Fernando, who had sold his earlier startp, UK-based digital content company – Saffron Digital Ltd – to handset maker HTC for $50 million in 2011,launched Yonder and Beyond in 2013. The acclerator’s goal is to build and be associated with a Unicorn – a billion dollar tech startup.
Its portfolio currently includes six companies, including MySQUAR, Myanmar’s only social media platform (that is similar to WhatsApp in the local language), which has more than 460,000 users. it expects to more than triple them, to over 1,480,000 by the end of the year. Later this month, or early June, MySQUAR is set for its initial public offering on London’s Aim. It plans to raise about $2.5million at a valuation of $25 million.
Yonder, he said, was looking at Singapore as some of the tech taxes and initiatives in the city state were exciting, in addition to it being a short hop to Myanamr. Edited Excerpts.
Where do you see Yonder & Beyond going from here?
Yonder is currently based out of Australia and the US – we have huge aspirations. It is Singapore, Shanghai and Mumbai next. We want to build mini-teams to help startups. I will have to build Yonder India with a mini-version of the current team who can reach out to the right people. Selling a $50 million company is one thing but now we want to make the next move – in four years, we want to be a billion dollar company.
What got you to launch Yonder?
After I sold Saffron, the initial plan was to start a recruitment company to help startups find people, because losing people is expensive, time consuming and painful. If you have an entity that can recruit for you, know the culture, know the founders, then you get much stickier staff. I started a recruitment company called Prism and by end of 2013, there were four companies I was working on and I felt that I needed more senior help – I called my old team back from Saffron. The Yonder team put in $3 million, raised two million dollars in seed capital and also got an additional $5 million when it listed in Australia last year. We listed in Australia as the country allows companies that have no revenues to go in for a float.The other advantages Australia offers includes, the time period for the listing being three to six months, and also lower costs for undertaking an IPO.
Singapore has several accelerators. So how will Yonder be different from the other accelerators?
When I sold Saffron Digital, I made quite a bit of money – but never having had such money before, I did not how to work with it. Immediate thing that happens is that all private bankers call you up and tell you about their deals. But, I want to invest in things that I know and that is tech. This is why Yonder started – I want to work in businesses, and work with businesses with my own money and grow businesses at a faster rate because of my connections and experience. Yonder provides a development team. We are a series of tech professionals and we come in and say, ‘how do we add value to your business immediately’? If that question is answered, then we ask, ‘does the management want us to add value’? The other thing we bring in is, many companies have not built a tech platform before. The Yonder Lab then comes in and says, ‘here are the 10 things we can do quickly to help you go in the right direction’. Or if you get to a point where you cannot move any further without more money, Yonder will come in do some work to get you past the next hurdle.
A lot of tech firm – app labs – take equity in your firm and do the tech work. I found that has not worked at all in the last 10-15 years for several reasons. They need to hit their bottom lines to get their businesses to run – equity plays are 4-7 years. So they are not thinking long-term. So they have to start charging you – that is where it all starts to fall apart because they are trying to make their margins off you and you get overcharged. We plan you to a point of, hopefully, not needing us, and we also help you grow. My chief technology officer is Peter Sedeffow, former CTO of Saffron Digital, and he has deployed solutions globally for HTC, Samsung, LG, T-Mobile, Vodafone; and my chief product officer Mahmood Dhalla was formerly the global director of products at HTC, and he also had over 10 years’ experience at Microsoft in senior management roles – our companies can just pick up the phone and talk to these people.
I am a worker incubator. Yesterday, I had a meeting with Deezer, the second biggest music streaming service in the world. I have invested in a mobile company that is launching in Australia – the reality is that this startup is run by a 27-year old and where does he get access to this kind of network? When does he get the CEO of his local incubator talking to Deezer for a collaboration? On the other hand, I can reach out my contacts and say, we’ve worked together for 15 years, and can we partner for this – this makes a huge difference. I sit with all the CEOs of our companies – my team joins and we try and bring sales and strategy solutions. Incubation is not the right word – we are not that – we are operational. I am not a professional investor – I am a professional worker.
Why Myanmar? What made you invest in MySQUAR?
When we started talking to MySQUAR, smartphone penetration in Myanmar was 7 per cent – it became 10 per cent by the time we reached a deal. It is growing that quickly. Handset prices are coming down all the time, they have just given out two new mobile (permits) to Telenor and Ooredoo and that is exciting, and it felt like it was a great market. It was also felt that existing social media applications like wechat and line were not configuring for the Burmese language. So the opportunity was there. The reality is that, it is not easy to invest in Myanmar companies. The main reason we are listing is to allow people to have access to Myanmar market, as well as raise money for development.
What about Yonder’s other investments?
We have a controlling stake in Gophr which aims to be the Uber for couriers. We had soft launched it in Australia few weeks ago. We have a stake in US-based Playmeet, as well as in Wondr, that brings major social network platforms into a single, simple feed. mIf you have an event, everyone clicks pictures and you get a code. When you use that code, all pictures related to that event go into a common private album that can be seen only by those at the event – you can’t tag someone, follow someone or friend someone on ‘Wondr’. Yonder also has a 72 per cent interest in Boppl, a mobile ordering and payment app, that allows customers to pre-order and pay for food and beverages, and is currently being rolled out in Australia, France, Switzerland and South Africa. We are working towards ensuring that all its investments work together, where each of its companies are synced, with synergies across the backend, to the jointly address the demands of users.
Where is the next billion dollar tech company in South East Asia going to come from?
Don’t rule out any country. Don’t rule out Burma – it could well produce the next big billion dollar tech company.
As a tech entrepreneur and businessmen, what have been your learnings from being in this space for over a decade-and-a-half?
Three simple rules for success of tech products. First, make sure the product is easy to use so that your mom can use it. Second, what I learnt at the Telegraph is that what seems as a good idea for the UK may not work everywhere else. Third, make make everything as global as you can – how you succeed in each market is not going to be the same.
Take us through the Saffron journey. Why did you sell out to HTC?
Our first investors were high net worth individuals and then we raised $3 million, and we took about a year to raise that money. Post that, we sealed deals with companies like Vodafone, launching their movie services – when Vodafone launched 3G, we were one of their lead providers and were doing sport clips and movie clips. As the industry moved on, we launched with T Mobile, we launched Video on Demand. Our customer base had most operators worldwide and manufacturers started showing interest too. We gained clients in 47 countries and 17 languages and we had every manufacturuer apart from BlackBerry and Apple as our clients. So we had HTC, Nokia, LG, Samsung. All the big movie studios were are clients too. We become the go-to people for video. The idea of Saffron was that all movies will go online and the company wanted to build the infrastructure for the same.
We wanted to do a lot more with Saffron, but at that instance, you don’t balance the future growth of your company, but you take into account where your team is and how hard they have worked to get here. We sold to them because the company showed a real appetite for content, and for taking on Apple at that time. Look at what they (HTC) did – they bought us and they bought Beats Electronics. They were dynamically trying to change the business – those were big things to do, and the last time an Asian company that did something like that was Sony – Sony Picture, Sony Music.
Your earlier firm – Saffron – was linked with all leading operators in Europe. In the earlier part of the last decade, Europe witnessed heavy bidding for 3G airwaves – why did 3G not take off for several years after that?
Operators overbid. Consumers did not know what they were going to use 3G for. People were browsing on the internet in 2004, but not much. The phones were not there. The real thing that turned 3G on its head was Apple. Look at the number of 3G users before Apple and after Apple. What people had not done in the mobile industry was ease of use – you had to be technical to use your phone. My mom would not use Vodafone Live. All those services were readily available before Apple got there – music was being streamed by Vodafone in 2005, but it was not easy to use. With Apple, you had the marriage of content and phones, and data usage went through the roof. Did we communicate the message of what 3G could in 2005? – we did, but people were not interested, but Apple made people interested.