#Asia From Singapore to China to IPO


Calvin Cheng. Photo credit: Retech.

Calvin Cheng has taken an unusual path. This time a decade ago, he was an executive in the modelling industry in his native Singapore. A few years later, he set up his own company in China. Today he’s taking that to IPO.

“I was never in the modelling industry – that’s an urban myth,” quips Cheng, 41.

“After the dot-com bust, I approached Elite Models for the master license for their agencies and their trademark, Elite Models contest. As the head of Elite Models for Asia, I was in charge of the franchise system – selling franchises across Asia to set up new Elite agencies as well as to companies interested in organizing the contest. I was also managing existing franchises. I set up a total of 10 franchises across Asia. I was thus in the licensing business – the models were just a perk,” he says.

Upon leaving Elite in 2005, he decided to juggle a diverse bunch of franchise businesses, covering luxury events, media, and model and talent management.

It was the talent management franchise that took him to China in 2011 – but he soon had second thoughts.

“I soon found that [it] was not scalable and niche,” Cheng tells Tech in Asia. “I thus pivoted the China business into a soft-skills corporate training company.” It soon found some major local clients, such as telco China Unicom.

He later put a tech twist on that business by merging it with a Chinese firm in order to focus on digitizing and “gamifying” those training programs. Now called Retech, the e-learning system is used by staffers at giants like Mercedes Benz, McDonalds, and Bank of China.

The next milestone on his unusual path is an IPO. Cheng is in Australia right now for Retech’s debut this morning on the Australian Stock Exchange with a valuation of just over US$80 million.

Next level

“Our profits are doubling every year and it was time to take it to the next level,” says Cheng of the IPO. “For example, we need to raise money to acquire [intellectual property] internationally. Easier to do it as a listed company. We would also be invited to pitch for larger projects as a listed company.”

McDonalds, fast food

A McDonald’s worker in Shenzhen, China. Photo credit: TEA / 123RF.

His firm last year clocked US$4.9 million in profit, according to its IPO prospectus.

“Australia’s second largest export is training and education,” he adds, explaining his choice of location for the listing. “There are a lot of strategic partnerships we can make there. Also, ASX has a good tech IPO ecosystem. This does not exist in Singapore and we are too small for Hong Kong’s main board.”

The fresh funds – about US$13.5 million – will also help with pursuing big firms around the world to use Retech to digitize and tidy up their training programs.

China challenge

Despite many years outside Singapore, Cheng is fairly well-known in the country for serial entrepreneurship, frequent comments on Facebook about politics, as well as for his stint as a Nominated Member of Parliament, an unelected position appointed by the President. In 2015 he proved to be a polarizing figure when he appeared to advocate, in a Facebook comment, killing the children of terrorists “in case they grow up to take revenge.” He later apologized.

Shanghai, skyscraper

Cheng’s firm is based in Shanghai. Photo credit: hxdyl / 123RF.

With the Shanghai-based business fairly well established, Cheng now has more freedom to pop back to Singapore – but that wasn’t the case in the early days.

“In the beginning, I had to base myself in China. There is no choice. If you want to start an operations overseas, you can’t do it by remote,” he states.

He says China “was a very steep learning curve” for him – a place where he “had no connections” and therefore “had to start from scratch.”

“Also, in China, things are not as orderly as in Singapore,” he explains. “One cannot wait for contracts to be signed, take time for due diligence, etc., before one makes a business decision. One needs to work with ambiguity. Contracts are a start point for negotiations, not an end point. Relationships have to be nurtured and built. Actually, Singapore is an anomaly in the region. Nowhere else do things work in an orderly fashion.”

After two exits during his franchise years in Singapore, this is his first IPO as a co-founder.

“The lesson is always the same,” he says by way of advice to other entrepreneurs. “Persevere and pivot, pivot and persevere. There is no other formula.”

Converted from Australian dollars. US$1 = A$1.32.

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