Fresh $3m funding is not survival money, it’s to go full force on digitisation mission
THE new funding round of S$3 million raised by GlobalTix from Tin Men Capital and SEEDS Capital is not “survival or rescue money” but fresh capital to build up its arsenal of tech tools and to fortify its SaaS model in an increasingly competitive market.
That message came across loud and clear when I caught up with Benjamin Tan of Tin Men Capital, who’s been vested in the Singapore-based business since 2018 when it put in US$9 million in GlobalTix’s first institutional round, and GlobalTix’s two co-founders, brothers Chan Chee Kong and Chan Chee Chong, in Tin Men’s offices in the conservation-listed Khong Guan Building, built in 1952.
GlobalTix, founded in 2013, is seizing the opportunity afforded by Covid to, in a way, go back to its roots of being a tech enterprise company. As Chee Chong, who is CEO, recalls, “When we started, we went out to the industry to speak about tech enablement of their operations, and everyone kept asking us, can you sell tickets?”
And so over time, the business developed two legs – a distribution/ticketing channel and a SaaS model of tech enablement. “We always had two legs to stand on but with Covid, one leg has obviously been hurt more than the other. We want to go full force on tech enablement and ride on the whole digitisation wave that’s happened during Covid,” said Chee Chong.
Chipped in COO Chee Kong, “The other leg is not dead. Inevitably travel will come back but if you have financial strength, this is the best time to build up tech. All those without financial capabilities will be hunkering down. We want to pick up the talent we need to build up our tech capabilities.”
Digitisation has been accelerated a decade – good news for enterprise tech
And it was this vision of strengthening its B2B enterprise tech that Tin Men bought into without hesitation, said Tan. Tin Men, named after that most humble of element that built up industry in South-east Asia, is a fund focused on enterprise tech – its portfolio includes Hubble, Brazyn, Rate It and Overdrive. “We all came from B2B, tech as a business, background. We understand unit economics, and not burning money until someone invests,” said Tan.
Benjamin Tan: The mural commissioned from a Colombian artist takes pride of place in Tin Men’s office.
GlobalTix is its only travel investment out of five. Recalling the moment in 2018 when it first invested in GlobalTix, Tan said, “Although we didn’t know travel, we thought GlobalTix was special, that it focused on the trade side, providing big brands with supply especially across South-east Asia, so that brands can focus on marketing with supply handled by GlobalTix. We like that.
“This new round is to invest in tech – to help digitise the big attractions and provide tech to small and medium tours and activities providers in the long tail.”
Tan said that he liked the fact that, even through the pandemic, GlobalTix stuck to its mandate. “Even with the SingapoRediscover Vouchers programme, it took an angle that it would power attractions to sell and leverage the vouchers directly and stuck to its B2B roots to provide value to its customers.”
Given that it’s not heavily exposed to travel, Tan said the fund has done well during Covid. With interests in construction and industrial IoT, Tan said the digitisation of these sectors has been accelerated by at least a decade. “Everyone used the downtime to stack up on tech and we see that same trend happening in travel.”
Of course, Tan admitted it was “initially scary” in the early days of Covid to see travel demand disappear. “But we knew it would survive. It’s got a prudent CFO who knows about cost control. It was a question of how it would use the time.”
Lessons from Hoi An and Borobudur
How it has used the time is to build up a stack of solutions around safe entry, contact tracing, capacity management, cross-border channel distribution and an end-to-end digital ticketing for a contactless experience.
Acknowledging the competition out there – with the drying up of consumer demand, most of its competitors have also invested heavily in B2B tech such as Klook and KKday – Chee Chong said, “The pie is big enough for everyone. In the hotel industry, there is not one single PMS that has conquered the space. Yes, it’s a land grab for now but the tech for ticketing systems, no one system has the same features as the other – the more the better, I say. Now no one can say, ‘you are the only one doing this?’.
Having said that, he added, “We want to win in Asia. The big and medium size attractions appreciate our neutrality, as well as the operators of small businesses such as walking tours. Our solution is a full suite of solutions covering process optimization, customer journey and integration with the back end.
“We enable companies with their own capabilities so they can choose to go direct or work with others. This is our way of creating a level playing field for the industry – for big and small guys.”
It’s learning heaps from current clients such as the UNESCO-listed Hoi An Ancient Town which wants to digitise its ticketing and introduce a “town pass”, where customers can pick from a menu of attractions for one price. It’s also working with Borobudur, the famous temple attraction of Indonesia, to digitise regional ticket sales.
“Every single client teaches us something. For example, never underestimate the strength of finance departments – when you want to introduce any ticketing system, finance has a very big say. In Indonesia, you need a commission system to cater to taxi drivers. Every attraction has unique needs that we have to address. This is a three to five-year journey,” said Chee Chong.
One leg may be hurt for now but industry needs two strong legs for robust growth
While it is doubling down on its B2B solutions, the two brothers stressed that the two legs of the business – distribution/ticketing and tech enablement – go together. “Distribution cannot become more efficient if there is no tech. In Thailand, while we API to companies like TripAdvisor and Expedia, there is a human emailing behind the scenes. For distribution to be efficient, we need suppliers to adopt tech,” said Chee Chong.
This latest investment is to fix the roots of the industry – to drive tech adoption so that distribution becomes more efficient. Said Chee Kong. “Our clients outside Singapore are interested in our distribution – they see the light at the end of the tunnel and they want to be able to turn on the switch and get first bite at the recovery. There is a need to build back distribution as well.”
A big challenge facing Singapore-based travel tech companies though is the talent drain and crunch. Lots of tech talent has left travel, lured by the big Chinese and other e-commerce giants that are expanding into South-east Asia, and it is a challenge competing for new tech talent against these giants.
Reflecting the new priority of the company, of its 70-person headcount, 20 are now in hardcore tech, said Chee Chong. “Recruitment in Singapore is particularly challenging. This is part of the reason why we are expanding overseas, we have tech developers in Indonesia and the Philippines and are hiring in Thailand.”
Chee Kong said, “For travel companies like us, Covid has helped us in the workplace. It’s shown us different ways of working, that it’s easy to work with overseas teams, that virtual meetings are as productive. However, yes, we haven’t lost sight of the fact that fireworks happen when you have physical teams sitting together in front of whiteboards. But it’s shown us a new hybrid way of working.”
As for how Covid has changed Tin Men’s perspective as an investor, Tan said, “This is a crisis that doesn’t spare anyone so we have seen lots of compassion and empathy and investors giving more leeway to their portfolio companies. Now we’ve gone past that and we’ve found a way to work despite it and in fact, there are more opportunities.”
It’s also made the company more proactive in terms of scouting for investment opportunities. “We used to be passive. Now we are forming specific task forces to go after companies in specific spaces – such as shipping, manufacturing, oil and gas, ad and marketing tech.”
It wants a maximum of 10 companies and living up to its name of Tin Men – “we see value in what may not glitter” – Tan said its vision is to build a resilient fund and “return the equivalent of a unicorn-driven” portfolio.
“We have five good companies and everyone is doing well. We are looking for capital-efficient operations that we don’t have to throw money at to drive success. The $3 million is icing on the cake for GlobalTix, they have strong reserves already, we want both their legs to do well.”