Ameer Jumabhoy: Revolutionizing Tourist Value-Added Tax Refund Industry, Pandemic Hard Choices & Personal Resilience with Family - E390

· Singapore,Southeast Asia,Podcast Episodes English

 “We're at the beginning of the AI movement, but we are looking at that quite seriously. At the end of the day, travel for me is still a very in-person experience that delights. It's about getting a bum in a seat, traveling to a country, or standing in front of an amazing monument. Nothing can take away that no matter what kind of technology you implement. Nothing can take away from that wonder and excitement. In our space, it's really about saying these tools exist, but how can we use them in a responsible way without taking away that concept of delight and wonder?” - Ameer Jumabhoy

“Today, if you look at tourism trends, they've changed tremendously since the pandemic. You don’t necessarily have to go to Europe to shop for luxury brands. Instead, we'll bring the brands to you. The nature of tourism, of retail is consistently changing and the sands are moving really fast. And I think it's just a question of being able to scale in a way that you can take advantage of different levels of reopening and comebacks. It was definitely not easy, but we spent the time thinking a lot about innovation. That's where we came up with the idea of the miles upsize as an example.” - Ameer Jumabhoy

“When you think about tax-free shopping, people only think about the refund operators. The message for us is we are not a refund operator. We are sitting over and above the refund infrastructure. So, let them do what they do. We do what we do, which is to give back more and drive those extra sales and benefits for the ecosystem. And I guess it's been a hard message to get across because there's been little innovation in this industry. So whenever I can, I'm always banging that drum to say no, we're not the refund operator. I'm in a totally different business model to them.” - Ameer Jumabhoy

Ameer Jumabhoy, Cofounder of Utu, and Jeremy Au talked about three main themes:

1. Revolutionizing Tourist Value-Added Tax Refund Industry: Ameer delved into the complexities of the VAT refund process, highlighting that tourists typically reclaim only a portion (i.e., getting only $65 from a $100 tax refund on a $500 purchase) due to high processing fees from numerous entities involved in the refund process. He shared Utu's $33M Series B fundraise and mission to enhance the tax-free shopping experience by maximizing the refund value for tourists through partnerships that benefit all stakeholders involved, including tourists, retailers, and the government.

2. Pandemic Hard Choices: Despite the severe impact on the travel and retail sectors, Utu made the humanitarian decision not to lay off any staff despite the significant financial and operational cost. He underscored the leadership's commitment to their team and the long-term vision without compromising on their values. Utu had to strategically follow the reopening of global tourism city by city and travel corridor by corridor, e.g. the UAE deciding to launch the World Expo in 2021. He also talked about their acquisition of CardsPal and the launch of new services aimed at providing greater rewards for travelers with their evolving post-pandemic consumer behavior.

3. Personal Resilience With Family: Ameer recounted his experiences navigating professional responsibilities alongside personal challenges during the pandemic. He detailed the decisions to move across countries for family and work, emphasizing the importance of support systems. He shared his thoughts on how parenthood had shaped his perspectives on leadership and entrepreneurship.

Jeremy and Ameer also talked about the rationale behind the current VAT refund system's inefficiencies, Utu’s future product roadmap, and the significance of cross-border shopping trends.

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(01:32) Jeremy Au:

Hey, Ameer. Really excited to have you on the show. You are shining the light on something that I still don't understand, really. So, can't wait for you to explain to me what's going on here.

(01:41) Ameer Jumabhoy:

No, looking forward to doing That.

(01:43) Jeremy Au:

On that note, please introduce yourself.

(01:45) Ameer Jumabhoy:

Hi, everybody. My name is Ameer. I'm a Singaporean cofounder and I'm, cofounder of a company called Utu. So that's U-T-U. Have a nice day, Utu. And what we're really about is adding value to the tax-free shopping experience, giving tourists more of their refund value back in a way that works for them, in summary. That's the 30-second pitch.

(02:02) Jeremy Au:

So, before we start about that, like, why and how was your early career like?

(02:07) Ameer Jumabhoy:

So, I, I studied in Singapore, was born in Singapore, did my NS. Right after NS, I went to the US for undergrad. And towards the end of my undergrad, I was given two job opportunities, one was at Google and one was at Morgan Stanley. I turned both down because my dad was pretty unwell at the time. So I wanted to come back home. But my dad's also a workaholic. So even though he was unwell he ended up doing a deal in the tax-free shopping space. Actually, my first role was working with him in the tax-free shopping space as a salesman. So I used to go to Little India and actually help merchants, the textile merchants to set up tax-free shopping services in their stores.

And I think that's really like where you get the guts of entrepreneurship is through that, that, you know, experience on the streets. And that still holds really true to me today. Thereafter, I went back to the U S for my master's. And towards the end of my master's, I was kind of thinking, okay, what do I want to do now? And my dad and I was you know, pow wowing ideas across the table. And we said, you know, why don't we start a company together looking at the cross-border rewards and loyalty space. So we didn't actually start looking in the tax-free space. We were looking at how do you take a point that you've earned in Singapore, a loyalty point you've earned in Singapore, and use it, say, in Thailand. Because for example, your Starbucks star, you own in Singapore, can't be used anywhere else. So we were trying to solve for that problem, which we managed to do so.

(03:15) Ameer Jumabhoy:

And that led us to this insight that there's actually three types of rewards. There's a payment rewards, which is, you know, shop with your DBS card, you get DBS points. There's merchant rewards, which is, come to Starbucks, I give you a Starbucks star. But there's also a third kind of reward, which governments are saying, come and shop in my country, and I'll give you a reward back by way of a VAT refund. In Singapore, we call it GST. So if I say VAT, I generally mean both VAT and GST. So come and shop in our country and we'll give you a reward by way of a VAT refund. So what we did was we took this idea of the traditional tax-free business model, essentially reversed it into a rewards methodology, and that's sort of what we do today.

(03:51) Jeremy Au: So, let's get into that, right? So, I am a person and I'm traveling to the UK, right? And I'm visiting my sister for a month, just in university. And then I hang out there for one month and then I come back. So how, what am I missing here? What am I supposed to be doing during this time?

(04:06) Ameer Jumabhoy:

Okay, so,

(04:08) Jeremy Au:

How does the VAT or, you know, the value added tax or the GST apply to my life?

(04:11) Ameer Jumabhoy:

Okay, sure. So let's maybe switch it to Paris. You're taking the Eurostar because right now the UK, they're deliberating bringing it back. They actually took it out during COVID, the VAT refund scheme. So let's say you're in Paris, you're buying a backpack, right? And I'm just gonna use easy numbers for the audience. So backpack is 500 Euros. VAT rate is about 20%. So the government is saying, Jeremy, you can get back a hundred Euros, but you have to go through the VAT refund process with the private operators that the store appoints. Okay, so out of that 100 Euros of VAT paid, you can probably expect to reasonably get back about 65 Euros. Okay. So,

(04:42) Jeremy Au:

Whoa, hold up. I lost you there. So I understand the part about buying an expensive backpack in Paris. That one I get. So, and I get the fact that the government taxed me 100, I see that at the receipt at the time. And then, I'm supposed to, well, I've never done this before. So I guess I'm just a sucker. Again, I don't buy that much stuff. But so, and then what we're saying is that I have to go to somebody that they appoint. What does it mean to go to somebody appoint? It's like a portal or?

(05:05) Ameer Jumabhoy:

So, no, so the brand, let's say you're shopping at brand X would contract with a VAT refund operator, which is another private company that handles the administration of the VAT refund between the shop and the government. Okay. So that tends to be two main companies in this space. Both of which my dad actually had involvements in. So we know the space really well. So these refund companies are the ones that will help you to process your refund at the airport.

(05:26) Jeremy Au:

Ah, but why do I only get 65 bucks instead of a hundred bucks? I thought I paid a hundred bucks?

(05:31) Ameer Jumabhoy:

So the government is saying, Jeremy, you can get back a hundred euros, but the processing fees in this industry can be quite high. As you can imagine, there's a lot of coordination between the refund operator and their various constituents. So the processing fees can be quite high, and generally what we're finding is tourists are getting about 65 euros back as a refund. And that's okay because--

(05:48) Jeremy Au:

What? I deserve all a hundred dollars back. This whole point refund. I don't know, have you, I mean, wire transfers is like, you know, a dollar, right? So, wait, how does this work? Explain how does it get from, you know, I don't know, online digital, seamless refunds to a $35 haircut.

(06:05) Ameer Jumabhoy:

So we're talking about really in-person experiences, right? So you've got to get yourself to Paris. You've got to be buying that bag, but essentially there's a, there's about 15 different friction elements in that transaction that the refund operators have to navigate. So, what's ended up happening is because of the scale of the business, because of the number of people that they have to work with, because of the intensity, it's a very paper-based process. So because of the intensity of the paper-based process that they have, the transaction fees have gone sort of the other way, which is to go higher rather than go lower. And I understand the stones under the VAT refund operators' uh, feet, because you know, there is customs to deal with. There's government and Ministry of Finance to deal with. There's retailers to deal with. Then there's putting back that money onto tourist payment cards. So, as a result, you end up with this pretty high transaction fee.

And what we said to ourselves is that, okay, that's 35 euros of deadweight loss, essentially. And that 65 euros is money that is leaving the shop where you bought your bag, and it's leaving the country. It's being taken back home to Singapore by you.

So what we said is, all right, if these guys do what they do, which is to refund VAT, can we figure out a way to build products on top of that infrastructure? That do a few things, give more back to the tourist and incentivize them to shop more, which is what governments want you to do. Can I help retailers to sell more? Can I help money that was leaving the country to be recycled within? And can I even help the VAT refund operator guys to say, look, rather than just managing the transaction on the bag, maybe I can give Jeremy an incentive to upsize the refund that he was getting in cash into value, which he can use again to shop on a accompanying wallet that matches the bag. So can I increase the tourist basket size?

So my story is not a disruption story. Typically, you know, if you think about disruption, you're always taking somebody else's lunch at some point. My story is really to say I've got a pie and the pie is about this big. Can I take this big pie and increase it for everybody?

(07:51) Jeremy Au:

Great. So if I get a hundred dollars, I'm supposed to design. So if I get, if I'm entitled to a hundred dollars and 35 is going to processing, so are you saying that the 35 shrinks as a result of this deadlift weight loss because of Utu or does that mean that the 65 becomes more?

(08:07) Ameer Jumabhoy:

The 65 euros becomes more valuable and it can become more valuable in a few ways: one, I can say Jeremy, look, instead of getting 65 euros cash, I'll give you 90 euros worth of airline miles in any one of the 12 airlines that we work with. Or I can say to you Jeremy, hey, you're in the store right now, right? Rather than 65 cash refund, I'm going to give you 120 euros of value if you buy the wallet that goes with the bag, so it's really about remember taking that rewards concept and the concept of giving more back to the traveler to incentivize them to shop more and make them feel like they're not suffering that burden of the 35 euros that gets taken in the processing fees.

And what we do is we are not getting involved in the VAT refund process. We're really building products on top of that infrastructure. So we see, for example, VAT refund operators, and we understand the owner's process they have to go through. We even see them as our partners. So as I said, we're not looking to take anybody else's lunch. We're just simply looking to add value to all stakeholders in the tax free shopping journey.

(09:02) Jeremy Au:

Yeah. I guess what we're saying here is, the government's intention inadvertently is not intending to refund you a hundred dollars, net refund is 65 euros.

(09:13) Ameer Jumabhoy:

I would tweak that a little bit. The government's intention is to refund the hundred euros, but because of the process in place today, the tourist ends up getting less because there's a lot of different stakeholders involved in processing that single transaction.

(09:26) Jeremy Au:

Okay, so I get it. So, you know, what we're kind of saying here is we can't really change what's happening to the 35 because the current systems in play, the players are there, they're comfortable taking their processing costs and so forth. It's let's figure out how to rebundle the 65 back into at least a hundred dollars worth of value from the consumer's perspective, getting more value for a dollar. Interesting. So, how does somebody, you know, like I said, traditional process is, and I've seen those VAT counters, right? It's like, you go to your shopping, you have your bags, you go to the VAT counter at an airline, at least at an airport.

(09:55) Jeremy Au:

What is that process like for those who haven't done it yet?

(09:57) Ameer Jumabhoy:

So, for example, let's say that you're shopping in Greece as an example, right? You're buying something from a store. The store will issue you a VAT refund form from their preferred VAT refund operator. You take that form to the airport whenever you depart. Okay, you go to Customs and Customs will inspect the goods that you're essentially taking out of the country. So the concept around VAT refunding is you're essentially turning the individual tourist into an individual exporter. So customs will assess the goods, make sure that it's in your bag and it's going to be checked in. They'll stamp your form. Okay, then what you're going to do is you're going to go to the relevant VAT refund counter of each of the operators. So let's say, there's two operators, for example, and you've got one form from each. You'd first line up at operator A, process your refund. Then you'd go to operator B, process your refund. Then finally you'd check in your bag. And you'd be done with the process as, you know, right after that. So it is in a little bit of a way manual. And there's a few reasons for that again. Sorry, this has gone into a very technical podcast.

(10:53) Jeremy Au:

Oh, I want to hear all the reasons, because that sounds like a total pain in the rear, and it also reminds me why I've actually honestly never done it in my life, because I'm just like, you know, I mean, I see everybody filling forms. I'm just like, you know what, I got to get to my airline. So what's so why is it taking so long? Why does it take so many forms?

(11:10) Ameer Jumabhoy:

Well, what's complicated here is you see on a typical Europe trip, let's say, you know, you're a Singaporean traveler traveling to Europe. You're not just perhaps visiting Milan. You might also be going to Paris. You might also be going to Vienna, right? So people tend to make a trip and go to, say, one, two, three different countries on this big European trip. It's expensive to go on these kinds of holidays, people want to make the most out of it. Now, the VAT refund system in each country differs greatly. Some systems are more digital, some are government tendered, some are single operator, VAT rates differ, the structure of the processing fees differ by country as well. So, for example, in the UAE tourists by law are getting 87% of the refund back. In Europe, it's a free market, right? In Singapore, the government has also mandated a minimum GST refund that goes to tourists. So, to navigate cross border becomes very difficult, and that's why you have those paper forms. If you're buying something in Greece, as we were saying, and then you're visiting Milan and you're going back from Milan to Singapore, there needs to be some way for the Milanese customs, because you're leaving the EU via Milan. They need to be able to verify that form has come from another EU member nation. So it can get very technical from that perspective. And that's why innovation is also a little tough in this industry.

(12:17) Jeremy Au:

So how does Utu change this process? Does it make it easier? Because it feels like a Google form, you know, or air table form, you know, feels like at least I could, you know, like if I'm thinking, you know, you know, because I don't want to be filling out that form right at the airport. I want to be like, I don't know, the night before or whatever, the week before I can start filling it out. How a Utu help this process?

(12:38) Ameer Jumabhoy:

Okay. So I wouldn't say we make it drastically easier, but what our thesis is there's two general complaints in the tax refund world. One is the lines of the airport are really long, which I believe that the existing incumbents who are in the space, I think they'll sort that out through digitization at some point. So let's park that to one side. But the second complaint I get is that, oh, why am I getting only a percentage of the VAT paid as a refund? And that's really what we're trying to solve. So we are not looking to disrupt the operation of the VAT refund operator. They've had preexisting relationships with their retailers for years and we don't want to touch that, right? We want to be respectful of that. But what we're saying is, can we work with the same retailer who is still issuing the VAT refund form from their preferred operator? Can we work with that same retailer to introduce products in the store that add more value to the user?

So for example, Utu privileges, if you go back to that example, I was saying where you're getting 65 euros back as a refund, I'm going to give you 120 to keep shopping again in the store. That's a very merchant driven product in store that harnesses the value of the VAT refund you would have otherwise received at the airport to drive an additional sale in the store. So it's very much in store experience. You still have to go through the regular VAT refund system with the incumbents at the airport, but our thesis is that if we can drive that value, and it's not a small amount of value, it's almost double the amount that you would otherwise get in cash, right?

(13:53) Jeremy Au:


(13:54) Ameer Jumabhoy:

We think that people are okay going through this extra step of using Utu services because of the quantum of that value.

(14:00) Jeremy Au:

Well, that's interesting because, you know, why aren't you solving both of those problems, right? Because, it feels like, for me, for example, as I look at the line, I'm just like, you know, and I'm off, right? And firstly, to some extent, maybe that's a feature, not a bug, because I guess effectively I subsidized the local government with, the tax. So there's a nice headline message of a refund, but you know, the net tax rate is higher because I'm not actually submitting the refund forms. So I'm just kind of curious what your thinking is about why not tackle both problems.

(14:30) Ameer Jumabhoy:

So the way I look at the tax refund process today, it's a very administrative system similar to money changing, right? It's a very methodical. It's been in place for ages. And there are startups that were looking to disrupt that space. And indeed, we were looking at doing that as well. It wasn't that we weren't looking at doing that but the realization for us came that there's so much value that is leaving countries by way of VAT refunds being brought back home. And then we understood one more thing in that the tax free guys and the retail guys don't fully understand the stone under each person's foot. And as a company with Utu, my, as my dad's, my co-founder, as I mentioned earlier, he actually came from a retail background. So his first professional job on his own, when he was an entrepreneur, I was actually running the perfumes concession at Changi airport. And this was many years ago. This was like in the nineties when I was a young boy.

And so he understood the famous P's of promotion, price placement, the stuff that you learned in business school. So he really understood what retail meant and he saw this ability to link retail with tax-free, which has not been really seen before.

(15:31) Ameer Jumabhoy:

So what we decided to do was not go by the way of revolution of the industry. We decided to go by way of evolution to say that, look, the VAT refund guys do what they do, which is process tax refunds, and they do it to the best of their ability. We do what we do, which is to give back as much more as possible to the customer to help drive or help give more back value to the customer to help drive incremental value for all stakeholders involved. So as I said, help shops to sell more refund operators to process more, keep money that was leaving the country to be recycled within.

(16:01) Jeremy Au:

Right. And so, you know, walk me through that process. So, for example, I walk into a retailer that now works with Utu. I see, you know, the Utu app. I can download it. I can sign up for, I guess, a Utu account. So how, then how does that work flow, and then eventually I go back to the airport to do my VAT tax refund, but how does it go back into Utu and how do I get it out?

(16:23) Ameer Jumabhoy:

Yeah. Yeah, sure. So, so take one of our brands, La Martina in Milan. Right. So you'd walk in, let's just go back to that 500 euro bag that we were talking about earlier. So what's going to happen is the sales staff is going to say, Oh, you, do you know, Mr. Jeremy you know, you're a tourist here. You've been a very good tourist really happy you bought this bag. But do you know, on this bag, you're getting a 65 euro refund. We're going to give you 120 euros of value. There's a really lovely wallet that goes with this bag, and you're going to say, how much is the wallet? And they're going to say, Oh, it's 200 euros. You just have to top up another 80.

(16:52) Ameer Jumabhoy:

And you're gonna say, how do I do that? And so they're gonna say, look, we have this product called Utu privileges, right? You just have to to receive this Utu privilege in the Utu app and what we ask you to do as a tourist is we ask you to pay the 65 euro refund that you are going to receive at the airport for that value of 120 euros. And that 65 euros is what you're gonna claim back from the airport with the existing VAT refund operator.

So the workflow flows really walk into a store. There's this sales ceremony, right? The store that works with us sees value in increasing the basket size, selling more to the tourist. The tourist makes a decision to recycle the VAT VAT refund they were otherwise gonna receive at the airport into the tourist privilege. Then they give you the VAT refund form as per normal. You go to the airport, you process the refund as per normal, and then you depart back to Singapore. So again, we're not, I do recognize that this isn't making things easier in the sense that there is that added step. But my thesis is that the value that we're giving you is much higher.

(17:49) Jeremy Au:

Right. So how much more value are we getting out of the system as a result?

(17:52) Ameer Jumabhoy:

Again, so this is very much dependent on the country. So in Italy, for example, average refund is 65 approximately, right? And we're giving you 120 of value to continue shopping

(18:02) Jeremy Au:


(18:02) Ameer Jumabhoy:

In the UAE by law, you're getting 87% of a refund. We're giving you 110% to continue shopping. So 87 dirhams goes to 110. Singapore is about the same as the UAE. So again, it differs. But what I think the main thing is we've been able to get over and above, 100 percent of the VAT paid, we're able to offer you more than that. And I think that is, is tremendously more valuable for the tourist shopper who isn't that mood of shopping and spending and wants to get value from their purchases overseas.

So, again this is really where knowledge of the local industry and the mechanics of each refund system comes in very handy. And that's really the retail side. But say you don't want to shop more in the store, you can always upsize your refund that you are getting in the form of airline miles. And as mentioned earlier, we work with 12 airline partners and one hotel partner.

(18:48) Jeremy Au:

Right. Are there specific corridors or types of, you know, people or routes that really people are like, wow, this makes total sense for me. I don't know in my head, is it like. The Dubai, Italy, Cardo, for example, like what kind of Cardo really makes sense.

(19:01) Ameer Jumabhoy:

Oh, it's a, this is a very interesting question because it changes so often based on, you know, how currencies are doing, et cetera. Like, you know, for example, in December, this past December, I've seen so many of my friends from Singapore travel to Japan for holiday. Why? Because you know, the yen is competitive for Singaporeans today. So it's changing constantly, but I think we do have some fixtures. So for example, Paris, Milan, Rome. So Italy and France are the two biggest tax free shopping countries worldwide. And they've historically been that way. Why? Because that's where the home of fashion is. That's what the brands all are.

And also the VAT rates are higher, right? So you're looking at 21, 22 percent VAT rates in that European region followed by Spain and Germany. The UAE, I think, has had taken a very proactive view on tourism, has really built a very strong retail infrastructure. You know, I'm sure that many of the listeners who either live in the UAE or have visited, have definitely visited, say, the Galleria Mall in Abu Dhabi, which is actually our launch partner when we just started operations in the UAE this past week. Or Dubai Mall, et cetera.

So, the UAE is starting to become a very strong hotbed for shopping. Singapore has always, of course, been there. I think, you know, we've all been down Orchard Road. We've seen the great infrastructure over here. So you do have your staples and then you have sort of, you know, every couple of years, new countries that come up and are able to showcase what they can do in terms of the tax free system as well. But I would say our staples are that corridor. So we do want to enter France eventually, but Italy is really like where we have a team I'm heading there tomorrow, actually, UAE Singapore, and Thailand.

(20:25) Jeremy Au:

Yeah. What's interesting, of course, is that, how does somebody realize that this is an option? Is it primarily discovery at a retailer?

(20:32) Ameer Jumabhoy:

Yeah, there's two ways. So one is our airline partners have been incredibly helpful. You know, I was very pleased that some of my colleagues from one of my alumni groups that I'm a part of showed me, you know, one of them was like, Hey, you know, I can see your collaboration with Singapore Airlines on the SQ website. And that was really heartening to see. So our airline partners really do help a lot in terms of getting the message out. And but I do think at the end of the day, what's interesting about our industry is every day is a new tourist, you know, it's not like ride hailing or food delivery where you're ordering from the same apps every day.

You're maybe using our app once, twice, three times tops per year because people, that's how much. People generally travel, right? So every day for us is a new tourist. So the challenge that we have as a company is how do we realize that Monday's tourist is very different from Tuesday's tourists. So we actually really rely on our retail partners to push that in store experience because it's in their benefit as a brand for sure, to increase the sales and make that additional sale that we're not making before. But also it's a great education point. That, of course, always presents challenges because brands have curated their retail experience. If you look at some of the bigger groups, they invested millions of dollars, euros into curating what happens when you walk into one of their maisons or their houses, right? So it is always a challenge to discuss with the brands as to how we integrate, but many of them do see the value in terms of what the technology can bring.

(21:47) Jeremy Au:

Because it's free money in that sense that they're giving back to the consumer. It's a nice way to basically

(21:53) Ameer Jumabhoy:

Recapture that for an extra sale.

(21:54) Jeremy Au:

Yeah, exactly. Exactly. Lower price point is one crass way of saying it but the other way of saying is like, yeah, I can drive the seal as well. I guess the question then gets straight to it is like, what are some myths or misconceptions about this whole process? The value added tax refund process and processes. Any myths or misconceptions about this industry?

(22:11) Ameer Jumabhoy:

Yeah. I think a lot of people complain about the fee structure, but it is extremely technical. And I can totally understand that the difficulties that the VAT refund operators are facing in terms of increasing fees. So, so that's one thing. They have a lot of constituents to deal with. On the Utu side, I think the message that I had always wanted to give out and what we're going to start to put out in our press releases and, the interviews that we're going to be giving and stuff is to really say that, look, when you think about tax free shopping, people only think about the refund operators, right? And I think the message for us is we are not a refund operator. We are really sitting over and above the refund infrastructure. So let them do what they do. We do what we do, which is to give back more and drive those extra sales and benefits for the ecosystem. And I guess it's been a hard message to get across because there's been little innovation in this industry. So whenever I can, I'm always banging that drum to say no, no, we're not the refund operator. Don't ask me about that because I'm in a totally different business model to them.

(23:03) Jeremy Au:

Yeah. When we think about this, obviously, you recently raised a 33 million series B. What does the future hold in terms of like your product roadmap and what you want to build?

(23:12) Ameer Jumabhoy:

So I think we've been really lucky as part of that raise to acquire a company called CardsPal which is quite a well loved app in Singapore and what it does is it kind of gives a comparison of different cards and how you should use those payment cards to maximize your rewards. So there was definitely this synergy.

So going forward, there's going to be two strategies. One is where relaunching CardsPal within the coming weeks with a brand new identity, a brand new product offering for domestic rewards, and we're going to start this in Thailand. So we're really excited about that. And we see Utu as sort of being that cross border You know, travel app in the tax free space that gives you incrementally more rewarding experience and value for your tax free shopping purchases So we have a domestic strategy and we have a cross border strategy we are looking at things like artificial intelligence. I think almost every company is and should be looking at it. However, we're very clear that we are not an AI company. I think that's really important because I think too many people, or what I can see is that there is a little bit of creep into our entrepreneurship ecosystem where too many people are like, you know, throwing the baby out of the bathwater and being like, Hey, you know, like guys know now we're an AI company.

And I think that could be dangerous for the long run. But I think it's a question of saying, how do we use tools like AI in a responsible manner, right? To infuse within our products to make those drop off points or the customer journey a little bit more frictionless which is something you've alluded to earlier in our discussion. So we are gonna be releasing tools that are AI related, not generative AI, but looking more at things like OCR, enhanced OCR capabilities. And then I think finally you know, Jeremy it's really about saying that, where I think AI is going is eventually your Google Gemini or your ChatGPT are going to be personal to you, right?

A bit like Jarvis in Iron Man, right? I think that's where we're headed to eventually. I think you know, the leaders in the AI space have alluded to this. So we're saying on our side, how can we use this in a responsible way to serve up the type of value or rewards that work for you? You know, if I know you're flying Singapore Airlines a lot or Emirates or Etihad, can I serve you up the right sort of rewards that cater to that lifestyle? Or perhaps your partner might be a shopaholic and love shopping and likes to buy a certain category of items. Can I start to understand those buying patterns and when they're in Milan or whether they're in you know, Thailand, give them options for rewards through Utu privileges that work for them. So, one is the enhanced OCR, which is going to come out in April with a really exciting merchant.

(25:28) Ameer Jumabhoy:

And the second one is driving personal experiences. It's going to take time and we're sort of at the beginning of those of this AI movement. But we are looking at that quite seriously. At the end of the day, travel for me is still a very in person experience that delights, right? It's about getting a bum in a seat, traveling to a country, standing in front of an amazing monument. You know, like the Eiffel Tower or the Colosseum, nothing can take away that no matter what kind of technology you implement, nothing can take away from that wonder and excitement. So in our space, it's really about saying these tools exist, but how can we use them in a responsible way without taking away that concept of delight and wonder.

(26:01) Jeremy Au:

Could you share about a time that you personally have been brave?

(26:05) Ameer Jumabhoy:

Yeah it I think this was a very personal one over the pandemic. I mean, we had started actually, we launched our first product in the tax free space in November 2019. It's like super good timing. But obviously, like, nobody could see what was around the corner and we did some incredible revenue in like the six weeks that we were alive and then the world just shut down.

I think, you know, and I haven't spoken about this publicly, but something that we did was we actually had raised a little bit of money just before COVID to get the business off the ground and, you know, you know, get awareness, et cetera. And what we did over COVID was we decided not to let go of any of our staff in any of our offices worldwide. Some staff took a slight pay cut for a few months but just for a few months, but for three years when planes were not flying, when, you know, countries were still conservative, we essentially used all the money we had raised pre COVID to keep our staff employed, which caused immense difficulty in raising money after, right?

Because people are like, Oh, what do you do with this money? Why don't you have any revenues? I'm like, well, planes aren't flying. They're like, we need revenue to invest in you guys. And, but I think the humanitarian thing was to make sure that our staff in India could have a job the next day. Our staff in Singapore, we're not going to be able to get jobs in the middle of the pandemic. It wasn't so easy to just pivot out of travel into something else. So I think it was brave to make that decision, it did hurt us tremendously financially. It did hurt us tremendously when we were going to market to try and fundraise again, but I would do it again because I'm still fully convinced it was the right thing to do from a human perspective.

(27:29) Jeremy Au:

How did you decide on that course of action?

(27:31) Ameer Jumabhoy:

I think it, it really took my dad and I sitting in the same office behind me. I mean, you know, we were alone when the government had, you know, allowed you know, pairs to be together, right? Whatever the government regulations was, we were sitting here and we were saying, how do we take this thing forward?

Because we could cut all the stuff, keep the money and rehire after, but we really felt that our IP was in our people.

(27:52) Jeremy Au:


(27:52) Ameer Jumabhoy:

And our people drive our products and I could see the difficulties that many of our staff members were facing at home, both from an emotional perspective you know, some of their partners had lost their jobs. So they were, you know, single income households at that time. So it wasn't, it didn't take long for us to deliberate this out. It was literally like an hours long discussion. We took that course of action. We knew it was going to hurt us at some point, but we thought it was the right thing to do. And I still stand by that.

(28:17) Jeremy Au:

Did you know how long the pandemic was going to take? Because I think a lot of folks were making that same decision, right? So for some people cut immediately, some people took longer, some people kept. But I think a big part of it was just like the expectation of how long the pandemic would have and more importantly, you know, the, whether travel, for example, entertainment, hospitality, whatever will be shut for that period of time.

So how did you navigate that, you know, estimation?

(28:40) Ameer Jumabhoy:

So the estimation was something I think very few people could predict truly. And also I think cultures and different types of governance played a part, right? So for example, I spent much of the pandemic in the UAE because I was, you know, I was. In a very difficult place as a founder, I, and I needed to be in a place that was open and willing to say like, look, you know, tourism is a big driver for us.

We're going to vaccinate and we're opening our doors to the world because of the Expo. And I'll always be thankful to the UAE, for example, for being that shining light in a very dark time. And the Expo was a life changing experience for me because I saw the world come back. Right. Other countries perhaps took a much more conservative approach. Like, you know, a lot of our customers from China couldn't travel for many years. Right. But there was no way to sort of, of guess how long their government was deciding to keep borders shut. We were also a little bit more conservative in Singapore. America has pretty much been open through the pandemic.

(29:29) Ameer Jumabhoy:

So it was really difficult to estimate and also look in cross border. A lot of our customers tend to be Asian shoppers. A lot of them are traveling to Europe. And as long as that corridor remains shut, it was very challenging. And even today, if you look at tourism trends, they've changed tremendously since the pandemic. You know, luxury brands, for example, are not saying anymore, come necessarily to Europe to shop. Instead, we'll bring the brands to you. I think Hainan Island saw record sales over the Lunar New Year period. So the nature of tourism, the nature of retail is consistently changing and the sands are moving really fast. And I think it's just a question of being able to scale in a way that you can take advantage of. Different levels of reopening and comebacks. So it was definitely not easy, but we spent the time thinking a lot about innovation. That's where we came up with the idea of the miles upsize as an example.

So your 65 euros, you know, becomes, you know, 90 euros in miles. So we spent a lot of time ideating those. I don't think we wasted the time, but it was a very tough period for us. And we had to be very prudent, very brave a little bit foolhardy, but you know, we came out of it. We're alive.

I think that's the main thing is that we came out of it alive. Many companies in our space had to shut.

(30:34) Jeremy Au:

Yeah. How did you personally deal with this?

(30:37) Ameer Jumabhoy:

Was extremely difficult. I was going through some personal difficulties at home with family members who were really not well but who are based overseas. So, you know, it came to a point where the illnesses were pretty critical. My wife and I, and my son who was only a few months all the time had to travel because it was a necessity.

We had to go through SHN. Then of course the emotional hit of running a startup with, you know, So many people that depend on you, but in the middle of a pandemic when nothing was moving, I made that decision then to move to the UAE for six months, which I'm very thankful for those six months. So it was very difficult. I mean, there were pressures on the personal side. And there were pressures on the work side. And I think what I was very blessed to have is a very strong support structure. So my dad is my co founder was like, look, if you think the right thing is to go to the UAE, If that's going to give you the belief and the determination to continue this journey we're on, go and see what you can do over there.

And it was through that journey that got us to the point where we're now working with a Mubadala backed retail asset called the Galleria Mall. It helped to open the door to the relationship we have with the Middle Eastern Airlines. It's been great to socialize with the VC community in the UAE, so I always have friends from industry.

I can, you know, I, and I travel to Dubai a lot now and I can meet them. I can meet people who are moving and changing the face of tourism. So, I'm very blessed, but it was incredibly taxing on a lot of different fronts.

(31:56) Jeremy Au:

Yeah. And you became a dad during the pandemic, right? Which I did as well. So I'm just kind of curious what that experience was like since you had a few month old baby, for example, during this travel.

(32:05) Ameer Jumabhoy:

Wow. Yeah, it was very tough. I mean, if I look at the year 2021, my son was born September, 2020 and 2021 because of, you know, some of these family health issues, for example we had to make a a move to Pakistan to visit some of these family members. Then I had to go to the UAE for work, but borders were shut.

So I was actually like my wife and I were shut between different borders for a good, like three months. Until we all finally made it to the UAE. And that was really tough because I missed those two, three months of my son's growing up. And as you know, like when, you know, the kids are a few months old, that's where you sort of see those, you know, huge jumps in incremental jumps in their development. And just the emotional side, being away from my wife and stuff like that was a really tough thing to do. We spent 2021 between Singapore, Pakistan, Ireland, the US, and finally settled in the UAE for the rest of the year. We lived like nomads. I mean, I'll never forget like we had an apartment in Dubai that we furnished with $1,000 of IKEA furniture for like six months because we didn't know when we were coming back to Singapore when borders were going to open. I mean, it was exciting and it's thrilling and like I can smile about it now and look back on it as a very fun time that, you know, I was able to be with my family and we had this great adventure. Through that time, it was really tough, right? Also, at the same time, my wife at that time wasn't working. She had still going through her maternity leave and stuff. Yeah. So you do feel that extra pressure of being, you know, a single income household, but not having a permanent place to live. I don't know if you had a similar experience or whether it was a big difficulty for you.

(33:27) Jeremy Au:

Yeah, a lot of similarities there. I mean, thankfully we will manage to still be hunkered down in the same home right together. But I thought it was also quite a difficult time as well. I did catch COVID kind of like at the hospital from the second kid. And so I did miss like the first month of my kid's life because I was like quarantining myself away from the kid which kind of sucked as well.

On that note, thank you so much, Ameer, for sharing your journey. I thought it was really inspiring to hear three major themes. The first, of course, thank you so much for explaining the, you know, kind of like VAT, the tax refund structure, the processing industry about how, for example, on average, of 100 of refund of a 500 product, you get about 65 back and what goes in the industry and why it's complicated and why the various players and stakeholders are busy coordinating to make that happen.

Secondly, thank you so much for sharing about how you are tackling both in many ways, the value of what you're able to get, but also I think realistic about what we can do to structure or restructure the convenient side of it as well. And it was fascinating to hear about your strategy to work with your distribution partners, retail and work with the current players in the industry across multiple geographies and corridors.

Lastly, thanks so much for sharing about your pandemic decisions. I think on a professional front about deciding to retain your staff and take on the eventually high cost financially, but also on the fundraising side in terms of the revenue attraction and also conversely, also sharing about your personal struggles and how you overcame those challenges by moving by having a family and making some decisions about your own personal life as well.

On that note, thank you so much Amir for sharing your journey.

(35:00) Ameer Jumabhoy:

Thanks, Jeremy. And thanks to everybody who's listening.