DisruptInvest Summit 2023: Respond.io and Lapasar demonstrate value of getting the business and team right

  • While type of business impacts valuation, one also needs to 'earn' their valuation
  • Lapasar proves Malaysia not too small, possible to buld large, profitable business 

(L2R): Anwar Jumabhoy with Gerardo Salandra, CEO and founder of Respond.io, Noomi Fessler, CFO of Lapasar and Paramjit Singh, Chief Investment Officer of Mavcap.

I recently moderated a session at the DisruptInvest Summit 2023, held in Kuala Lumpur in March. 

My panellists were; Gerardo Salandra, CEO and founder of Respond.io, which is a WhatsApp conversational software company. Founded in Hong Kong, they moved to Kuala Lumpur before the pandemic. They first raised a seed round of US$250,000 and went on to do three rounds, raising a total of US$10 million. The last one was a US$7 million round in December 2022.

Noomi Fessler, who was part of the Nexea team (hosts of this conference together with Digital News Asia) but joined Lapasar at the time of their first raise in 2018. She is now the CFO of the company. Lapasar first raised a seed round of RM50,000, followed by five more rounds, raising over RM25 million in total. The most recent RM15 million was in December 2022.

We were also joined by Paramjit Singh, Chief Investment Officer of Malaysia  Venture Capital Management Bhd.

This session provided some valuable takeaways for the audience who were mainly startup founders and early-stage investors. Plus, Gerardo and Noomi were super open and willing to share their funding journeys which had many commonalities, despite the businesses being quite different.

We started with the “elephant in the room” question – did you get the valuation you asked for? Both of them replied YES – every single time. Gerardo even remarked that he got a slightly higher valuation! So put that to bed. 

If you get the business and team right, when in front of the “right investor” the discussion is not about the valuation. This is from two seasoned “fundraisers” who did multiple rounds from 2018 to 2022. Yes, they were the tech-boom years, which we see now in the rear-view mirror. 

These are the other nuggets that I thought were of interest:

  • Expect multiple funding rounds: Gerardo talked about “earning your valuation”. What does that mean? After you raise the money you need to rapidly grow your company – revenues or profits, so that the valuation becomes reasonable. In the case of Respond.io, their revenue in 2022, grew by almost 6x, thereby making the 25x revenue multiple valuation look reasonable. And today, they have more than US$7. 5 million cash sitting in the bank, demonstrating an old truth about raising funding – best to raise money when you don’t need it!


  • The type of business impacts the valuation: Software businesses, like Respond.io, command a much higher valuation because of the “stickiness” of their offering. They enjoy higher customer retention and recurring revenue and therefore have a higher “customer lifetime value”. Valuations can range from 5 – 15x revenues. Paramjit mentioned that in contrast to trading or e-commerce companies that are valued at 0.8-1.5x multiple of their annual gross merchandise value (GMV). This was the case for Lapasar.  It might seem strange, but the amount of raise also impacts the valuation as investors don’t want to unreasonably dilute founders - Raise a big number and your valuation needs to be an even bigger multiple!


  • The size of the market has an impact on valuation: That’s obvious. More customers means more revenue, which leads to higher valuations. Gerardo explained they are a global company with +10,000 customers from 86 countries. For him, the best investors measure the “burn multiplier” – how much are you investing in the business for each dollar of revenue growth. Lapasar, Noomi explained, is also watching all the performance metrics to get to profitability. A few years ago investors were excited about companies going regional because the perception was the Malaysian market was too small. Having doubled revenues, Lapasar has shown that it is possible to build a large and profitable company with an “only Malaysia” business.

Investor money is not sentimental, it chases the best return. The challenge for founders is to put the “right opportunity” in front of the “right investor”. 

Gerardo revealed that at the early stage, they turned down Alibaba Group because they felt they were too small for a “corporate investor”. When word of this got out, there was a rush of Angel investors knocking on their doors - so it worked out well. He would rather have a realistic investor, who looks at their “burn ratio” to build the future, rather than one that “dreams the future”. The latter often has unrealistic growth expectations putting immense pressure on the founders.

While money is not sentimental, it is emotional. The recent tech valuation falls have moved investors from FOMO (Fear Of Missing Out) to JOMO (Joy Of Missing Out). I expect interest in tech investing to be back by the last quarter of 2023.


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