Starting a fin-tech company anywhere is a challenge without having to balance developing economies with strong investor interest.
Yet that is the environment ApexPeak finds itself in.
Based in Singapore, the provider of faster, working-capital, solutions for mid-market and high-growth companies works with clients throughout emerging markets in Asia and Africa.
ApexPeak offers a combination of traditional trade- and receivables-financing along with sector-specific solutions for B2B marketplaces and the entertainment and media industries.
CEO Gakim Solomons said the business started to take shape three years ago, when he and a friend were working in finance and noticed the growth of sites like Kabbage and Lending Club.
“They prompted us to take a serious look at the huge opportunity of providing access to short-term working capital,” Mr. Solomons said.
Working in Asia and Africa provided additional challenges, Mr. Solomons discovered. Chief among them was balancing loan originations in developing economies with the solid level of interest from investors.
ApexPeak decided to start out small with a presence in Africa. As it began to grow and the need to scale became more urgent, it was faced with some important decisions.
“We knew developing markets, but more from a financial angle than a technological one,” Mr. Solomons explained.
To increase their technological capability, ApexPeak acquired a pair of companies.
In early 2015 they bought Cashnomix of Dubai, a proprietary, cloud-based, credit-scoring, engine that indicates success or failure as the most important criteria for approving a deal.
In July it added ASYX, a secure, web-based, supply chain finance platform from the Netherlands. In addition to technology, ApexPeak gained access to ASYX’s growing client base in 12 countries.
“The 18,000 suppliers allows us to lower the cost of originations while maintaining a steady stream of activity,” Mr. Solomons said.
Singapore has been a good place to grow ApexPeak, Mr. Solomons says, citing the positive business climate, developed government and solid foundation for companies wanting to set up and seek business capital. Local funding opportunities range from seed rounds to Series B.
Companies looking for later rounds have to turn to other markets.”Capital formation is only beginning in the venture space,” Mr. Solomons explained.
The emerging knowledge level informs his presentation when meeting with potential investors and partner companies.”People only buy risk and innovation they understand,” Mr. Solomons said.
That’s why patience is a cornerstone of his strategy. Mr. Solomons clearly recognizes he is an early entrant in rapidly developing markets and needs to wait as those markets develop the resources and infrastructure required by mature economies capable of supporting a vibrant fintech sector.
“Outside of China and India, there is a Series A or B funding gap throughout Southeast Asia.”
Indonesia and Vietnam have plenty of potential, he added, noting ApexPeak has a significant development team in Jakarta.
Mr. Solomons knows ApexPeak has a “huge” opportunity to help develop the region’s funding environment. There will be many components to that, including strategic partnerships with investors and clients.
One important element will be attracting top talent to the sector, Mr. Solomons said. Some of that will come from the banking sector, while others will have a technology background.
“The challenge will be to find those who are able to think in both worlds.”