”As an M&A analyst, I was appalled at how manual the deal sourcing process was. Everyone simply accepted that this was how the industry had always operated, and to me that was ridiculous”
Wong Zi En believes that there are always better solutions to a problem that has been solved. It simply not about settling for the status quo because everyone accepts it and is about being creative. This is why she left a successful career at Stirling Coleman Capital to start Dtecq, an online marketplace to help corporate investors and tech companies discover their best strategic matches.
As Founder and CEO of the startup, ZI En aims to make the search for that right tech opportunity or strategic investor less painful and more effective.
e27 speaks to Zi En to know more about her, Dtec and the trends in the M&A space.
Here are the edited excerpts:
In your previous position as VP (M&A) at Stirling Coleman Capital, what M&A trends have you observed with regards to tech companies and what verticals are they usually concentrated on?
I was previously working on conventional M&A deals where the objectives of the acquisition were mainly for revenue synergies, market share, and cost consolidations. Those deals are still important, but the current wave of digital transformation where conventional business models are being disrupted has brought about a new focus for M&A across all industries; the potential to transform their business model.
Acquirers are increasingly pursuing strategic targets that they can leverage to adopt new business models, build new offerings, and unlock growth outside their core businesses.
What are the checklist a startup should tick off before seeking out a strategic investors?
There is no checklist, but there are two things that startups can do to significantly increase their chances of success.
1- Study your potential investors the way you study your users: Understand your potential investor’s business, industry, offerings, competitors, and corporate goals. For public listed companies, investor presentations and annual reports are a good source of information. With that information in hand, think of how your startup can help the corporate achieve its goals.
2- Think out of the box: Sometimes the best door into a corporate is the one that no one else considers. Pretend you are a fitness tech company. Your first instinct would be to approach the HR department, and so would many other wellness companies. But a more effective way would be to approach the head of sales.
Research shows that happy, healthy employees lead to a 37 per cent increase in sales. A statistic that the head of sales would be very delighted to hear
Decision-makers exist all throughout corporations. Find creative points of entry and you can often rise above the noise
What should startups be aware of if they wish to get acquired? Which metrics are valued more — revenue or traction?
Corporates look at startups very differently from VCs. They aren’t looking for the next unicorn, but for targets that will help them compete with or even beat those unicorns. Therefore the metrics for evaluating an acquisition are more than just revenue or users, and what they are varies for from corporate to corporate.
As I mentioned earlier, study potential investors the way you study your users. That will help you find out what makes them tick.
Why did you switch from the corporate world to launch your own fintech startup? Were there some things you had to unlearn in order to transition into a “lean startup” mode or was your prior corporate experience helpful?
I dislike settling for the status quo just because “This is the way it has always been”. As an M&A analyst, I was appalled at how manual the deal sourcing process was. Everyone simply accepted that this was how the industry had always operated, and to me that was ridiculous.
When I came into the tech world, I realised corporates and startups are also manually looking for each other. And that’s how Detecq came about.
I believe that there are always better solutions to a problem that has been solved. It’s simply about not settling for the status quo because everyone accepts it, and being creative.
It was in my previous job where I got the idea for Detecq because I experienced first hand the problem of manually sourcing for deals. So I would say it was very helpful. That aside, working in M&A gave me exposure to corporate strategy even at a very junior level.
With acquisitions and IPOs, you get to work directly with CEOs and CFOs. The job also taught me to deliver under pressure and gave me the skills to deal with high-level corporate executives.
Bonus question: As a Pilates instructor, how does it help you in running your startup?
Pilates helps me de-stress and allows me to step away momentarily from the busyness of building Detecq. It is my therapy and I always come back to Detecq re-energised and raring to go again.
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