions and the more generous you are, the more traction you get. But do you need to have as much promotion when your product is good enough, in and of itself?”
Editor's note: An earlier version of this article stated that Chocolate Finance's assets under management had reached US$1 billion. The company has clarified that it should be S$1 billion instead.
