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about X0PA.AI
Singapore-based X0PA.AI is a SaaS talent hiring and recruitment platform that uses AI and data science to match applicants to roles, as well as predict issues such as attrition, loyalty and performance.
CEO Nina Suri has scaled the team over three years to twenty-five employees, located across Singapore, India, and the UK, with plans to start in the UAE.
X0PA recently implemented an employee share option plan (ESOP) and Nina shared her experience.
why implement an ESOP
“Having had over twenty years of entrepreneurship, I knew I wanted to build a culture of ownership and inclusivity, and ensure that our team felt involved and satisfied”, says Nina.
“An ESOP is one way that our employees can feel like they’re a part of growing something – that our success is their success”, says Nina.
putting the ESOP in place
The company originally drafted some ESOP paperwork when they first incorporated, but as they grew, X0PA’s company secretary recommended that it be replaced with something more robust and market standard.
“We learned that the ESOP needed major amendments in order to be more in line with what is typically seen in the market in Singapore, and reflect what investors are likely to expect”, said Nina.
Nina reached out Kindrik Partners after the firm was recommended to them by their company secretary. XOPA worked with Sarah Yen in Kindrik Partners’s Singapore office, who was able to create the right framework for the startup.
“We were looking for a firm who advised a lot of startups in Southeast Asia. Sarah took the time to explain and really make sure that we understood the mechanics of how the ESOP operated. This made it easier for us to communicate that to our employees.”
“It’s important when putting together an ESOP to consider several different factors”, says Sarah. “What works for the company, what is standard in the market to attract quality talent, and what your investors and most importantly a future potential buyer might expect to see.”
about the ESOP
A X0PA employee is invited to participate in the ESOP once they have been with the team for twelve months, and if they’re considered a ‘high performer’.
“At the moment we have a rockstar team, and 100% of the people who we have hired have been invited to join”, says Nina.
“In my previous venture I also felt strongly about letting my employees be directly involved – but I gave them straight equity. It was a more traditional business with a partnership model.”
“This time, an ESOP seemed more appropriate – it was a more scalable model and more appropriate for the type of company we wanted to build.”
X0PA’s management team put aside 10% of the company’s equity towards the ESOP, with the expectation that this allocation would last at least five years. They set the exercise price by the valuation of the company at the time of allocation.
Allocations were not standardised per employee but were allocated according to the contribution and importance’ of the employee’s role in the organisation, according to Nina.
The X0PA team also included an acceleration clause in the ESOP – if the company exits before the vesting period, their employee’s options fully vest.
advice for other founders
“We weren’t familiar with the nitty gritty of putting in place an ESOP – it was a new experience for us”, says Nina.
“My advice would be to go with a lawyer who is experienced with startups and ESOPs, so you don’t have to go through the complications that we went through as we started to scale”, she says.
Nina also stressed that it was important to familiarise yourself with the mechanics of your startup’s ESOP so that management could communicate with staff effectively about how it worked.
Nina also had some tips about how to communicate with a team when implementing an ESOP.
“We kept it very simple for our staff. We broke down into the main points – what is the ESOP, what does it mean for them, what do they get, how much do they get. We didn’t want to get them worked up about the legal language.”
Nina also made sure that she sent each team member an individual email after the scheme was introduced to the company, confirming what the ESOP meant, how that individual’s options vested, and what would happen to their options in different scenarios.
“You need to make sure your team understands what the ESOP is. If you’re giving them something, and they don’t appreciate it, and then what’s the point? It’s best to spell it out and make sure that everyone understands – then you’re all working towards a common purpose.”
what’s next for X0PA?
“We’re starting to move from startup to scale up now. We’re experiencing massive acceleration and growth, with several Government departments, enterprises, polytechnics and universities as clients”, says Nina.
“Our product is ready, and strong, and we’re ready to grow and help our clients with their digital transformation. We are focused on growth both from increasing market share in the markets we operate in as well as market expansion point of view.”
[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]
Explore our other case studies here, or access our full library of ESOP guides and templates via our resources section.
about Singapore Tourism Accelerator
The Singapore Tourism Accelerator is an equity-free 6-month programme for promising technology companies that power the travel and tourism industry. The Accelerator is organised by the Singapore Tourism Board (STB) and is managed by its appointed Corporate Innovation partner, Found8.
The cohort companies undergo a three-month accelerator program where they participate in capacity- building workshops providing insights to the Singapore ecosystem and market as well as the tourism and hospitality industry. The program is tailored to support the startups in identifying and securing a pilot partner and project to testbed their solution with. This is followed by three months of pilot implementation and execution with one of the close to 30 industry partners participating in the programme – including Singapore Airlines, Changi Airport, Marina Bay Sands, and other prominent tourism brands.
The Accelerator provides founders with an opportunity to learn critical market entry skills, pilot design and implementation skills, and fundraising strategies. The programme also offers 1:1 mentoring, expert feedback, and access to industry events. The accelerator culminates in a Demo Day attended by investors and members of the tourism industry.
The Accelerator is currently running its second cohort of 10 companies and Kindrik Partners has worked with the program as an advisor for both. Particularly in the case of startups who have come from outside the region, that can include incorporation in Singapore with a view to getting investment.
pivoting to remote-first with COVID-19
With the second cohort set to begin just as the COVID-19 situation was escalating in Singapore, the decision was made to pivot from an onsite programme to a digital-first programme.
“The global health crisis put a lot of different challenges on top of everyone’s normal workload. Now that we’re split across seven different time-zones, it’s a big ask in terms of flexibility and adaptability for the people who run the workshops. We are all now masters of Zoom,” says Katrin Miller, program manager.
kindrik partners support
presentations and office hours
In line with the move to remote-first, Sarah Yen, senior solicitor at Kindrik Partners, presented to the second cohort via webinar, covering basic corporate and commercial topics such as seed rounds and other common legal issues for growth stage companies.
The startups were also able to book one-on-one Zoom legal consultations to address any queries not covered in the presentations.
“It was beneficial to the startups to know they had access to a lawyer to address more specific questions once they were further through the process”, says Katrin.
“Throughout the programme, Sarah has been stellar to deal with. She has always made herself available to our startups and the advice she gives to help the founders is always well structured and clear.”
online templates
Founder in each cohort also have access to over 30 free legal templates and guides for startups that have been tailored to building tech companies in Southeast Asia.
“Anytime one of the startups needed a template, I always consulted the Kindrik Partners database first to see if there was something they could start working from,” says Katrin.
The templates cover common corporate and commercial agreements and resolutions used by growth startups. These include founder agreements, NDAs, and sample term sheets.
support tailored for the programme
Given the industry connections that the Accelerator offers to industry heavyweights like Singapore Airlines, Changi Airport, and Marina Bay Sands, Kindrik Partners also provides targeted assistance on pilot agreements.
“Running a pilot programme is a great way to fine-tune a solution and to approach enterprise customers”, says Sarah. “However, since there’s no real uniformity to pilot agreements, founders need to be aware of some key provisions that will shape their experience with the organisation they’re dealing with.”
Katrin agrees, adding “Some corporate partners have existing documentation around pilot programmes – but for many, it’s up to the startup to set up a legal document that seals the partnership. Kindrik Partners provided real value in educating the startups and help them understand the legalese – whether it be a letter of intent, an MOU, or formal partnership agreement.”
after demo day
fixed fees on seed funding rounds
Following demo day, Kindrik Partners is available to the cohort companies to assist them with their first institutional funding rounds. To bring more transparency to the market around legal costs, Kindrik Partners offers fixed fees for institutional seed funding rounds and some associated projects, such as ESOPs.
“We want to help founders understand the terms on which they are raising their first formal funding, to help them close the deal as efficiently as possible, and of course to ensure they are getting market terms. Providing fixed fees removes one of the biggest obstacles to start-ups engaging counsel during the funding process, i.e. concerns around creeping costs and their lawyers running the clock on each call or email query”, partner Chris Wilson says.
final words
The mentorship and guidance given to the startups has been highly valued by founders in the accelerator programme.
“It’s been a hard time to run a tourism accelerator during the coronavirus pandemic – it’s no surprise that we are the hardest hit. But we’ve noticed that many of our industry partners have stepped up and focused on innovation to give them a competitive edge when the industry recovers.”
“Having Kindrik Partners on hand to assist has been truly valuable throughout the course of the programme as our founders navigate the new normal.”
Southeast Asia’s online-to-offline (O2O) space is hot. Platforms linking online customers with offline services are now part and parcel of daily life, from the likes of well-backed Go-Jek and Grab, to Fave – one of the region’s most exciting new O2O companies.
Fave started out in 2015 as a fitness sharing platform called KFit before stepping into multi-category local commerce with the launch of Fave. The company is connecting millions of customers with thousands of local service businesses including restaurants, cafes, salons, spas, hotels, gyms and more.
Founder and CEO, Joel Neoh, talked to us about their journey and how they have found working with Kindrik Partners.
the Fave story
Fave’s founders Joel Neoh and Yeoh Chen Chow are no strangers to O2O local commerce. Joel started Groupsmore, a daily deals site that was acquired by Groupon in 2011. Joel went on to head up Groupon’s business in APAC, alongside Chen Chow, who led Groupon’s regional operations.
Spotting an opportunity to disrupt the fitness business in APAC, Joel left Groupon to start KFit, the region’s first-ever fitness sharing platform, touted as an Uber style platform for gyms and fitness studios.
After a year of tremendous growth and raising a US$12m series A financing, the company set its sights beyond the fitness space and launched its multi-category platform. It went on to acquire Groupon’s businesses in Indonesia, Malaysia and Singapore.
According to Joel, the pivot to a broader O2O platform was a natural progression for the company, as multi-category local commerce presented a much larger business opportunity. Joel observed that apps with high-frequency use cases tend to succeed in a competitive landscape. Fave was launched with a focus on the food and drink category – a major part of life in Southeast Asia.
Whilst deals businesses have been around for a while, Fave is focused on merchant-first innovation via deeper product development and data science. All with a view to enhancing the customer experience with daily deals and rewards. Joel notes that the traditional deals model only brings in new customers to offline businesses and stops there. To truly add value to local businesses, Fave wants to create an ecosystem where businesses can acquire, retain and re-target customers in the online world.
working with kindrik partners
Lee Bagshaw started working with Joel from the set-up of what was the KFit business in 2015. As well as advising Fave on its VC financing rounds, Lee and Chris Wilson have helped Fave on the three M&A deals relating to the acquisitions of Groupon’s Indonesian, Malaysian and Singaporean businesses.
Joel says that Kindrik Partners provided insightful and comprehensive legal advice that played a key role in helping Fave reach some major milestones. He specifically notes Kindrik Partners team’s considerable expertise in VC and tech M&A, which helped the company efficiently navigate the documentation negotiating during its funding rounds and the Groupon transactions.
The future of O2O commerce in Asia looks bright in Southeast Asia as new generation of digitally savvy consumers come online. Kindrik Partners looks forward to helping Fave continue its rapid journey to become a leading O2O player in the region.
Explore Fave.
[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]
