Tech companies may not feature prominently on the Singapore Exchange (SGX) but one company is confident it can do well here.
Deskera Holdings chief executive Shashank Dixit is aiming for a listing on the Catalist in this quarter. The firm has already raised about $16 million in pre-initial public offering (pre-IPO) funds.
It was seeking to raise $2.5 million to $5 million in a pre-IPO funding round before it lodged its offer document, but investors were interested in investing close to $30 million.
Eventually, Deskera accepted about $16 million.
While tech companies are normally thought of as providing e-mail and social media platforms, Deskera caters to businesses, providing cloud-based software that supports tasks like enterprise resource planning and customer relationship management.
Deskera customers can use applications offered over a network and pay for only what they use.
It wants to list here to build credibility with its customer base, even though it might get a higher valuation listing on the Nasdaq, Mr Dixit said. "Singapore is where my customers are. If I sell to a customer in Malaysia and I tell them I'm listed in Nasdaq, nobody will care.
"If I sell to a customer in Singapore and tell them I'm listed on Singapore Exchange, they'd love it," he added.
Singapore accounts for 20 per cent of Deskera's customers, while the rest are across Asia. Deskera also focuses on Indonesia, Malaysia and India.
Most of the IPO proceeds will go into improving hardware infrastructure, Mr Dixit said. The company's key focus is growing sales in Thailand, Malaysia and Indonesia.
According to a Frost and Sullivan report on technology trends, cloud services are estimated to have grown by 38.4 per cent in 2013 to be worth more than US$50 billion (S$71 billion) globally in 2014. The cloud-services applications space was a "highly fragmented" one, with thousands of players, it added.
Deskera said its edge over peers was that its systems have been built to cater to the tax and financial needs of Asian companies. When asked if Deskera had considered seeking funding from venture capitalists, Mr Dixit said these investors were more keen on consumer-serving tech companies as opposed to enterprise-serving ones.
Tech companies offering consumer services through means like applications and e-commerce tend to generate returns in two to three years. Those serving enterprises take a longer time, he added. But some venture capitalists have invested in Deskera, he said.
The company made $2.5 million net profit in 2014 and $3.1 million in the first half of last year. Revenue in 2014 was $14.4 million and $16.3 million for the first six months last year.
This article was first published on January 6, 2016.
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