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startups
It’s important to have good foundations. We can help put in place governance documents such as a constitution, shareholders’ agreement, founder documentation, and employee share option plans.
capital raising
We help with seed and angel rounds, VC financings, and pre IPO rounds. We review and negotiate term sheets, convertible notes, subscription agreements, and other standard investment documents.
m&a
Most tech companies in Southeast Asia are likely to exit via M&A (rather than IPO). As M&A experts in the tech space, we work with our clients throughout their life cycles to maximise value on exit.
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Sprout Solutions is a Philippines based SaaS payroll, HR and recruitment company. Sprout’s products are tailored to meet the requirements of each jurisdiction in which their enterprise clients operate.
We recently spoke to co-founder and CEO Patrick Gentry about working with Kindrik Partners on Sprout’s series seed funding round.
the sprout solutions story
Sprout was founded by the husband and wife team of Patrick and Alexandria Gentry. In 2016 Acceleprise (a US based SaaS accelerator) asked Sprout to be the first Philippines based company to join its program. Patrick says:
We were interviewed by other accelerators, but chose Acceleprise because it specialised in assisting companies that were looking to scale their sales to enterprise customers.
The connections that Patrick and Alexandria made at Acceleprise helped them to raise an angel round from overseas investors. Those funds were used to expand the company’s software engineering and sales teams. The company grew rapidly, and by the middle of 2017 it had over 75 employees and 150 enterprise clients in the Philippines.
After proving the business model locally, the company wanted to expand into other emerging markets in Southeast Asia. Patrick and Alexandria began looking for institutional investors to fund the tailoring of the company’s products for each new market, and to grow the international sales and services teams.
the deal
Patrick was well connected in the startup ecosystem after several years of bootstrapping both Sprout and a previous company. A fellow entrepreneur provided Patrick with a warm introduction to several VCs with a focus on B2B SaaS products. Sprout soon began negotiating a series seed investment round led by VCs Kickstart Ventures (Philippines), Wavemaker Partners (Singapore), and BEENEXT (Singapore).
A condition of the round was that Sprout needed to redomicile in Singapore. This type of restructure (or flip) is quite common, since many Southeast Asia VCs will only invest in a Singapore incorporated entity. There are a number of reasons for this, including taxation, minimal restrictions on foreign ownership, the ability to easily repatriate investment returns from Singapore, and legal certainty (including IP protection).
For Sprout, a new Singapore head company was incorporated and the existing company became a Philippines operating subsidiary. The terms of the restructure were incorporated into the long form investment documents and the flip was completed at the same time as the rest of the investment round. Patrick recalled that:
Some aspects of the restructure were unique. Kindrik Partners were great in this scenario as they did a deep dive to understand the specific requirements and complete the process by working closely with local counsel.
The company closed its US$1.6m series seed round in late 2017. Patrick told us that:
Completing the round was a huge deal. I knew we could accelerate this business with capital, and felt like the timing was perfect. It’s exciting to gain the freedom to stretch a bit and continue our rapid expansion in new areas of the business and market.
working with us
Kickstart recommended Kindrik Partners to Patrick as they had worked with us on the other side of previous deals.
Patrick says:
Kindrik Partners were invaluable in moving the deal forward as efficiently as possible by keeping the negotiations centred on the critical commercial points, and by providing insight as to what was common market practice in these areas. I can’t emphasize enough how important it is to have a strong partner that not only knows the process inside and out, but will also go to war for you and represent you as if they are negotiating for their own company.
Kindrik Partners even assisted with the calculation of the cap table, as the deal involved some bespoke debt conversion calculations relating to a previous round.
As entrepreneurs we pour our heart and soul (and blood and sweat) into our companies, and to have someone fighting for us as if it were their own – that’s just awesome!
Sprout is rapidly becoming a regional SaaS star, and we would like to thank Patrick for taking time out of his frantic schedule to speak with us.
[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]
Bambu is a Singapore-based robo-advisory startup. We talked to the company about working with Kindrik Partners through their successful Series A and B rounds.
bambu
Bambu is a B2B robo-advisor platform provider to banks and other financial institutions. Their digital platform allows these financial institutions to offer automated and technology-augmented investment services to their customers. The company started up in August 2016, and now has 70 staff with clients in America, Europe, the Middle East, and across Asia.
Bambu raised US$10m in their series B round which closed in June 2019. We spoke to their CEO and co-founder Ned Phillips about the fundraising process.
getting introduced to Kindrik Partners
Ned first heard about Kindrik Partners through an early investor and advisor to Bambu. When it came time to do their Series A round, Bambu had secured its first strategic investor, Franklin Templeton Investments, as well as its first venture capital investor, Wavemaker Partners. Since it was their first equity round, Ned knew it was time to bring in professional legal advisors.
As part of their search, Ned said that he met with a few of the bigger law firms, but none of them quite fit.
“You meet the partner”, he said, “but you know you’re not going to get the partner – the actual work always gets handed off to someone else in the firm.”
Kindrik Partners was transparent and honest when presenting their team. “What I liked about Kindrik Partners was that when I met Chris [Wilson] and Sarah [Yen], they said ‘this is us, you’re going to be working with us’, which was nice.“
“That made a big difference.”, says Ned. “It was important for us to know who we were dealing with, and it was very clear that it was them – that this was my team.”
raising the series a, then the series b
The series A round was very different from the seed round for Bambu. “The series A was the first time we were introduced to equity documents”, recalls Ned. “In our seed round we had used a SAFE convertible note, so there were no equity investors at that point.”
It was a big learning curve, particularly as a first-time founder. “My clearest memory about the Series A was the amount I learned about things I never knew about”, says Ned.
“There were a lot of things about equity documents that I wasn’t familiar with – tag-alongs, drag-alongs, founder vesting, liquidity preferences, warranties.”
(Unfamiliar with these terms? Click through to our startup glossary to learn more.)
When it came time for the series B round, Ned thinks that they were fortunate with how things went, and that it felt easier, attributing it to understanding more of the process and jargon.
“We had Franklin as a returning investor who was also willing to lead the round for us. We ended up with two investors filling the round – but it turned out that as soon as our round was full, everyone else wanted to come in, which was a nice problem to have.”
For other startups looking to raise money, Ned advises perseverance. “It’s not that it’s a numbers game, but it does take persistence. We reached out to so many investors. Many people give up at 10, or 20, 30, 40 people telling them no. But don’t be deterred – be polite, say thank you, and move on.”
working with Kindrik Partners
Ned describes the team as super helpful. “When we were first introduced, the fundraising process was new to me – the combination of Chris and Sarah on board to help was invaluable.”
Ned highlights Chris as an incredibly founder-friendly lawyer. “As a founder, you want to keep good investor relations, since it’s going to be a long-term relationship.”
“Chris could be the bad cop when he felt it was in the company’s best interests. He was also great at explaining what was important and what we could let go. He was strong, but fair.”
Ned also emphasises the complexity in negotiating a series A round. “Raising money isn’t just a negotiation on value (that part is done fairly quickly). There are all of these other things to decide in terms of what to hold onto and what to let go of.”
Ned recommends the law firm to other startup founders doing who are looking to raise funds for their company. “The team at Kindrik Partners really focuses on raising funds, and it’s so valuable to be talking directly with the people who are holding the pen on the documents, rather than just being a part of the sausage mill.”
“Put it this way – when it came time to do our series B, we didn’t spend one second thinking about using someone else. It was like, OK, we’re doing our round. Let’s get in touch with Kindrik Partners and get started.”
what’s next for bambu
It’s an exciting time for Bambu. The startup has lots of plans from the proceeds of their series B, including new products set for release and building their London presence. But Singapore remains home for the time being.
“Singapore is really helping fintech”, says Ned. “Honestly, it’s amazing – the Fintech Festival alone had 40,000 people attending last year. We’re selling to the world, but there’s no better place to do that from than Singapore.”
explore bambu
[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]
Fintech startups are the next big thing in the Southeast Asian tech scene. Kindrik Partners client C88 (formerly Compare88) is racing ahead of the pack after securing the backing of high-profile VC investors including Telstra Ventures.
C88 provides online financial services price comparison tools, helping consumers to compare the offers of major brands for products such as credit cards, personal loans, mortgages, vehicle loans, savings accounts and insurance. The company also offers a brokerage service, enabling consumers to purchase products directly on the C88 platform – for which C88 has secured relevant financial services licences through Southeast Asia.
Founder and CEO, J.P. Ellis, talked to us about the company’s background, its most recent series B financing round, and how they have found working with Kindrik Partners.
the c88 story
Prior to C88, founders Karl Knoflach and J.P. worked in private equity, finance, operations and leadership. The C88 senior team also consists of Gary Empl, a professional software developer with over two decades of experience leading teams in the creation of cutting-edge software in the financial services industry. Karl and Gary were part of the original founding team of einsurance.de in Munich in 1999 – a revolutionary company in the German insurance space which later became Check24.de, the German market-leader.
C88’s commercial teams in Indonesia, the Philippines and other markets are made up of senior bankers, insurance executives and sales operators with many years of experience in financial products sales and distribution. This experience, and the networks that senior team members bring, is crucial to C88 maintaining its market leader position.
J.P. notes that the Southeast Asian economy’s migration to digital begin with communities moving online for social needs. This was followed by online purchasing of physical goods, usually electronics and clothes, then travel bookings, followed more recently by financial services. This migration began in earnest in 2009, and by 2011 there were already major e-commerce providers. Online channel emerged in the insurance vertical in 2013, and C88 followed quickly releasing its platform in 2014.
J.P. observes that high traffic digital marketplaces, such as C88’s CekAja.com brand in Indonesia and eCompareMo.com brand in the Philippines, benefit consumers as well as underwriters. C88 can use its volume to create pricing efficiency for their customers. That volume also reduces the overall cost of acquisition for underwriters. Prior to the emergence of financial services e-commerce, banks and insurers basically only had two options for sales in the large markets of Southeast Asia: branches or physical agents. Digital sales through C88’s platform provides a highly cost-effective alternative.
challenges
Southeast Asia remains highly fragmented. Operating a multi-jurisdictional structure that is attractive to both consumers and providers, while keeping national regulators on-side, is challenging.
The company also faces the challenge of creating a common culture across national teams. Incentivising teams in different verticals and across countries to work together to solve problems creatively is an ever-evolving process of creative leadership and problem solving.
J.P adds that fortunately, C88’s team are multi-lingual and truly love what they do. It is not at all uncommon for them to log long hours during the week and weekends, because they genuinely enjoy what they do in building systems and solving problems for consumers in the region.
working with Kindrik Partners
As well as advising C88 on its venture capital financing rounds, Kindrik Partners’s Lee Bagshaw and Chris Wilson have helped C88 implement a variety of business critical structures including inter-company, cross-border licensing agreements and intellectual property documentation.
J.P says that Kindrik Partners provided high-quality and competitively-priced legal services in the critical areas of C88’s business. J.P. particularly appreciated the level of support he received when negotiating and completing the company’s recent Series B round led by Telstra Ventures – he says that the Kindrik Partners team know venture capital deals inside out, and made the negotiation of the financing documentation a breeze.
Kindrik Partners looks forward to helping C88 to continue its journey to become a leading fintech player in Southeast Asia and beyond.
Explore C88.
[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]
