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Startup Funding

Invoice Discounting Startup, ApexPeak – Raises 2.3M SGD in Seed Round!

Invoice Discounting startup

Invoice Discounting startup, ApexPeak, Raises 2.3M SGD in Seed Round

After only 7 months of offering invoice discounting services in Singapore and South Africa, ApexPeak has secured $2.3M SGD in their combined seed and convertible note round.

In a nutshell, invoice discounting is the sale of a business’ invoices to a third party. The third party is charged with processing the invoices, and the business lending the invoices is able to receive funds earlier based on the expected payments on the invoices. While this is nothing new, ApexPeak has managed to reinvent this financial instrument to be ready for the digital age.

To date, ApexPeak has already turned a neat profit with a zero default rate on funds dispersed. This type of performance in such a short time is unheard of in the startup or financial world.

“Robust vetting and process combined with automating standardised tasks and good risk management have contributed in making ApexPeak successful,” says Gakim Solomons, CEO and Co-founder of ApexPeak.”

Unlike traditional financing options, ApexPeak helps small and mid-sized enterprises (SMEs) turn invoices into cash in as little as 5 days. SMEs gain fast and affordable access to working capital. Up to 80% of the invoice amount is advanced upfront; the remaining 20% is dispersed when the invoice is processed with a 2% discount fee levied. Finally, insurance companies cover the counter party risk of these invoices so it is essentially risk-free.

While it sounds simple, there is also little to no competition in this space because it requires the right combination of technology, talent, experience and opportunity to create ApexPeak. After 10 years in private equity, Solomons linked up with college friend and serial technopreneur, John Fearon, to utilize their natural synergy in coming up with a financial technology business.

invoice discountingAfter an initial unsuccessful dabble in peer-to-peer foreign exchange, it occurred to them that the SMEs loans market is under-served. SMEs often suffer cash flow problems and without liquidity, many have been forced to shut down like Silicon-Valley based Singaporean startup, Chalkboard. Traditional banks require extensive paperwork and lengthy periods to evaluate risk while SME funds dry up.

Solomons and Fearon were particularly interested in the growing SME loans markets of Africa and South East Asia. ApexPeak managed to obtain an exemption from the Regulatory Authorities in Singapore and South Africa in order to operate its business.

With the business idea and legal documents ready, it was a whirlwind couple of months for the business. Joining the Google-backed accelerator in South Africa, 88mph, ApexPeak built a simple and elegant website for invoice discounting to go digital. The risk-free nature of the business and ease of use of the website, allowed Solomons and Fearon to raise $800k SGD even before Demo Day.

In fact, after that, business was picking up so fast strictly through the word-of-mouth that Solomons avoided all forms of marketing to ensure they will not be overwhelmed. Within 4 months of operation, ApexPeak had broken even and was looking for $2M SGD to expand faster.

invoice discountingJust like its SME customers, ApexPeak could not wait for the typical 3 to 6 month wait for funding from traditional sources. In Singapore, with Fearon’s extensive contacts, risk-seeking angel investors were given a chance to take a stake in the convertible round. In a mere 3 months, the business surpassed its goal to reach $2.3M SGD, making one of the biggest pre-Series A rounds in the region.

“A low interest rate environment in Asia has resulted in many investors looking for good risk adjusted returns. ApexPeak has been able to raise money from investors by offering investors the opportunity to obtain above average yields with no downside really,” says Solomons.

Not resting on their laurels, ApexPeak will continue to move at break-neck speed. Given the capital-intensive nature of the business, ApexPeak is looking at raising more money in order to help more SMEs in Asia and South East Asia grow their businesses.

How Nick D’Aloisio made his $30 Million

What’s he doing with $30 million? As Nick D’Aloisio says, “I can’t even buy a car because I don’t have a licence yet.” So he’s going to buy a new bag. Why? “Mine is broken; it’s old and the strap’s not working.”

Recently, Yahoo bought 17 year old Nick D’Aloisio’s iPhone app, Summly, for $30 million. When Yahoo was founded in 1994, Nick wasn’t even born yet.

Nick D'Aloisio
Photo Credit: Kmeron


3 STEPS ON HOW NICK D’ALOISIO GET TO $30 MILLION

Nick’s app has delivered over 90 million news summaries in the four short months since he launched it on his 17th birthday in November. But Nick isn’t even old enough to be a Director of his company, so his mum is the Director while he sits in as Company Secretary.

What has gotten Nick D’Aloisio to success so quickly in 15 months when so many of us are still struggling after 15 years? Here’s 3 steps his journey has in common with most super-success stories:

 

PROBLEM + PASSION = $300K SOLUTION

Nick’s Summly App was the solution to a real world problem that no one else was solving well. As Nick relates, “I was 15 years old and I was revising for some kind of history exam. The problem was I was trying to find information that was useful to me.”

Searching Google on his phone didn’t give him enough detail to know what was or wasn’t a useful link. So he put his own iPhone app together. The app quickly rose up the download ranks and Apple featured it in their store.

Then came a fateful email: “About a month later, the private fund of the Hong Kong billionaire Li Ka Shing cold emailed me and expressed an interest to invest, but they didn’t realize I was 15…It turned out that they actually liked my age because it demonstrated I was net-native, so I’d only grown up with the Internet. They flew to London about a month later and invested $300,000. That kick-started this whole journey.”

 

$300K FUNDING + EXPERTISE = $1.3M REPUTATION

Nick D’Aloisio used the money to bring in world experts to help relaunch the app. At 16 years old, he teamed up with the leaders in Natural Language Processing, Stanford Research Institute (Who create Apple’s SIRI – named after the company’s initials, SRI).

In between high school classes in London, Nick worked with SRI in the US by phone and text messages to build the new app. SRI’s solid reputation and Nick’s focus on approaching well known celebrities to help him attracted high profile investors Stephen Fry, Ashton Kutcher and Yoko Ono who invested $1.3 million. Nick made the most of his investors, with Stephen Fry starring in the launch video for Summly.

 

$1.3M REPUTATION + SINGLE-MINDED FOCUS = $30M STORY

With world class partners and world class investors, Nick D’Aloisio gave up full-time school at the end of 2011, with his parent’s blessing: ““I talked about it with them and my headmaster and we decided it was a once-in-a-lifetime opportunity and it would be silly not to run with it. Now, looking back, I can say it was a massive gamble. But it was a good gamble.”

From a standing start to $30 million, Nick has taken the age old 1-2-3 formula of solving a problem in a smart way, then using the resources he attracts to bring in the best talent, and leveraging that to attract the most influential partners.

What made him think he could just go and knock on the door of the best companies and most well known people in the world? As he says “I was naive. I didn’t know I couldn’t.”

Nick D’Aloisio is now reflecting on this week’s news: “Numbing is probably the best word to describe it. It’s a shock to be honest. The only thing I can take from this is that I’m genuinely kind of proud that I’ve been getting a lot of tweets where young people are commenting and saying, “This is really inspirational, I want to go and start my own thing.”

How many of these 3 steps in the 1-2-3 formula have you taken in your business? What can you do to upgrade your product, your talent or your partners?

Or maybe it’s time to be a kid again, be naive again, when you didn’t know you couldn’t. And start something entirely new.

Entrepreneurs and Startups in Malaysia to Benefit from new Silicon Valley’s BootstrapLabs Launch

Silicon Valley-based BootstrapLabs, and Malaysia-based MAD Incubator today announce the formation of BootstrapAccelerator Asia. This will form the first Southeast Asia-focused Tech Startup Accelerator with a Silicon Valley Fast Track™ for promising Startups in Malaysia, with opportunities to gain access to incubation opportunities, funding and networking for business growth. Continue reading Entrepreneurs and Startups in Malaysia to Benefit from new Silicon Valley’s BootstrapLabs Launch