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Singapore-based Utu nets $33M and acquires CardsPal to transform tax-free shopping

Utu founders
Picture credits: Utu

As per the World Travel and Tourism Council, the travel industry is expected to reach $9.5 trillion or 95% of 2019’s pre-pandemic peak in 2023. Despite the remarkable turnaround, only about 1% of venture funding in the past 15 years has gone to travel, mostly in short-term rental hospitality. 

Within this sector, the tax-free shopping sector, where tourists can reclaim the value-added tax (VAT) on their purchases, is especially subject to this innovation lag. Tax-free shopping was designed to stimulate tourist spending, but the cost of refund processing has stymied its potential benefits for travellers. 

Singapore-based Utu comes to unleash the potential of the same. It is a travel technology company on a mission to enrich the tax-free shopping experience.

Aims to scale its products globally

In a recent development, Utu scored $33 million in combined transaction value. The deal comprises an acquisition and a funding round, which consists of both a portion of new funding from SC Ventures, and the roll-over of earlier funding from Singapore-based investors who supported the company through the pandemic. 

After establishing key partnerships with leading global airlines, hotel chains, and retail brands, Utu will use the fresh funds to scale its products globally.

As part of the deal, Utu acquired CardsPal, a Singapore-based platform focused on hyper-localised rewards promotions, for an undisclosed sum. 

Asad Jumabhoy, co-founder and CEO of Utu, commented: “The cross-border travel market is ripe for a technology-driven transformation, with tax-free shopping presenting vast untapped potential. By enhancing the value of VAT and GST refunds for travellers, we’ve reimagined the cross-border retail experience and devised a technology-based business model unlocking previously inaccessible value. This strategy benefits all stakeholders—brands, hotels, airlines, and VAT refund operators—while also enabling governments to compliantly recycle VAT refunds within their borders.”

Gautam Jain, Member, at SC Ventures said: “CardsPal is a great example of why we at SC Ventures believe in the power of innovation and support our employees to have transformational impact. Through SC Ventures’ Intrapreneurship Program, CardsPal grew to become a business with award-nominated UX. We look forward to utu’s continued success scaling its products across the globe using CardsPal’s technology.”

Acquisition of CardsPal

The acquisition will allow the company to accelerate growth by leveraging CardsPal’s unique mobile-first technology and incorporating its talent into the wider organisation.  

Incubated by SC Ventures, CardsPal’s technology, and mobile-first technology talent will equip Utu with a digital marketplace, a unique promotions engine, and a self-service merchant registration portal. It will also help expedite its rollout in major tax-free shopping markets like Italy, Thailand, the UAE and some 50 countries offering VAT and GST refunds. 

Additionally, Utu is planning to integrate CardsPal’s hyper-localised retail experience into an improved pay-with-points offer for its users.

Transforms tax-free shopping

Founded by travel retail and VAT refund veteran Asad Jumabhoy and Ameer Jumabhoy in 2014, Utu collaborates with refund and travel industry partners to enhance refund value through innovative B2B and B2C solutions. 

By linking payments, rewards, and shopping, utu introduces new value for tourist shoppers, retailers, VAT refund operators, and the tax-free shopping value chain. By changing the world of tax-free shopping, it transforms a once administrative process into a more rewarding experience for everyone – brands, VROs, and tourists.

Travellers using Utu’s Tax-Free Card can gain up to 40% more value by opting for frequent flyer miles or hotel points over cash refunds. utu is also able to issue immediate store vouchers equivalent to up to 120% of the VAT or GST paid during overseas shopping. For retailers, airlines, and others, partnering with Utu could potentially increase their revenue from tourist shopping by up to 40%. 

Currently, it partners with 10 leading global airlines, including Air France-KLM, Emirates, Etihad, Qatar Airways, and Singapore Airlines. It also partners with Accor, Europe’s largest hospitality brand.

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