Singapore property and energy management systems startup Anacle Systems has filed for a listing on the Growth Enterprise Market (GEM), an exchange set up by the Hong Kong Stock Exchange (HKSE), to raise between S$13 million and S$17 million for business expansion.
Trading on Anacle, which was founded in 2006, is expected to begin on December 16. About 100 million shares will be placed with prices between 71 Hong Kong cents and 91 Hong Kong cents. Its market capitalisation after listing will be between S$52 million and S$68 million.
Anacle’s listing is the latest success for local startups. A public listing or an acquisition is seen as a success because it brings financial gain for all the hard work put in to develop the company.
It is also a thumbs up for local venture capital firm iGlobe Partners, the company’s biggest shareholder. It first invested S$1 million in Anacle in 2011.
It then invested another S$1 million in 2013, when Anacle raised S$5 million in a funding round led by local venture capitalist firm Majuven. Industry observers believe investors would receive three times what they had invested in the company.
iGlobe’s other startups which had exited include semiconductor company Celestry, which was sold to Cadence Design Systems in 2003, and telecom company Kilopass, which was acquired by private investment company LDV Partners in 2015.
Anacle founder and chief executive Alex Lau said the company will use the capital raised from the IPO to finance its business expansion in China, Hong Kong and South Korea as well as the Middle East. The company will double its current 100-strong staff, adding more engineers and sales and marketing hires.
The listing exercise began in April 2016 for the 10-year-old company. It was more expensive and the financial checks to list in Hong Kong were very thorough, he said. It also cost more at S$4 million.
So instead of Singapore, Anacle decided to go ahead with Hong Kong because a listing there would offer more publicity and give it better access to the larger number of investors and fund managers based there.
Besides, the upgrade path to the main Hong Kong Stock Exchange is also faster, Lau noted. That’s in the next one to two years compared to at least five years in Singapore, he added.
“We’ll also have to show a profit of S$30 million in the last financial year. This means we must at least have $100 million revenue to get this profit. This is tough for small companies.”
He hopes the IPO will publicise the company’s capabilities regionally. Complementing the IPO will be a major branding exercise to strengthen the company’s reputation, products and capabilities, he added.
Anacle has two key products, a property management system and an energy management system. Most of its customers are A-listers like Singapore Airlines, CapitaLand and Mapletree and public sector agencies like the Singapore Ministries of Health and Education which use the software to manage hospitals and schools.
Anacle has also been successful in Malaysia, Taiwan and the Middle East. Its competitors are mostly multinational corporations such as SAP, Schneider Electric and Seimens.
In property management, Anacle’s software covers the entire range of asset management needed by building owners from tenancy and supply chain management to customer relationship and financial management. Its intimate understanding of the Asian real estate market is its key advantage.
“The Asian market is more sophisticated than in the Americas. Our software, for example, automatically manages the landlord-tenant revenue share apart from the monthly rental. This isn’t available in our competitors’ products,” said Lau.
In energy management, customers get an overview of their energy consumption, power quality and carbon footprint profiles. Its sensors collect information which are wirelessly sent to a central dashboard which lets building owners monitor energy usage and wastage.
“Our focus is on retrofitting older buildings without having to lay a single cable because we use wireless communications. Our installation cost is one-third that of our competitors,” said Lau.
He added that it saw existing buildings as an under-served market. It invested in research and development to develop its energy management software.
“It was tough, it took us five years to develop this software, and another two years for us to break into the market. We introduced the energy management product in 2011 and it has taken off.”
Grace Chng is a veteran IT writer.
CLARIFICATION at 21/12/2016 11:27am: In the original version of the story, Anacle said it was placing 100 million shares between 71 Singapore cents and 91 Singapore cents. Anacle has clarified that the shares were placed between 71 Hong Kong cents and 91 Hong Kong cents.