Village does MSC proud
Cyber Village, led by Tony Pua, eschewed a high-profile Internet
image, choosing instead the slow train to success. Today, it
is about to reap the rewards.
The Edge Daily (July 20 2001)
By Mary Anne Tan
Village (www.cyber-village.net), led by the unassuming Tony
Pua Kiam Wee, has shown that you don't have to be loud, have
a strong public image of your brand or be PR-savvy to succeed
in the New Economy. Unlike some Internet-related businesses
and Multimedia Super Corridor (MSC)-status companies that
have been courting the limelight to brand themselves like
Catcha.com, or to get venture capitalist attention like Go2020.com,
Cyber Village has shunned the limelight.
Instead, the e-business consultant, which obtained MSC status
on Jan 10 last year, has quietly gone about its business of
assisting other companies to fully embrace the dotcom revolution.
The approach has worked very well. Come July, Cyber Village's
cloak of anonymity will be stripped for good - it will have
beaten all other MSC-status companies to the initial public
offering (IPO) listing post.
even more interesting is that it will be the first MSC-status
firm to go the IPO route on a foreign stock exchange. Cyber
Village is awaiting the nod from the Singapore authorities
to list on the Stock Exchange of Singapore Dealing and Automated
Quotation System (Sesdaq), making it the first Malaysian Internet
start-up to earn that singular honour.
Local search engine turned new media company Catcha.com, which
spent millions building its brand, almost made it in April
2000 but had to scuttle the plan when the investing environment
turned sour. Virtual mall builder Go2020 - the one-time darling
of the Multimedia Development Corporation (MDC) - received
the most hype, offered the most hope and got RM3.5 million
in funds from MSC Venture Corporation (MSCVC), but failed
to stay the course. Cyber Village, on the other hand, didn't
burn millions nor was it the "pet" of MDC officials.
fact, MSCVC gave it scant attention when Cyber Village approached
it for funding in 1999, exactly two months after MSCVC went
fully operational. Recalling that experience, Cyber Village
founder Pua pitched his start-up on two occasions to MSCVC,
which showed no interest in his company - thereby losing a
golden opportunity to invest in what may turn out to be a
substantial information technology (IT) winner. More so when
Go2020 is now defunct and another investee company, Cosmos
Discovery, which operates Octopus.com.my, recently downsized
its content team.
fund his push into the regional market, Pua looked for funds
in January 1999 and attracted the attention of angel investor
Yap Yok Foo (the father of a friend), who pumped in RM50,000
and owns 3.87 per cent, of Cyber Village. Then Asian Venture
Fund Ltd, managed by Japan Asia Investment Corporation (JAIC)
stepped in at the end of 1999 with a US$1 million investment
for a 22.07 per cent stake in Cyber Village.
small portion of the funds has been used to meet operational
requirements leaving the rest for expansion activities. Pua
holds a 32.01 per cent stake in Cyber Village. In February
this year, with the economic slowdown looming, Pua thought
it prudent to seek additional funding and tie up with a strategic
local partner to ensure Cyber Village will weather the expected
tough times. MCM.com Sdn Bhd, which has since been renamed
MCM Technologies Sdn Bhd, a subsidiary of Arab-Malaysian Corporation
Bhd and the largest shareholder in Arab Malaysian Holdings,
became its strategic investor, pumping in S$4.7 million for
a 10 per cent stake in Cyber Village.
admits that aside from the additional cash infusion, which
should act as a financial buffer, MCM.com's (its ultimate
controlling shareholder is Tan Sri Azman Hashim) close ties
with the Arab-Malaysian group leaves open the mouth-watering
potential for future e-business work.
a fillip to success-starved local dotcom scene
the Sesdaq listing, Cyber Village will stand alongside the
few Malaysian successes like JobStreet.com (which has yet
to be listed) in the local dotcom scene that's crying out
for more success stories. Pua, 29, who has been jetting to
and fro from Singapore where Cyber Village has a growing presence,
sees the listing as proof that Malaysian Internet companies
have what it takes to match their foreign counterparts.
says the impending listing should be seen as a feather in
the cap for MDC's efforts to promote the growth of Malaysian
IT firms, putting to rest the claim that MSC firms are going
nowhere. Obviously, one of the first questions firstname.lastname@example.org
asked was his rationale for listing on Sesdaq instead of the
Malaysian Exchange of Securities Dealing and Automated Quotations
(Mesdaq). Pua cited several factors.
critical reasons come to mind," he says. "First, foreign clients
are more inclined to do business with a Singapore listed company.
Second, IPOs are currently a hot item in Singapore so it's
a good time to capitalise whereas sentiment on Mesdaq is still
very weak with poor liquidity. Finally, there are restrictions
pertaining to the use of proceeds from a Mesdaq IPO.
isn't worried that Malaysian authorities might feel snubbed
by his Sesdaq listing although the bulk of his revenue comes
from Malaysia. "They should view this in a positive light.
It is something for them to be proud of, that at least one
MSC-status company has managed to beat the odds and proven
them right. And if I can do it, others can too. Personally,
for me, I wanted Cyber Village to be the first MSC company
to have its IPO on a foreign stock exchange and that itself
is an accomplishment." Cyber Village's authorised share capital
is S$100 million and the paid-up share capital is S$5.4 million.
net proceeds from the listing will be used for three purposes:
expansion in the form of investments or new acquisitions
of businesses that are synergistic with its line of e-business.
finance the development of Cyber Village's new Knowledge
Centre that will be located in its present office in Kuala
working capital and for capital expenditure to upgrade
infrastructure, among others.
says the listing is expected to be before the end of this
month. He views this momentous event as a "surprise" for he
had not seriously considered a listing until a Singapore merchant
banker told him that his company would be a shoo-in for listing
on the SGX-Sesdaq. The merchant banker was right.
story of Tony Pua
on the tough early years, Tony Pua says Cyber Village has
come a long way since its inauspicious beginnings in March
1997. The eldest son of poultry farmers from Batu Pahat, Johor,
Pua would have been expected to take over the family business
someday but his parents never put pressure on him, preferring
that he make his own way in life. Smart move.
did his secondary education in Singapore on an Asean scholarship
from the Singapore Education Ministry before going off to
the UK on a Malaysian Tobacco Corporation (MTC) scholarship
where he earned a second class (upper division) honours degree
in philosophy, politics and economics from Keble College,
when he returned home, he gravitated to the financial services
sector and opted to work for Andersen Consulting (now renamed
Accenture) as a consultant. "I was fascinated by the methodology
and integrating of technology and I have always believed that
technology was the way of the future and that it is the natural
way to progress. Number-crunching is what I enjoy most so
that's why I decided to work for Andersen Consulting," he
After two years, Pua decided to strike out on his own. Cyber
Village, which was just a germ of an idea, became a reality
after Pua realised there was a demand for e-business consultancy
when local firms began to entertain seriously the idea of
moving into the Internet and the e-commerce platform.
his combined savings and those of his parents amounting to
RM20,000 and another RM30,000 chipped in by three buddies,
he went ahead to open an office in Overseas Union Garden,
Old Klang Road, KL with only four staff. Typical of many entrepreneurs,
the trying early years saw him going for months without drawing
a salary and almost every sen he earned was poured back into
the fledgling business.
recalls how he practically lived on trains then for over two
years. He would take the night train to Singapore, arriving
there at about 7am and showing up for work at the Singapore
office at 9am. Then taking the train out at night and showing
up for work in the Malaysian office at 9am the following day!
A far cry from those character-shaping days, today, he flies
in and out of Singapore.
the staff strength is 71. These employees who currently hold
a 7.84 per cent stake under the Employees Share Option Scheme
(Esos) should see a return on investment of around 10 times
and the three buddies' investments of RM10,000 each should
see a return on investment of around 35 times - a fantastic
return for a three-year wait!
feels that Cyber Village's success lies in its competitive
cost structure, an advantage he has always been very keen
to exploit. "Cyber Village secures its clients and projects
from all over the region, including Singapore and Hong Kong.
But the projects are developed in Malaysia where the costs
are considerably lower than across the Causeway, hence our
competitive cost advantage over foreign rivals," he says.
other strategy is to hire top talents that he badly needs
to ensure Cyber Village stays attuned to the constantly changing
marketplace, both locally and abroad. To do that, he has to
headhunt or conduct interviews personally. He has to sacrifice
his weekends just for interviews, he says. But he has to do
it as so much of what consulting practices do depends on the
skill level of the people they have and Cyber Village now
works on more complex projects than before. Cyber Village
focuses on four key sectors: e-procurement, distribution (both
of which fall under the business-to-business platform), consumer
and financial services.
year alone, Cyber Village managed to complete three major
projects - IslamiQ.com, touted as the world's first syariah-based
Islamic portal; Apanac.com, a property portal for Optixlab
Sdn Bhd, the incubation arm of public-listed Renong Bhd; and
My2020.com Sdn Bhd, a subsidiary of Berjaya Group Bhd, which
operates My2020.com (www.plazab2b. cc) and handles the re-engineering
of the procurement processes of the Berjaya Group's companies.
More recently, it assisted in the development of Telekom Malaysia's
mega million portal, BlueHyppo.com. With such projects, it
is no wonder Pua puts high priority on training.
To help train his staff, Cyber Village plans to develop its
own Knowledge Centre, an online information centre designed
to play a critical role in the knowledge dissemination process.
This online centre will give all its consultants access to
important information regardless of their locations while
a physical library will be set up to complement the online
knowledge centre. It will house materials related to business
and technology. The Knowledge Centre, financed by proceeds
from the listing, will conduct training for internal and external
path to profitability
Village has seen encouraging growth in line with the tremendous
interest in the Internet and e-commerce sectors. By the end
of 1999, it had completed more than 20 e-commerce related
projects. Its turnover was S$578,000 in 1998, dipped slightly
to S$546,000 in 1999 due in part to the Asian crisis and rocketed
to S$3.059 million last year. Its gross profit was S$328,000
in 1998, S$464,000 in 1999 and S$2.225 million last year.
Village is already profitable, with a net profit of S$645,000
or RM1.35 million last year. The bulk of Cyber Village's turnover
last year was derived from the Malaysian operations which
grew 1,005 per cent from S$200,000 in 1999 to S$2.21 million
last year whereas its Singapore operations saw a more moderate
growth of 145 per cent from S$346,000 in 1999 to S$849,000
just last year.
company's operating expenses saw a 149 per cent increase from
S$0.62 million in 1999 to S$1.54 million last year. Malaysia
again accounted for most of the increase, accounting for 62.1
per cent of its operating expenses due in part to the tripling
of its staff strength from 18 to 64 in Malaysia alone and
from four to seven in Singapore.
the start of a new phase - acquisitions
believes that the Sesdaq listing is not an exit point for
him but merely the start of a new milestone. "As traditional
businesses see the need to get onto the Internet and become
more familiar with Internet technologies, there will be greater
demand for Cyber Village's services as an e-business and brand
strategy consultant, its creative designs, project management
services, web applications and technology, systems integration
and technology training," he says. Cyber Village aims to become
the leading provider of e-consulting services to organisations
seeking to venture into e-business within the Asia-Pacific
To do this, it plans to expand to Hong Kong, Thailand and
the Philippines by way of strategic acquisitions. Pua believes
that going on the acquisition trail is the way forward for
Cyber Village as it will not have to start from ground zero.
Target companies will have intimate knowledge of local conditions
and have an established clientele base that it can tap into
and develop further. "We will acquire intelligently and select
only companies whose core businesses are synergistic with
whatever we're doing.
are in fact about to acquire a Malaysian business that is
a division of an established multinational company for RM2
million. We are close to completing the deal so I'm not at
liberty to divulge details but this particular acquisition
should add around 70 per cent to our bottom line," he said.
This impending acquisition won't be his first. In December
last year, Cyber Village acquired 100 per cent of SparkMedia,
a Singapore-based web design specialist, for around S$178,000
and 53,085 shares of Cyber Village.
whether he'd ever felt the urge to give up during the early
years and what keeps him going, Pua candidly says that he'd
never contemplated failure despite not receiving a salary
for close to seven months in the early, struggling years.
"I was determined to keep going because I wanted very much
to be a success and I wanted to enjoy the wealth that I knew
the Internet had to offer," he says. And what would he have
done if he hadn't turned to the Internet to launch his business?
"I'd still want to be a consultant with either the Boston
Consulting Group or with McKinsey & Co because I believe that's
where my skills and interest lie." And what's the first thing
he's going to buy once he becomes an Internet millionaire?
"Nothing for myself but I'll buy a car for my dad. In fact,
he's already eyeing one now," Pua says, laughing.
E-business was excruciatingly slow in
the beginning and customers were hard to come by. To make
ends meet initially, Pua had Cyber Village operating as a
computer and Internet learning centre and the trading of computer
hardware and software. To keep the staff busy, Cyber Village
undertook an in-house project targeted at students.
is a web-based tutoring service with intelligent assessment
systems that was initiated in November 1997. In March 1999,
this project received a major boost when it was granted RM330,484
under the Demonstrator Application Grant Scheme (Dags) and
this was used to further develop KakakTua.com into a full
featured online education website which is scheduled to be
launched within the second quarter of this year. This is a
project the staff take great pride in, says Pua.
landed his first e-business project in December 1997, a month
after he set up a wholly-owned subsidiary, CV Online, which
handles the design and development of e-business application
systems. That big break, the Kolej Aman project, involved
the creation of a website for student enrolment online, the
first of its kind for a local tertiary institution.
next foray was into the e-commerce arena with NetFlowers Pte
Ltd which runs MyFlowers (www.myflowers.com.my) in April 1998
and which became Malaysia's first e-enabled online florist.
Today, MyFlowers has tie-ups with 30 florists in 10 countries
including Singapore, Taiwan, Hong Kong, the Philippines, Thailand,
New Zealand, Australia, India and Pakistan.
1998, Cyber Village (Singapore), a subsidiary, was set up
as part of its regional expansion plans. By now, business
was picking up on both sides of the border and in 1999, Pua
decided to drop the Internet learning centre and concentrate
on the e-commerce and consulting aspects. In August 1999,
Cyber Village helped establish WatchesPlanet (M) Sdn Bhd which
is a business-to-consumer (b2c) website selling watches globally.
Village holds a 20 per cent stake in WatchesPlanet.com, which
now retails around 5,000 models of designer watches and achieved
more than RM1 million in sales in the first year alone. Last
year, sales shot up to approximately RM3 million. While most
local e-tailers don't reveal their sales figures, WatchesPlanet
must surely rank as one of the leading e-tailers in the country.