Fatfish swims in li’l Singapore’s big pond
By Karamjit Singh August 5, 2013
- Malaysian founders feel better opportunities in Singapore
- Adopting co-entrepreneur model to add value to investee companies
LAU Kin Wai (pic) was part of the small group of early Internet startups which managed to defy the dotcom bust to eventually list publicly.
In Lau’s case, he had to overcome the double-whammy hit of the telco bust in 2002, before going on to list his telco-related startup Viztel on the Malaysian stock exchange in 2004.
He and three other engineers had launched Viztel Solutions in 1999 after returning from their studies in the United Kingdom.
He did not have things easy though upon listing, as the company incurred losses in both 2004 and 2005 before Lau and his cofounders left in late 2006 after a hostile takeover.
He then emerged in 2008 as founder of stem-cell based Cellsafe International Group, which has offices in Jakarta and Kuala Lumpur.
One of the things Lau observed throughout his entrepreneurial career was how tough the environment was in terms of raising meaningful money for a technology business.
He feels this had not changed in the decade since. Granted his startup was not ‘sexy’ in the dotcom sense – it built telephony products for the telco space.
Feeling this about the funding situation in Malaysia, and having some spare cash in hand, the obvious next step would have been to become in investor himself and help plug that gap.
And that’s what he did – but, in Singapore.
Deciding to take the path of least resistance, he established the Fatfish Group in 2010 with S$500,000 [figure corrected] in funding from him and his eight co-investors. Six of them are active, while the other two are passive.
Lau describes it as a South-East Asia-based venture group that has businesses across the Internet, biotech and entertainment sectors.
“I felt then that Singapore was more vibrant, with a lot of support from the Government for technology-based businesses,” he tells Digital News Asia (DNA).
“They even have funding for students from age 17 onwards. So I thought that was where I should build my venture business from,” he adds.
The decision has proven to be a good one for him as in 2011, after a tough four-month selection process, Fatfish was appointed as an official incubator for the i.Jam Reload programme of the Media Development Authority (MDA) of Singapore.
This is a government-funded scheme assisting Singapore-based startups. Fatfish administers the programme in cooperation with the MDA.
There are two tiers of funding here, with MDA handling S$50,000 investments on its own while going in on a 50:50 basis with Fatfish for S$200,000 investments. One condition for i.Jam is that the headquarters have to be in Singapore and the money spent there.
As to how a Malaysian-owned fund can have access to Singapore tax-payers’ funds, Lau says as long as the company is incorporated in Singapore and its principals are based in Singapore, that is good enough.
This year Lau is particularly excited about the establishment of Fatfish Internet with S$300,000 raised and with its focus on the mobile and e-commerce space.
“It is more of idea lab where we seed an entrepreneur at a very early stage. We actually [describe this model as] ‘co-entrepreneurship,’ as we augment the current team in place and help them build business value.”
Lau and his team bring a regional business building capability and knowledge to the table. For instance, in one of the startups, they are helping the founding team navigate its regional challenges.
Asked what he notices different from the current batch of entrepreneurs versus those from the early 2000 period, and Lau responds that passion seems to be a key differentiator.
“We used to put in 150% effort to get something working back then. But at the same time, the current batch is savvier than we were about the role of funding and exits,” he says.
One thing that has not changed is how tough it is to build a business. “Starting up costs may be lower, but I think this is negated by the higher salaries people demand, plus how hard it is to just get good talent,” he says.
It is due to these reasons that Lau also does not agree with the generally held belief that there has never been a better time to launch a tech business. “The biggest challenge startups face too is that big companies like Google will get into any area they think they can make money in.
So, are you ready to compete when this happens,” he says.
Next: Who Fatfish has invested in and why
Is Malaysia ‘losing out’ to Singapore?
Disrupt: ‘It’s hard to raise money in Malaysia’
Week in Review: Tip my turban to Singapore’s startups
Cradle’s pre-seeded Tribehired gets seed investment in Singapore