Singapore-based fintech startup Handshake Finance has successfully closed a S$500,000 pre-seed funding round to advance its escrow-as-a-service platform. The company aims to resolve structural payment trust issues prevalent in high-value service industries. This new capital will fuel its expansion within Singapore's renovation and interior design sector, its initial target market.
From Personal Experience to a Fintech Solution
The inspiration for Handshake Finance stemmed from the founders' personal encounters with payment-related fraud and business failures. Co-founder Lee Jun Xian saw a friend lose S$80,000 in renovation prepayments, while Christopher Chan's friend fell victim to a rental scam. These incidents highlighted a critical flaw where one party in a service transaction disproportionately bears all financial risk.
University classmates Christopher Chan and Lee Jun Xian combined their complementary skills to tackle this problem. Chan brought experience in designing compliant payment systems within regulated fintech environments. Lee contributed his venture capital background, specializing in scaling early-stage companies and navigating market entry challenges.
Establishing Trust Through Regulated Infrastructure
Handshake Finance operates on bank-grade payment infrastructure provided by partners regulated by the Monetary Authority of Singapore (MAS). All funds are securely held in segregated escrow accounts with DBS, ensuring complete compliance. This regulatory adherence is central to the company's mission of building a trustworthy service for its users.
Co-founder Christopher Chan emphasized that user trust is the company's foremost priority. "Making sure every fund flow is fully compliant, and that our users feel completely assured handing us money in what are often life-changing transactions, is our number one priority," he stated. This commitment ensures users feel secure during what are often significant financial transactions.
A Strategic Focus on the Renovation Sector
The company strategically selected the renovation industry as its initial focus due to deep-seated structural issues. The sector lacks a mandatory licensing framework, leaving homeowners vulnerable when engaging with unaccredited designers. This unregulated environment creates significant uncertainty and risk for consumers entering into high-value contracts.
Prevailing payment practices exacerbate the problem, with homeowners often required to pay up to 50% of the project cost upfront. This system leaves them with little recourse if a firm collapses or fails to deliver. Conversely, designers risk non-payment for completed work, which can severely impact their project margins.
Early Traction and Future Ambitions
After eight months of research with over 80 industry stakeholders, the company developed its platform. It uses AI to structure contracts with clear milestones, holding homeowner funds in escrow and releasing them incrementally. This model has already attracted over 40 interior design firms and led to partnerships with Renonation.sg and Network SG.
Co-founder Lee Jun Xian expressed excitement about the support received and the company's future direction. "We are laser-focused on fixing renovation first," he said, highlighting the need to eliminate common scams. The company's long-term vision is to expand its industry-agnostic model to other service sectors facing similar trust deficits.
With its S$500,000 in pre-seed funding, Handshake Finance is well-positioned to solidify its presence in Singapore's renovation market. By providing a secure, regulated escrow service, the company is building a new standard for transactional trust. Its success will pave the way for future expansion into other service industries across Southeast Asia.