Singapore’s Utu Secures $33 M, Expands Reach with CardsPal Acquisition in Tax-Free Shopping Sector

Utu, a Singapore-based travel tech company, has successfully raised $33 million in a Series B funding round, led by SC Ventures. The funding will support Utu’s growth and expansion plans, which include the recent acquisition of CardsPal, a Singapore-based fintech firm specializing in localized deals and promotions.

Despite the travel slowdown caused by the pandemic, Utu has actively formed partnerships with various travel, hotel chains, and retail brands. The travel sector has received limited venture funding in recent years, with a focus primarily on short-term rent cardinal hospitality.

Utu aims to innovate the tax-free shopping industry by providing tourists with an easy way to reclaim Value Added Tax (VAT) on their purchases and enhance their shopping experience.

Customers can choose between two options with Utu’s Tax-Free Card for tax-free shopping. They can receive frequent flyer miles or hotel points instead of traditional VAT refunds, or they can opt for an immediate store voucher equal to 120% of the VAT or GST paid while shopping overseas.

By partnering with Utu, retailers, airlines, hotels, and other organizations can improve customer loyalty and potentially increase their revenue from tourist shopping by up to 40%.

Utu has established partnerships with major global airlines like Emirates, Singapore Airlines, Qatar Airways, and Air France-KLM, as well as with leading European hospitality brand Accor. To facilitate seamless payments, Utu collaborates with fintech partners such as Nium.

While customers typically reclaim VAT through operators like Planet or Global Blue, who provide partial refunds, Utu seizes the opportunity to address this issue and offer a more comprehensive solution.

Utu’s co-founder, Asad Jumabhoy, draws on his experience operating retail stores at Singapore‘s Changi Airport in the late 1980s and early 1990s. He developed a tax refund business that eventually became Global Blue after selling it in 2012. Leveraging his expertise in retail margins, value-added taxes, and customer shopping habits, Jumabhoy created Utu.

Jumabhoy stated in a recent media statement, “We are building new product layers on top of the existing tax-free shopping infrastructure that unlock value for all stakeholders connected to tourist shopping—brands, tourists, and our VAT refund partners.”

Utu aims to address the challenges of complex VAT refund processes and limited refunds for tourists. By providing enhanced value during the shopping experience, Utu enables customers to receive over 90% of their refund value through airline frequent flyer miles, offering them greater benefits.

Through the acquisition of CardsPal, Utu gains access to a digital marketplace, a promotions engine, and a self-service merchant registration portal. This strategic move accelerates Utu’s expansion into markets like France and Italy and opens doors to approximately 50 other countries that offer VAT and GST refunds.