Innov8tif recently took center stage on BFM’s “Open For Business” podcast, where George Lee, the company’s founder and CEO, shared his in-depth view into Innov8tif’s remarkable growth journey. George highlights how Innov8tif’s eKYC innovations, including their proprietary IC microprint verification, have been instrumental in the digital transformation of these industries.
As a nominee for the EY Entrepreneur of the Year 2024 Malaysia awards in the Technology Entrepreneur Category, George discusses the challenges of scaling a tech business in an evolving digital landscape. Looking ahead, George emphasizes Innov8tif’s ambition to expand its reach regionally while reinforcing its reputation as a trusted digital enabler in the industry.
This episode is a must-listen for anyone interested in the journey of a tech startup that has become a major force in Malaysia’s digital economy.
Below is a full transcript of the podcast:
This is a podcast from BFM 89.9 The Business Station.
Good morning and welcome to Open for Business, the show that dives into the journey’s adventures of entrepreneurs and business leaders.
I’m Roshan Kanesan and today I’m joined in the studio by George Lee, founder and CEO of Innov8tif Solutions, a player in the electronic Know Your Customer space or more commonly known as EKYC.
And if you don’t know what that means, don’t worry, we’ll break it down a little later.
George has been nominated for the EY entrepreneur of the year 2024 Malaysia Awards in the Technology Entrepreneur category and this company was founded over 10 years ago back in 2011 and has grown in the identity verification space to now serve about 70% of the telco and banking sector in Malaysia.
Over the years, George and his team have not only developed a suite of solutions for secure digital customer onboarding, but have also earned patents, including one for verifying IC microprints.
Recently, Innov8tive Solutions made headlines with the announcement that Datasonic Group is acquiring a 51% stake in innov8tive holdings for $40 million ring it from Revenue Group.
This strategy partnership reportedly aims to enhance innov8tive resources and accelerate growth as they continue to make waves and innovate in the digital identity verification space and scale their operations across new markets.
So in today’s conversation, we’ll talk about where the business is today.
Take a look back at where this business came from.
Talk a little bit about the numbers as well of course and the ambitions ahead in this rapidly evolving digital space.
George, welcome to the studio.
How are you doing?
I’m good.
Thank you.
Thank you for having me here.
After offline, you told me that the last time you were on BFM, two things.
One, it was in our old office.
So we’re talking about 2016.
So a long, long time ago, I’m assuming a lot of things have changed and we’ll explore that in more detail.
But I want to first break down EKYC.
This is maybe something that’s familiar to people in the tech space or the fintech space.
But even to other entrepreneurs, this may be something that just hear and just disregard, right?
Like, oh, it’s something I need to do or something along those lines.
So could you tell us a little bit about your main offerings today?
More importantly, how we might have interacted with the products that you make in our own lives?
Yeah, sure.
Yeah, so I mean, no worries.
EKYC is not just something alien to consumers, but even to businesses as well.
I remember in the early days where we were pitching the concept of EKYC even to our enterprise customer, they were like, oh, what is this?
Why do I need it?
And then they look at it and they say, oh, this is a nice to have.
Maybe we can do some prototype and POC.
Those were the early time when Bang the Gala was in the sandbox.
That was like 2016, 2017, 2018 time.
We were still early and people say, okay, let’s go through the sandbox and all those kinds of stuff.
And when COVID hits during the MCO and suddenly this is something that everyone needs and we were working like mad during the COVID time because of this.
Yeah, so essentially what it is is that many of you would probably have already used it before, but you didn’t know it.
So when you sign up for some e-wallet and they ask you to take a photo of your My Card, do a selfie.
Now, technically, that is EKYC.
Traditionally, I mean, this term came from the banking industry, right?
It’s called knowing your customer.
So E is basically electronic.
Now knowing your customer process has really been there forever.
Basically, what it is is that if you go to a bank, if you open the bank account, they will ask for your IC, they will ask you to fill in a lot of things and all that.
But actually at the back office, somebody needs to check if you are who you say you are.
The bank needs to know who you are.
And this is an anti-mine laundering measure.
Exactly.
Yes, but then how do you move this process from a back office process to something electronic where consumers do some self-service and immediately you can process and get some sort of result.
So this is what EKYC is all about.
So many times whenever you scan your IC, you scan your passport.
So it’s not just limited to IC.
It can also be passport when you apply for, let’s say your e-visa and things like that.
You might have experienced that before as well.
Or when you…
If you’re applying for Australian visa, for example, you have to scan your passport or your address.
Exactly.
Yes, that is exactly part of what EKYC is.
And even activating Telco Line.
If you get a prepaid today.
Yes, that’s true.
Yeah, they don’t activate it for you anymore, right?
You go to the shop and then write your number and all of that.
No, no more.
Because all those are opening up to too much fraud or agent getting your data.
So it’s also part of data protection.
Take it out of the hands.
Exactly.
And so you just scan it and activate your SIM card.
So all those are basically EKYC.
You primarily operate in the Telco and banking spaces?
Yes, for now, yes.
Mainly also because these are the regulated industry in one way.
And second way is that these are also the current use cases that have a strong need for EKYC.
Now give us a sense for, I guess, your market positioning at the target market here, right?
Because we just mentioned, obviously Telco and banking is a big space for you.
But we’ve also seen, I guess, the pandemic has kind of kicked off the rapid adoption of EKYC in particular.
Tell us a little bit about the market positioning today.
Well, today we are also looking at basically moving into other sectors.
So especially we see a lot of traction in still the financial but things like basically investment.
So you want to do any online investment, be it crypto or P2P or crowdfunding or whatever.
So definitely those you need some sort of EKYC.
But we’re also promoting the concept to basically the other markets which we don’t see a lot of, not just market share, but we don’t see a lot of market usage yet.
So for example, property segment, can you EKYC your tenants?
You cut off all the stories of horrible tenants and all those.
So how can we move forward by doing a EKYC and then people will know, “Oh, don’t play a fool, right?
I have my proper validated identity and all this and that.”
Property sector, we have people like car rental coming in, acquiring our using our technology.
We have even car dealerships.
So more and more, as long as you started as a requirement to know who you say you are as a regulatory, to moving forward as something that can help business to fast track their business process.
That is very interesting to also see the other areas.
And I guess people want to know their customers better to protect themselves as well.
And I guess we take it for granted, right?
In terms of like today I’m opening up a new e-wallet app or the other day I subscribed for prepaid number, take photos, scan my face.
It all just seems so easy on the consumer’s end.
But I’m sure it’s a lot more difficult on your end or challenging.
Could you give us maybe, what do you think that most people take for granted or misunderstand about EKYC?
Yeah, so I think the biggest misperception is that people will think, “Oh, it’s very easy, EKYC.”
I have a camera, I take a photo and I have some server to process it and done.
But there is actually more to that when you talk about EKYC.
So what we do is that we use, of course we use a lot AI.
We have a pretty strong AI engineering team.
And what our R&D team do is basically to come up with models of how to process all these photos of my cards that you have captured or passport or whatever ID card that you have captured.
Make sure that there are no fraudulent elements on there.
What about people pasting somebody’s else’s name on a real mic card?
Photoshop, taking it from a computer screen.
So there are a lot more to that.
So we check for liveness.
Make sure that the person is real.
That’s why I have to turn my face in all of that.
Yeah, those are one of the technology but we have actually moved beyond that.
Now it’s basically seamless.
You just take a photo and it’s done.
Because those that you move your face and all that, there’s still some way to break it.
Because technology can be evolving.
I presume that it’s also more expensive.
Yes, it is.
But it’s more secure as well.
And that’s very important.
And when you talk about not just that, and then there’s the continuous improvement that we need to do.
Because EKIC is not something you build once and you sell.
Correct.
Because you do something, they get better, then you have to get better.
Exactly.
Yeah, we have AI team, so does the fraudster.
We’ll talk about R&D in a little bit.
But before we go into a few messages, could you walk us through the current product mix today and that you’ve introduced over the last few years, especially in terms of the patented stuff?
A lot of our patent involves around how do we basically use AI to validate the security or validation of the identity card.
So it could be hologram detections, it could be the method that we use.
So all these are basically done in a way that basically is still validating of identity documents.
Then we are also having a lot of biometric, facial biometric solutions.
So we talk about life, nurse, facial.
Now the use case is not just onboarding.
How about moving forward where you need to authenticate a payment?
Lot of fraud now, right?
Banking and all that.
Yeah.
So that’s another offering.
But we also do provide services to basically do onboarding, develop onboarding app, for example.
We use some local platform also to help customers to digitize their business processes.
Actually, that’s another part of our business that’s always ongoing, but it didn’t get the limelight.
Because those are more services, enterprise solutions, as we digitize business processes for customers.
We’ll talk more about that later because digitalization is the story that keeps on going.
Every year, it’s again about digitalization.
Because we haven’t realized a lot of it.
The term I saw when talking about your patents was, IC MicroPrince.
Could you tell us a little bit about what that means?
So if you look into your mind card, you see a lot of wavy lines in the design of the mind card.
But if you take a very close look, sometimes you can see, sometimes you can’t know, you can just take a snapshot with your mobile phone, zoom in, you can see the word Karajan Malaysia.
I’m looking at my IC right now.
Yeah, you can see the word Karajan Malaysia.
It’s just the wavy line you’re looking at.
But you’ve got to look really close or you use a smartphone.
They’re actually wording that.
So if someone were to duplicate or rather, I would say, let’s say I take a photo and I print out, the quality of the word there would not be as clear as it’s supposed to be.
So we are actually doing this kind of detection.
Okay, okay.
George, we got more to get into, of course, including the why, the why you entered this business in 2011, which we will do after a few messages.
Folks, I’ve been speaking with George Lee, founder and CEO of Innov8tif Solutions, a player in the electronic know your customer space, more commonly known as EKYC.
George has been nominated for EY entrepreneur of the year 2020 for Malaysia in the technology entrepreneur category.
I’m Roshan Kandesan.
You’re listening to Open for Business.
We’ll be back in just a little bit.
So keep it here to BFM 89.9, the business station.
Build fortunes modestly.
BFM 89.9.
BFM 89.9.
Welcome back to Open for Business.
I’m Roshan Kanesan and this morning I’m speaking with George Lee, founder and CEO of Innov8tif Solutions, a player in the electronic know your customer space, more commonly known as EKYC.
Innov8tif serves around 70% of the telco and banking sector here in Malaysia and recently met headlines with the announcement that Datasonic Group is acquiring a 50% stake in innov8tif holdings for 40 million ringgit from Revenue Group.
George has been nominated for the EY entrepreneur of the year 2020 for Malaysia awards in the technology entrepreneur category.
George, we talked a little bit earlier about where the company is today, about 12, 13 years after you’ve started this company.
And it’s come a long way.
But I want to go back in time a little bit and go back to the point where you decided, hey, I’m going to start my own business and it’s going to be about EKYC or KYC.
Tell us a little bit about what inspired all this.
Well, we started in 2011 and back then I can tell you there’s no EKYC.
Because even if you think back, in 2011, what kind of phone were you using?
The smartphone wasn’t so smart yet.
2011, I think.
Was it an iPhone 4?
Yeah, it was some time later but there were not many apps.
If you think about it, most of the apps were from maybe America or the West.
Blackberry was quite big back then.
It was huge.
So you think of it back then, there wasn’t even much app even developed locally.
It was just a starting point.
So there was really no EKYC because I think maybe half of the population was featured phone.
Generally identity verification?
No, we never even get there.
So when we, I mean the reason why we started this company.
So me and my other founder, Tien Sun, my partner.
And then we had the idea to start this company purely because we were all working in this public listed solution company software.
So in the software as well, I was with them for 11 and a half years.
I think Tien Sun was there for probably seven to eight years.
And we always have this Tate Tarei break and we will sit down and we will look at the news and we say, “Oh, how come this American startup have this kind of funding and all this and then we will brainstorm my idea.”
I mean, it’s just for fun.
You know, World Roti Channa and Tate Tarei.
That’s explained my size as well.
And we will say, “Hey, let’s do this.
Let’s do that.”
But he was always talking.
Then one week later, the news come out, some American startup got this X million to do this idea that we talked about last week.
So we always had that.
But then you know, at that point, you just have the inspiration.
You want to do it and you just doesn’t have the…
Do you remember the idea was?
I can’t remember.
I’ve actually too many of them.
Yeah, there were so many of them.
And we always say you want to do it.
But then it’s like, can we afford to do it?
You know, you have to pay your car in Stormont house.
You know, that time I just switched or just got another house and we got to paying for in Stormont and all that.
And at that point, you know, it’s like almost the time to get married and should I do it now?
Should I do it later?
But you come to a point that you start to think it’ll be even harder when you have kids, right?
But you just don’t have the guts to do it, you know, but at that point of time, so happened one of our ex-colleague, Wendorf started his company.
He has a project and he needed help.
And he said, George, you’ve always been talking about starting your own business.
I want to give you a chance now.
I have this project, but I don’t have enough people to deliver.
I’ll take you as a subcon.
You come in, work with my team, help me to deliver this project and this X amount, you can use it to start your company.
So to me, that’s brilliant, right?
Yeah.
So, but you know, I’m more a business guy, right?
My background, I was being with advertising company actually, when I first started study part time, while I was in the ad agency.
And then I moved into an IT company.
And then, but I needed someone who knew how to do programming.
It’s like, if I want to open a restaurant, I better make sure I have a chef with my partner.
Yes.
You know, so I approached them soon and surprisingly he said, “Yeah, okay, let’s do it.”
So all the RootChart and Databricks are finally coming to fruition.
Yeah.
But of course, we know we have this money coming in and all that, but then we say, “Hey, we still need some money to start things up, right?”
Yeah.
So I look for another one of our ex-collect, you know, BingDum.
And we say, “Hey, BingDum, you seem to have a lot of money, accounting guy, save a lot of money, you want to come in and so you put in a bit of money and three of us.”
And that’s how we started Innov8tif back in 2011.
So what would you say ultimately gave you this confidence to do this, right?
Was it the fact that you had planned it out and you’re like, “Okay, I’ve hedged my bets here.
There’s a project.
Money is coming in.
I got some funding here on the other side.”
Was that what gave you the confidence to do this?
Yes.
Yes.
So when all that align, then we have the confidence to get into it.
Of course, the reason is whether the project will be successful, whether you get all your money.
But at that point, the pushing motivation was also, “You better do this before you start your family and all that.”
If you’re going to do it, do it now.
That’s the kind of sense.
Yes.
And then we did it.
Yeah.
But of course, in the early days, if you asked me what was… But you didn’t also jump without knowing, right?
You kind of planned it out as well.
Yes.
It was foolhardy about it.
Well, we planned up to what we know, which is the completion of the project.
What you can do.
After that, then it was okay.
Let’s figure that out later.
So it started off as a software development business.
Yes.
So you helped a friend of yours with a project.
They needed the manpower, essentially.
So from the time that project ends, then you’ve got that first P&A.
What happens after that?
Yeah.
So we then look at… So very simple.
So what we do is that we then talk and we say, “Okay, let’s look at what we know how to do.”
All right.
So what we know how to do is, okay, we know how to build portals.
We know there’s this local platform that we know how to make use of it to help businesses to digitize their business process.
So that’s what we did.
So we take that and we start to offer.
And of course, we were like, “Oh, it doesn’t matter.
It’s more of a big project.”
We just go after every single thing.
But we were a bit lucky.
So we got quite a bit of a project to help us sustain.
And then we hire again, we had to hire all the people we know.
So we keep hiring from our ex company.
We didn’t pinch anyone, by the way, but these are people who have left.
Just to get it right.
Then we grew to a five-man team and then we started to look.
But in the heart, we always say we want a product because coming from custom software development business, we know this is not something that can sustain you in the long run.
Not super scalable either.
Yes.
And you hire all the people and don’t know project then.
It’s very manpower based.
You got to customize the solution.
So it’s very advisory consultancy and service provisions.
Yes.
So in the early days, I’m the salesman.
I’m also the PM.
My partner is the developer.
He’s also the tester.
He’s so implementer.
So funny.
Sometimes we go to the customer meeting and they will say, “Are you the only one?”
“Yeah, yeah, because they see me during the sales process.
When gathering requirement is also me.”
So early days, it was very much a building products, building things for other people.
Before you went into the product space, what were the primary things you were doing for other companies?
Do you remember?
Yeah, we were building a lot of web portals.
Those are something that we did very well.
Of course, like I mentioned, we digitized business processes.
So this local platform enables us to quickly look at what are the business processes you have.
So basically, just think about this.
A lot of business, you have a lot of forms.
Internal forms, you need to fill up, get some approval process and all that.
But it’s all paper.
So what we did is that we helped company to digitize all these processes so that approval, viewing, attachment, everything is done digitally.
So that was the key business that we went in.
In fact, we got some pretty good customers doing that.
But we still feel that we really need to get into a product game.
When did you design your first product?
Okay, so EKYC was not the first product that we came out with.
So even back then, I think in 2012 or 2013, we had the idea to come out with a campaign management product.
We called it “Campaignity”.
We got a partner, he fund half of it.
We fund the other half of it.
We make this bold move to say that, okay, we’re not going to take any more new projects.
We will survive based on whatever saving that we have for the next six months.
And we’re going to build this product.
We did that for six months.
But the problem is, when I took this to one of the banks back then, I showed it to the marketing manager that he said, “George, perfect.
This is what we need.”
You’re like, “Wow, you’ve built the right product.”
But then he said, “But you know, you only 20% of my requirement.
Can you build the other 80% before you can use your product?”
And I’m like, I already spent six months.
I got no more money.
I’m not going to build that.
So we go back into project mode.
We were hunting around.
And his biggest cost is manpower.
Manpower, exactly.
So we didn’t do that.
Then we get back into that.
Then we got an interesting project that wanted us to build a mobile app.
But none of us know how to do mobile app.
We know how to do the backend integration, which is what they needed.
But they still need a frontend.
So we learn.
We evolve the team.
We say we have to learn.
We got someone who have done it before to work with us as a partner.
We built that.
And that’s how we got into the enterprise mobility space, where we built onboarding applications for some of our customers.
Interesting.
George, very quickly, I know you got some funding along the way.
How much did you invest into Innov8tif at the start?
And how was the funding obtained?
Basically, we pulled together probably $60,000 ringgit to start.
We got projects along the way.
Our first project was probably $200,000.
And after that, it’s all project-based, self-funded, up to probably back in, I think before COVID.
Then we had a circuit metric that came in and actually put in some money and take out some sticks.
We’ll get into that a little later, the fundraising journey.
Right now, we’ve got to go into the news bulletin.
When we come back, we’ll talk a little bit about R&D and of course, some of the money side of the equation as well.
Folks, I’ve been speaking with George Lee, founder and CEO of Innov8tif Solutions, a player in the electronic Know Your Customer space, more commonly known as EKYC.
George has been nominated for the EY entrepreneur of the year 2024 Malaysia Awards in the Technology Entrepreneur category.
I’m Roshan Kandasin.
You’re listening to Open for Business.
We’ll be back after the news.
So keep it here to be FM89.9, the business station.
Before Friday, materializes BFM89.9.
BFM89.9, welcome back to Open for Business.
I’m Roshan Kandasin and this morning, I’m speaking with George Lee, founder and CEO of Innov8tif Solutions, a player in the electronic Know Your Customer space, more commonly known as EKYC.
Innov8tif serves about 70% of the telecommunications and banking sectors here in Malaysia and recently made headlines with the announcement that DataSonic Group is acquiring a 51% stake in innov8tif holdings for $40 million ringgit from Revenue Group.
George has been nominated for the EY entrepreneur of the year 2024 Malaysia Awards in the Technology Entrepreneur category.
George, we spent the first half an hour talking a little bit about where the company is today, but also the origins.
And the origins was not KYC, it was software solutions customized for other people out there before building your first product later on.
And a lot of this journey has come a long way.
I’m sure the pandemic has played a big part as well in the acceleration.
Now, when we look at the KYC space, it’s a rapid evolving field that we were talking about earlier that if you do something, then the fraudsters do something else and then it’s a little bit of a game of cat and mouse continuously.
So what’s going to be super important here for your clients and for us, the end consumer is your R&D process and efforts.
So tell us a little bit about how Innov8tif approaches product development and R&D to stay competitive.
Yeah, so what we have to do is that we actually dedicate different teams into product and R&D as well.
So product is pretty much thinking about what’s next or what’s the next few steps that we can do.
Where else R&D team then looks into the problem statement that of course what are the issues that we’re having today or what can be improved.
And it’s a continuous development that they have to work on as well as looking at what are the new possible things that we can do, toying with it, trying out internal demos or POC.
So those are all the continuous R&D things that we have to do because like you say, we have to predict what is the roster going to think of next.
And what are the other complementary products that we can also come out and introduce to the market.
So if you use EKYC, then what else do you need?
You have an onboarding app.
What else do you need for your onboarding app?
Is it fraud detection?
And after you have EKYC, the customer, what do you do with the customer data?
Do you need something at the back end to handle it?
So these are all the new things that we are also working on to introduce to our customers.
Now let’s talk a little bit about the number side of the equation.
And of course, on the back of the data sonic announcement, there were some numbers reported in the Edge.
Innov8tif posted a profit after tax of 1.4 million ringgit on revenue of 14.2 million for the first eight months of this year.
Prior to that though, the group incurred loss of the tax of around 900,000, 900,000 ringgit on the bank of 18 million ringgit in revenue for the 2023 financial year.
Now some very simplistic back of the envelope linear projection here.
If you continue this pace this year, you could hit around 21 million for the full year.
But I’m presuming that business is also not linear.
It’s choppy and all of that.
So what are your expectations for full year revenue?
We are still targeting 20 million for this year.
What will drive you there?
What’s going to get you to that 20 million?
Well, the thing is that when we look at our cycle, one thing good is that when you move into a product based subscription per transaction kind of business is that you can predict some of your ARR, your annual recurring revenue.
So of course, some of the figures come from the ARR.
We know that these are some of the things that will come later part of the year.
They are based on when customers sign up and all that.
So those are one and of course in the pipeline, there are various RFPs that we are working on.
And if all those go through, then of course we will hit the numbers.
So from a business perspective or revenue generation perspective, you’ve got subscription and ARRs, but you’ve also got project that you work on.
Yes, a business.
Okay, so tell us a little bit about the business cycle for you.
Where are the busiest months of the year for you?
Where does revenue come in?
Where are the quieter side?
It’s somehow always towards the last quarter of the year.
Budgeting to be used maybe.
Well, we don’t know.
Maybe that’s how all our customers came on board.
But most of the renewal are then and I don’t know, over the years as well, many projects seems to come in during that time.
And they always have this thing where they say, “Oh, by December, we must go live and finish the project.”
So we always have this issue where our staff cannot utilize their leave.
We have to let them carry forward.
We have staff who can’t go or leave on December holidays because they have to stay back and work on projects.
Somehow every year, it seems to hit us at that point.
That’s the service provider life, right?
It really does come down to that.
What are the main revenue drivers today?
So you’ve got projects, you’ve got subscriptions.
Tell us a little bit more about these two verticals perhaps and where the revenue comes from here.
Majority of revenue are from subscription today.
And this is a subscription to what?
To EKIC products.
We also still have some subscription on our onboarding app, some of our other customers as well.
So majority are from subscription.
We do have the others mainly from services as well as maintenance of some of the system that we have previously deployed for our customers.
Now, you have, as I mentioned, quite a big share in terms of Malaysia’s telco and banking sectors in terms of EKIC.
What is the approach here to maintaining this position?
Because I’m sure that’s something you’re watching out for.
What also plans to grow ahead?
Yeah, so I think the key thing of course is a continuous improvement of the product in terms of accuracy of EKIC quality control and one of the new things that we can actually put into our customers.
But of course, there are many other things that we can also do within the ecosystem of our customers.
Because you see, when this thruster works, if I fraud one bank, I’ll make sure I fraud the other seven or eight, you know, that kind of thing.
Because when the report comes in, we can see it’s all the same guy.
So of course, there are some ecosystem that we are trying to pitch as well.
Can we have some sort of data sharing in between these guys and we are happy to facilitate this kind of strategy.
So these are also different things that we are pitching so that we not just provide the solution, but we play an important role in securing the ecosystem.
So whether you’re using EKIC, or whatever it is in the future, this is important.
I know you also said earlier that you see maybe other use cases out there in the industry.
What about geographic expansion?
Geography expansion, we already have our own entity in Singapore and Cambodia.
Singapore mainly serve our regional customers.
So we have some regional banks in Singapore that buy the solution there, but they use it in Thailand, use it in Indonesia and all that.
The beauty of software.
Yes, yes.
So they buy in Singapore one and use it in multiple countries and we have customers.
We have one of the largest banks in Indonesia that’s going to go live soon.
And in Cambodia, we have about 11 to 12 financial institutions that’s also using our solutions.
So we are planning to grow more of those markets and countries put more effort into a country like Cambodia will still be there, more countries like Indonesia, Philippines for the next coming years.
That’s geographically, but in terms of offering wise, we are also looking at what else can we offer.
You have this customer base, right?
So what else related can we sell to them today?
Today, we are upselling exactly and you just think about it.
Today, EKIC is about who you say you are.
What we want to go into is what you say you are as well.
Now, let’s talk a little bit about the future.
Data Summit Group is buying a 51% stake in Innov8tif holdings from Revenue Group for 40 million ringgit.
The acquisition comes with a profit guarantee of 2.5 million for 2025 and 3 million for FY 2026.
What are the key revenue drivers or maybe even cost optimization measures that will get you to these profit guarantees over the next few years?
Yeah, so of course, we are looking at a lot of internal cost optimization as well in terms of our team because back in I think last year, we did an acquisition of one of our competitor SanDT into us.
And so now you have two teams, right?
So we are optimizing the people together so that we are better optimized in terms of human resource costs.
That’s number one.
And of course, all the things that we’re using, we have so many cloud subscriptions and all those kind of things.
But we are also looking at things like how do you then optimize on your customer base?
You know, acquiring customers is the most expensive thing to any business.
So now you have the customer base.
So how do we optimize our sales costs by going back to all our customers and say these are all the other related things that we can also provide to you.
Yeah, because it can’t just be all about cost optimization.
So the reported loss last year, was that because of the acquisition?
Yes.
That’s where the PAT was negative.
So you’ve got this strategic partnership now.
But in terms of the guarantees itself, right from the outside info, someone who doesn’t really know your business in detail, they may look a little ambitious given the PAT at the loss last year.
But now we know that there was also part of the acquisition.
Could you give us a little bit more context in terms of whether there is, you know, why give us some context, whether this pressure may, you know, make you think about short term over long term a little bit more or are you, you know, has history shown that actually these PATs are achievable?
We think it’s achievable.
And definitely those are some of the target that we are also, it’s actually quite aligned with the target that we set for ourselves.
Even before this news came out, you know, and main reason is because we know we want to take this company further.
Yeah, people always ask me, do you think about IPO and all this and that, you know, but for me, the key is that before we think about IPO, let’s get the bottom line up to where we think is justifiable for us to, you know, go into any kind of IPO exercises.
So with that in mind, then how will this partnership with DataSonic Group help advance the company and its objectives looking ahead?
Well, we definitely think that it’s a very strategic partnership, given that, you know, they are the ones who have a lot of know-how and supplying a lot of ID related things to governments, not just Malaysia actually, I think they, you read their profile is around the world.
And we came in from the side of a digital, you know, and also evolving around ID.
So definitely we see a lot of synergistic collaboration.
And given that we also have our AI team, that possibly we can also complement whatever ideas or solutions or customers that they have.
You know, so we do see that it will be very strategic for us to come together so that, you know, the strength on both sides will enable us to basically empower a lot more customers.
Now, the hot question, of course, is now that DataSonic holds 51% stake in the company in the holding group, how much operational and strategic freedom do you have as CEO to press strategy forward?
Right.
Well, I can’t comment on behalf of DataSonic at this moment, because I think the process is still ongoing, right?
Yeah, but from our experiences when revenue acquired, the 51%, basically, we still have the, we still the one needed to run the business.
So in fact, when we did that with them, they wanted us to have a service agreement to make sure that we stay.
And if I’m not wrong, this one, probably the same thing will come as well.
I’m predicting.
Yeah.
And so it’s a good thing, you know, so it means that because I think when a lot of business, when they acquire someone else, it’s not just about the profit or the technology, but they do understand that it’s all about the people, right?
And so I think as long as we all have the same understanding, we are still very much needed to, you know, propel and take the business to the next level.
Yeah.
So we’ll let the dust settle on this deal before we talk about IP.
Maybe the next conversation we have here, George.
But right now, given that you’ve got, you’ve got a strategy partner here, this is not your first strategy partner revenue came in before this as well.
What advice would you give to other entrepreneurs who are looking at possible strategic partners in their own businesses?
Because I think if you get a strategy partner too early, sometimes it can be, the power imbalance can be quite destructive.
So tell us a little bit, give us some advice here.
I think for me personally, you have to know what you want, where you want to go, and what your strategic partner can bring to you.
And like you say, is it the right time?
Do I have enough traction and market shares?
You want to have a strategic partner, but at the same time, you want to have some negotiation upside as well.
So you need to know your strength and basically what you can offer and what they couldn’t do, what you can do, and come to the table with a win-win solution.
You don’t want to have an imbalance of power.
Yes, that’s right.
George, it’s been a pleasure speaking to you.
I wish you all the best with the EY Entrepreneur of the Year Awards.
Thank you.
Thank you.
A pleasure for me to be here.
Folks, I’ve been speaking with George Lee Thounder and CEO of Innov8tif Solutions, a player in the EKYC space.
Innov8tif serves around 70% of the telco and banking sector here in Malaysia and recently made headlines with the announcement that DataSonic Group will be acquiring a 51% stake in Innov8tif holdings for $40 million ringgit from Revenue Group.
George has been nominated for the EY Entrepreneur of the 2024 Malaysia Awards in the Technology Entrepreneur category.
