Local entrepreneur Alex Lau's energy management solutions company, Anacle, is publicly listed on Hong Kong's Growth Enterprise Market. (Photo credit: Anacle)
By Joy Fang
Ten years ago, Singaporean Alex Lau was struggling to get his energy management solutions start-up off the ground.
The then-33-year-old was having difficulty raising cash and also faced obstacles convincing potential customers that his product was better than those offered by more established corporations. Still, he kept at it, raising money from family, friends and “sympathetic contacts” during the first couple of years. “Every dollar was difficult,” said Mr Lau. “What made things easier was the Spring SEEDS programme that matched every dollar we raised. As the company's profile rose and financials improved, fundraising became gradually easier.”
To make sure his products got to the market, Mr Lau allowed bigger and more established companies to slap their brands on his products to give them an edge over the competition. Today, Anacle Systems is thriving. Its software solutions – which aim to help companies improve their energy and business efficiencies – can be found in more than 100 buildings in Singapore, and it now has 108 staff members. A Frost & Sullivan research report ranked Anacle as the second largest provider of commercial property management software and the third largest provider of building energy management systems in Singapore's retrofit market 2015 in terms of revenue.
The company crossed a key milestone in December last year when it successfully conducted its initial public offer (IPO) on Hong Kong’s Growth Enterprise Market, raising HK$74 million. Mr Lau attributes the Accreditation@IMDA programme as a big part of the firm's success.
Managed by the Infocomm Media Development Authority (IMDA), the programme accredits promising Singapore-based innovative technology product companies with the aim of helping them gain more visibility from Government agencies and large enterprises. Anacle is the first IMDA-accredited company to be listed on a public stock exchange.
Mr Lau, now 43, decided to get accredited in February 2015 as he felt it was a validation of the company's technical capabilities and the merits of their product.
Accreditation also gave Anacle greater access to streamlined procurement via government agencies, and allowed them to feature in IMDA-organised seminars and shows to market their products. To obtain the accreditation, the company had to go through a due diligence process, which involved an evaluation of the company’s financials, operations and technical capabilities. The efforts paid off, as the improved internal processes and documentation helped shave three to four months off the IPO process – a period which would have cost him some S$1million more.
This is because listing on the Hong Kong Stock Exchange required paperwork that was similar to the ones submitted to IMDA. Prior to that, IMDA also opened plenty of doors for the company, especially when it came to Government agencies. The company plans to use the IPO proceeds to invest in R&D as well as expand into Hong Kong, China and the Middle East.
KEEPING A LID ON ENERGY COSTS
Anacle was formed in 2006 after Mr Lau realised the need to address a “big and pressing problem” – energy management. This is particularly true for ageing buildings, as it is costlier to install green solutions than to incorporate them from the start, he explained.
“There was a lot of feedback that whatever software we delivered to them to improve their operational efficiencies, (the savings) got wiped out if energy costs go up by one to two per cent,” said Mr Lau.
His company’s proprietary software products, Starlight, an IMDA-accredited energy management solution, and Simplicity, an enterprise application software solution, are his ways of tackling this issue – and at a lower cost to his consumers.
“We do have a technical advantage because we’re able to roll things out wirelessly in a reliable manner, so it’s a lot cheaper for customers to adopt our solutions than one of the major MNCs,” he said. “On average, our deployment cost against the big guys are between 40 to 50 per cent of their cost, so that’s quite significant.”
MAKING THE LEAP ABROAD
Mr Lau is now focused on expanding into China and the Middle East, and also plans to launch a range of new products. With more than 95 per cent of the firm’s revenue base still drawn from the Singapore market, the best way to grow the company is to internationalise, he said.
“Singapore, although it is a bigger market than what a lot of people think, is still not immune to macroeconomic risks,” he noted. Furthermore, Anacle is serving a niche market that has been largely under-addressed, so there is plenty of opportunity, especially in developed countries, he added.
Listing abroad is something he would recommend to other budding companies looking to secure more cash for expansion. Once a company has listed, customers gain more confidence and no longer worry so much about its financial standing, he said. “Things became a lot easier in many aspects after that.”