Digerati50: From a Malaysian ‘garage’ to London’s AIM

Digital News Asia (DNA) continues a weekly series that profiles the top 50 influencers, movers and shakers who are helping shape Malaysia’s Digital Economy. These articles are from Digerati50, a special print publication released in January 2014. For information on customised reprints of Digerati50, email [email protected].

• Public-listed cloud computing and software multinational ‘born’ in a rented room
• ‘There were some who were nice, while others treated me nastily …’

THE technology world is full with stories of how billionaires had their humble beginnings in their parents’ garages or dorm rooms – from Dave Hewlett and Bill Packard of HP fame, and the late Steve Jobs of Apple; to Mark Zuckerberg of Facebook, and Larry Page and Sergei Brin of Google.
 
Malaysia too has its fair share of success stories of local entrepreneurs who have grown their business from scratch and into a sizeable force.
 
One name that comes to mind is Raymond Chee (pic) of Rapid Cloud International (RCI) Plc. The Kuantan native is the majority shareholder of the cloud computing and software company he cofounded in 1999, now listed on London’s Alternate Investment Market (AIM).
 
Raymond says he first got the entrepreneurial bite when he was studying at University Putra Malaysia (UPM) in Penang.
 
“I remember setting up my webhosting business in my ‘garage,’ a rented room where I stayed while studying for my Masters in Science in Computing and Communication Engineering in 1999,” he says.
 
Armed with nothing but pure grit and a paltry sum of RM2,700 (US$808 at current rates), he literally went door-to-door trying to convince businesses to take up his hosting services.
 
“I printed pamphlets about my services and went from one business to another trying to convince them to sign up with me. There were some who were nice, while others treated me nastily. It was a humbling experience, but I learnt a lot about how to become streetwise in my dealings with people.”
 
Fourteen years later, Raymond now owns four companies under the RCI umbrella and claims to have a base of over 37,000 customers, including small and medium enterprises (SMEs), government agencies, multinational corporations and large enterprises.
 
His company provides a range of proprietary products, including core software and web services, e-commerce products and cloud computing services.
 
For its 2012 financial year, RCI recorded an EBITDA (earnings before income, taxation, depreciation and amortisation) of RM4.3 million on the back of RM9.4 million in revenue, and its income as a percentage of sales grew from 5% in 2010 to 39% in 2012, according to company filings. [RM1 = US$0.31]
 
Updated financials: In its unaudited results for the fiscal year ended Dec 31, 2013, it reported revenue increased by 21% to RM11.34 million; gross profit increased by 32% to RM8.46 million from RM6.38 million; gross margin increased to 75% from 68% in 2012; and profit after tax increased by 18% to RM4.3 million from 2012’s RM3.65 million, after adding back exceptional costs of RM1.78 million related to its initial public offering on AIM.
 
So how does Raymond feel about his entrepreneurial journey so far?
 
“The webhosting industry itself has become extremely saturated and is now a commodity business, and as such, the industry is no longer relevant by itself.
 
“Thankfully, we realised this back in 2003, and started focussing on becoming a total web-solutions provider, complete with our own software development team and research department,” he says.
 
Things however haven’t been always smooth for Raymond, as he has learnt over the years how tough being an entrepreneur can be.
 
“When I first started the business 14 years ago, I was extremely naïve, and being extremely passionate about the business, I didn’t do enough planning and strategising. There are times we expected business to go one way but it didn’t, and that was extremely demoralising.
 
“If I were to do it all over again, I’d like to have someone who would have warned me about this brutal truth, and I would have done it differently, probably changing my growth strategy earlier,” he says.
 
Still, Raymond is optimistic that his experiences have led him to become a better businessman, noting that the most important trait an entrepreneur must have is flexibility.
 
“The essence of true entrepreneurship is that one must be flexible enough to adapt, evolve and choose alternative paths in order to be able to grow the business.
 
“That’s what we’ve been able to do and our listing proves this point. We can now grow our businesses regionally and take our business to the next level,” he adds.