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Singapore based property startup 99.co likes a challenge. Dominated by well funded regional players, there would be easier sectors to disrupt than online property. However 99.co is fighting hard with a unique proposition. The company has raised two rounds of funding since incorporation and is backed by high-profile investors including Sequoia Capital and Facebook co-founder, Eduardo Saverin.
Founder and CEO, Darius Cheung, talked to us about the company’s progress, its most recent capital raising transaction in 2015, and how they have found working with Kindrik Partners.
the 99.co story
Darius is one of Singapore’s celebrated young tech entrepreneurs having sold mobile security startup tenCube to McAfee in 2010. This was a decent sized exit for a Singapore tech startup at the time. With the current hot funding environment and massive interest in mobile disruptive technologies in Southeast Asia, Darius is now looking to build a company for an even larger exit.
Not surprisingly, given the city state’s rapid growth, Singaporeans have always had a real interest in property. So 99.co is playing in a compelling space. Singapore has over 30,000 property agents many of which use online real estate platforms such as 99.co. The company recently set up an Indonesian website and plan to get going in Malaysia and Thailand further down the line.
99.co differentiates itself from larger competitors by promising a more intuitive search experience, where the rankings for listings are influenced by the quality of the published content. The site, for example, could favour listings with more photos or with value add information such as commute times or local amenities. This contrasts with the traditional model where the level of fees paid typically pushes classifieds higher. Darius believes that users will increasingly seek this kind of consumer friendly experience.
99.co charges agents a basic subscription fee to list their properties. The company has, however, recently launched a new product called 99PRO – a subscription model where agents can unlock additional features like interactive map searches and new data.
challenges
Darius agrees that the competition is tough to crack in Singapore and the region, given the dominant players. Content is king – the number of listings is fundamental to the success of the business. Bridging the gap, and chasing the platforms that have the majority market share, requires innovative offerings. Plus it’s a crowded market. Aside from other startups trying to challenge those established players, print media still retains a surprisingly sizeable chunk of the market.
The nature of 99.co’s subscription model means the company will need to add alternative revenue streams over time.
Finally, talent acquisition in Singapore and building the 99.co team has been difficult given the number of other startups also hiring sought-after developers.
working with kindrik partners
Lee Bagshaw was introduced to Darius by one of 99.co’s investors. Lee has helped the company through each of its financing transactions. Most recently in 2015, Lee, supported by Chris Wilson, advised on the company’s series B transaction led by Sequoia and Saverin.
Darius’ previous view on lawyers had been that they were expensive and it was not always easy to see their value. He describes working with Lee as a breath of fresh air. Whether by email, on the phone, by WhatsApp or even in the passenger seat of Darius’ car, Lee’s advice was always simple to understand, but with real value add.
Darius was impressed with Kindrik Partners’s knowledge of VC financing deals in Southeast Asia. He says Lee and the team were also very fast, generally turning documents around in under 24 hours. Darius believes that, by working for a tech focussed firm, the Kindrik Partners lawyers have a greater connection with startup founders, combined with unique experience. Throughout the negotiations, Darius found that even if the company could not secure the best outcome on all points, Lee and Chris ensured that he understood clearly the implications, so he could quickly move on.
summing up
99.co are operating in an exciting space in Southeast Asia. Real estate tech companies globally have grown rapidly, achieving some astonishing valuations.
Sequoia’s and Saverin’s backing shows that notable investors are looking carefully at this space in Southeast Asia, particularly for platforms that are distinguishable from the others.
Kindrik Partners will be closely watching 99.co continue its growth to become a significant online property player in Southeast Asia.
Explore 99.co.
[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]
mClinica is a Singapore-headquartered health-tech company which provides data, analytics, and patient engagement tools for healthcare organisations in Southeast Asia. In 2017, mClinica closed a USD$6.3million series A financing round, with Kindrik Partners advising the company.
Founder and CEO Farouk Meralli talked to us about mClinica’s journey to date and working with Kindrik Partners.
the mClinica story
Whilst working for multinational pharmaceutical companies, Farouk identified issues in the healthcare sector in emerging markets. Pharmaceutical companies and public sector entities (NGOs and governments) lack access to consolidated data that similar companies in developed markets have. This is particularly so in Southeast Asia where pharmacies are mainly independent owner-operated businesses rather than the large branded chains that you see in established markets.
This led Farouk to start mClinica to connect pharmacies on a common mobile platform. The company launched in the Philippines in 2013, and has since expanded to Indonesia, Vietnam, Thailand and Malaysia. By the end of 2017, mClinica had connected over 60,000 pharmacy professionals and 12,000 pharmacies on a single digital platform. This platform now addresses several challenges in healthcare including education and engagement of pharmacy professionals, pharmacy-driven patient programs, and last-mile data.
Farouk recently received the Public Health Innovator Award from Harvard University for his work with mClinica, and was the youngest ever recipient of the award.
challenges
Due to the fragmented nature of the healthcare industry in Southeast Asia, developing mClinica’s products was no easy feat. Farouk had to recruit healthcare professionals who also had expertise in mobile technology, engage with lots of government agencies and regulators, and develop products that were flexible enough to work in different health contexts. However, Farouk’s patience and vision has paid off, with its pharmacy network now reaching approximately 80 million patients per month.
The business has also been through some financing rounds and other corporate transactions along the way, which Farouk admits can be a big distraction from the day job of growing the business – like all entrepreneurs, he just wants to focus on solving real problems for end users.
raising a series A round
mClinica’s series A round was led by Silicon Valley fund, Patamar Capital (formerly Unitus Impact), and joined by UK based Global Innovation Fund, MDI Ventures, and Endeavor Catalyst. Existing investors also took part in the investment round.
The cap raise was to help mClinica grow faster and enter more markets across Southeast Asia. By 2017, mClinica had a good profile in the regional tech and healthcare scene, and was known to investors. The company therefore had the luxury of picking investors that had knowledge of the healthcare space and would offer the best long-term strategic value.
In the end, mClinica was able to secure investment from well-known international investors, all of whom believed in the vision of transforming healthcare in Asia. A term sheet followed, and once a lead investor was committed, was agreed fairly quickly.
Farouk described an important aspect of the transaction was discussing the term sheet openly with all interested parties from the outset. This included existing seed investors who required careful management to avoid roadblocks later in the deal process.
working with Kindrik Partners
mClinica has worked with Lee Bagshaw since the incorporation of the business, including advising on seed funding deals with Kickstart Ventures, Spiral Ventures (formerly IMJ Investment Partners) and 500 Startups. Kindrik Partners has helped the company with other corporate and commercial matters, aside from the series A deal.
Farouk says: I believe mClinica was one of Lee’s first clients in Southeast Asia. Therefore to some extent we’ve been on the journey together in what is an exciting but challenging digital market. We feel like we’re in safe hands with Kindrik Partners. The team is very easy to work with and their VC transaction experience is second to none.
what’s next?
Since completing its series A financing, mClinica has continued to expand its pharmaceutical network, work on product development and grow its team. Right now, the focus is still on Southeast Asia, but mClinica’s products are also suited to many other developing countries worldwide.
As a transformative health-tech company operating in emerging economies, we’re proud to have been a part of Farouk’s journey to date. The digital economy in Southeast Asia will play a great role in improving healthcare delivery over the next decade and mClinica is leading the way.
[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]
Singapore-based Pixibo provides personalised size and fit recommendations in real time for online retailers and their customers. The fashion-tech startup worked with Kindrik Partners on their recent series A raise.
We spoke to founder and CEO Rohit Kumar on Pixibo, the capital raising journey, and working with Kindrik Partners.
pixibo’s story
Rohit is an ex-Googler with experience across Europe and India, before heading to Singapore to head up operations for e-commerce advertising company Sociomantic. Between 2013 and early 2016 he launched and managed all of Sociomantic’s APAC operations and was part of the team that sold the business to dunnhumby, a Tesco company.
It was at Sociomantic that Rohit identified an issue plaguing fashion e-commerce sites. People were browsing clothes online, but very few of those visits converted into sales. “The average conversion rate is 1.5%”, says Rohit.
Pixibo’s technology was formally launched in 2018, after a few years in development. The platform makes real-time size recommendations, personalised for every shopper and for every brand and SKU. For a retailer this boosts conversion rates, reduces return rate and improves customer satisfaction. Its size recommendation engine is entirely white labelled and can be natively integrated into online stores.
“In online shopping, there’s a lot of pain points, from finding something you like, to working out which size is correct for you,” says Rohit.
“Decision fatigue can come in, reducing sales and resulting in increased return rates. The Pixibo platform works to reduce the friction felt by the consumer and the retailer.”
working with kindrik partners
“I was educating myself about series A rounds when I came across Kindrik Partners’s content online,” Rohit says.
“It was my first time doing an institutional round so I was spending more time online trying to get my head around the legal terminology and the types of things that show up. Drag alongs, tag alongs, liquidation preference clauses. There’s a lot to understand.”
(confused? see our startup glossary )
“It looked like Kindrik Partners were the best lawyers for startups,” says Rohit.
“It was clear from the content that was available online that it was their area of expertise. When I eventually needed to bring in a lawyer to help with my round, I reached out.”
on the series A round
Pixibo already had several angel investors prior to their series A round in 2018, but the startup did not have any VCs on board, so the experience was new.
“We had VPs from Google who invested at an early stage, as well as strong private angel investors. But this was the first institutional round, and it felt very different.”
A big learning was how much longer the process took. “I thought you’d just go out to market, pitch, and then get them to sign. I eventually came to understand the level of process that institutional investors require, and how this stretches out the timeline.”
“There’s a great level of detail required. From investor interest to the term sheet to drafting the shareholder’s agreement, share subscription agreement and the whole nine yards, to signing, to getting money in the bank… it can take a long time!”
Fortunately, runway was less of a concern for Pixibo. “We weren’t in a rush. We had revenue, so there was no immediate need to get funding in”, says Rohit. “We already had a recurring revenue from our licence fees we were charging. That started conversations for us with investors, too.”
working with kindrik partners
Rohit found working with Kindrik Partners and partner Lee Bagshaw provided a lot of value during the capital raising process.
“Working with Lee was great. He was very responsive to my requests and concerns and was always happy to get on a call if need be to walk through things with me.”
Kindrik Partners’s experience in capital raising in Southeast Asia was also an asset to Pixibo.
“As a first time founder, sometimes you’re like wait, hang on, why is that in there? Lee was invaluable in these situations. He understood what terms were negotiable and what terms weren’t, and was instrumental during all of the back and forth with investors.”
tips for founders embarking on their A round
Rohit has a few tips for those entrepreneurs who are considering going out to do their series A round.
- start out 6 -8 months before you need the capital: especially if it’s your first institutional round (it gets easier with a follow-on round, because you’ll have existing investors to help you get your foot in the door).
- consider a rolling close: since you’re looking for investors who are the right fit in a long-term partnership, having a rolling close allowed Pixibo to get the money in the bank from the investors who were committed, while continuing to find the perfect fit to close out our round.
- beware the temptation to think that any money will do: in the beginning, the temptation is to look for anyone with a cheque book, but then you get smarter. Find the VC’s thesis and their sweet spot, and get smarter at looking at their portfolio to see if you fit in. Who will be interested in your story?
- don’t raise too soon: Traction is important. Wait until you’re in a strong position to raise, if you can. In our case, as we’re B2B, we had clear proof points that our product works, solves a real problem for online retailers and that they are willing to pay us for it. Investors will want to see that you have put in the hard work and that capital will accelerate growth.
- have a plan for the money. You have to articulate why you need capital now, and how it will help your business.
what’s to come for pixibo
The future is bright for Pixibo, and Rohit is looking ahead to expand into new markets. “The most exciting thing about us is that we’re location agnostic. The problems retailers have in Singapore are the same ones that they have in Sydney. The opportunity is massive.”
[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]
