ENABLING ENTERPRISEJANUARY 2017

SHOWCASEBUILDING A STRONGER FINANCIAL FUTURE: D’DOUBLES

SHOWCASEGROWING THROUGH MERGERS AND ACQUISITIONS: NORDIC FLOW CONTROL

JUMPSTARTHEALTHY DOSE OF FINANCIAL SUCCESS: WEB BIOTECHNOLOGY Watch SPRINGnews

on YouTube!

MONEY MATTERS

2 JANUARY 2017

CONTENTS

EDITORIAL TEAM Marion ABRAHAM (marion_abraham@spring.gov.sg)Amelia AW (amelia_aw@spring.gov.sg)CHOW Zhi Ting (chow_zhi_ting@spring.gov.sg)Fazilah LATIF (fazilah_latif@spring.gov.sg)Felicia LEE (felicia_lee@spring.gov.sg)Fizzah RAHMAN (fizzah_rahman@spring.gov.sg) Kathleen TAN (kathleen_tan@spring.gov.sg)Mark TAN (mark_tan@spring.gov.sg)

EDITORIAL & DESIGNPublicitas Content publicitascontent.com

JANUARY 2017

SHOWCASE DEALING WITH FINANCES THE UNCONVENTIONAL WAY

BUILDING A STRONGERFINANCIAL FUTURE

GROWING THROUGH MERGERS AND ACQUISITIONS

JUMPSTART HEALTHY DOSE OFFINANCIAL SUCCESS

ON THE FAST TRACK TO RAISING CAPITAL

INSIGHT FUNDING YOUR BUSINESS: A GUIDE TO FINANCING OPTIONS

12

810

14

4A SOUND FINANCIAL MANAGEMENT SYSTEM AS WELL AS GOOD FINANCING ARE BOTH ESSENTIAL IN ENSURING CONTINUOUS BUSINESS GROWTH

FEATURE STORY

MONEY MATTERS

To subscribe, visit www.spring.gov.sg/springnewsFor comments and feedback, email springnews@spring.gov.sgDownload the SPRINGnews app from the App Store or Google PlayWatch SPRINGnews at www.youtube.com/SPRINGsingapore

1617

JANUARY 2017 3

BUZZ

SHOWCASE DEALING WITH FINANCES THE UNCONVENTIONAL WAY

BUILDING A STRONGERFINANCIAL FUTURE

GROWING THROUGH MERGERS AND ACQUISITIONS

JUMPSTART HEALTHY DOSE OFFINANCIAL SUCCESS

ON THE FAST TRACK TO RAISING CAPITAL

INSIGHT FUNDING YOUR BUSINESS: A GUIDE TO FINANCING OPTIONS

Picnic of the futureOn 12 December, Senior Minister of State for Trade and Industry, Ms Sim Ann, launched Picnic – a new urban food park – on the third floor of Wisma Atria in Orchard Road.

Based on a communal dining concept, Picnic is fitted with state-of-the-art lighting that adapts its intensity and colours to suit the time of day, giving customers

a unique sensory experience. Supported by SPRING Singapore’s Capability

Development Grant, Picnic has implemented high-tech solutions, such as an electronic ordering and payment system, and kitchen automation to accelerate its food preparation processes, as well as to become more manpower-lean and productive. ¢

We’re on YouTube!

Mr Cheng Hsin Yao, Director of Picnic (extreme left); Ms Sim Ann, Senior Minister of State for Trade and Industry (second from left) and Mr Cheng Heng Tan, Director of Picnic (extreme right)

A sound financial management system as well as good financing are both essential in ensuring continuous

business growth

MONEY MATTERS

4 JANUARY 2016

FEATURE

Financial management is critical to operating a sustainable business. In order to implement – and

effectively follow through – a sound financial management system, SMEs need to have financial discipline, flexibility and the knowledge to navigate and respond nimbly to changes in the business environment.

Having sound financial management One of the key concerns for most SMEs is cash flow management, or more specifically, the ability to generate cash quickly enough from customer invoices. “A good financial management system can help SMEs execute effective receivables collection strategies to maintain sufficient liquidity,” says Mr Piyush Gupta, Deputy Chairman of SPRING Singapore and CEO of DBS Group.

SMEs typically face cash flow challenges due to several reasons. They could be caused by factors such as lumpy cash cycles (e.g. large upfront capital required for projects) or unexpected expenses. It could also be due to delays in payments from customers, or accounts receivable. This has a trickle-down effect on account payables, such as loan repayments, staff salaries and supplier payments.

One way to avoid cash flow issues is to have a proper system to manage working capital (which are used for day-to-day operations). This involves close monitoring of inventories, accounts receivable and payable, and cash. “It’s important for SMEs to understand that a disciplined cash flow management system can help them achieve long-term profitability and sustainability,” adds Mr Gupta.

Prompt payment of accounts payable is also important to avoid late payment charges, losing out on supplier discounts or being subjected to tighter credit terms. Taking a more proactive approach to accounts receivable can help a business bring in customer payments faster, and reduce the risk and cost of bad debts. This includes drawing up – and implementing –

payment terms, such as the payment period, discounts for prompt payment, and interest charges on late payments. This way, businesses will be able to free up cash and strengthen their working capital to invest in new growth opportunities, equipment and developing new products.

“For all of these to work, SMEs need to consistently monitor key processes, such as invoicing, collections, payments and reconciliations,” Mr Gupta adds. One way to do so is for companies to adopt technology tools, such as a financial dashboard. A financial dashboard monitors key performance indicators such

purchase equipment for automating processes or upgrading current premises and equipment.

Other than traditional debt or equity financing, SMEs can also consider alternative sources of funding, including equity crowdfunding and venture debt.

Also called crowd-investing, equity crowdfunding is a method of raising capital from broad groups of investors. In return, investors receive shares in the company. Clearbridge BioMedics, a local medtech startup, is an example of a company that has managed to leverage on the powerful network effect of this kind of financing (read more about it on page 16). Through an online

A good financial management system can help SMEs execute effective

receivables collection strategies to maintain sufficient liquidity. Mr Piyush Gupta Deputy Chairman of SPRING Singapore and CEO of DBS Group

as profitability, liquidity, and other relevant indicators to assist management in making informed discussions. This will help companies to identify issues and allow them to take steps to get back on track.

Supplementing working capital needsTo supplement working capital, SMEs can explore funding options, such as equity or bank financing.

For instance, companies with 10 staff or less or have annual revenue of less than $1 million can turn to the SME Micro Loan, which offers up to $100,000 to fund daily business operations. For larger companies, the SME Working Capital Loan (WCL) is available, offering funding of up to $300,000 per company. Those requiring trade working capital can consider tapping on the Loan Insurance Scheme to access trade facilities.

There is also the SME Equipment and Factory Loan, which facilitates access to funding for companies looking to

capital-raising platform, the company was able to access multiple venture capitalists from all over the world to help with its expansion.

The SME Venture Loan, launched in April 2016, is also a way for innovative and high-growth enterprises to access funding. Eligible companies can apply for venture debt funding of up to $5 million each for various purposes that can help them in business expansion plans, such as working capital, asset financing, project financing, or mergers and acquisitions (M&A).

Achieving continuous business growth through M&AGrowth can be divided into two main types – organic and inorganic growth. Typically, enterprises expand through organic growth, which means growing internally through customer base expansion, product development and increasing sales to boost cash flow.

Meanwhile, inorganic growth refers to growing through M&A – a strategy

JANUARY 2016 5

corporate structure to support their growth. SMEs can tap on the Capability Development Grant (CDG) if they would like to upgrade their financial management capabilities in these areas.

When asked how SMEs can prepare for the future economy, Mr Gupta says: “SMEs need to be equipped to make quick, informed decisions about how to adjust and optimise their financial resources according to changes in market conditions. This will enable them to boost long-term profitability and growth, and gain easier access to future capital market activities.”

that companies can also consider. One company that has used this strategy is Nordic Flow Control Pte Ltd. In a span of a decade, it has acquired three companies, which allowed it to manufacture its own line of products and solutions, expand its services locally and globally, and diversify into other industries (read more about it on page 12). These different investments reduce the company’s exposure to total risk in a particular industry and increased its debt capacity, which in turn is beneficial to its cash flow growth.

Ensuring financial sustainability Managing financial resources to make better financial decisions is necessary for SMEs looking to accelerate growth. This can be achieved through an efficient management of cash flow and working capital – both of which are critical for business survival and long-term financial sustainability.

Mr Gupta advises SME owners who are experiencing growth or financial stress to seek external assistance. “If need be, they can discuss their growth plans with a trusted banker, so that they can better plan their funding and financing structure,” he says. “SMEs can also approach SME Centres for a free business diagnosis, advice and guidance on the various funding schemes.”

Companies can also take the initiative to invest in a sound financial management system and start by planning and forecasting their finances, understanding the risks in their business processes and implementing an effective

6 JANUARY 2016

FEATURE

8 JANUARY 2017

DEALING WITH FINANCES THE UNCONVENTIONAL WAY AcuMed Medical equips staff to think strategically through better financial management

he role of a Chief Financial Officer (CFO) is often strategic and crucial in managing a company’s

financial health and contributing to long-term business growth and success. While some startups and SMEs might not have a CFO – typically a high-paying position – there are other ways of ensuring that financial actions are sound. AcuMed Medical, a local primary healthcare provider with 12 clinics in Singapore, is a good example of a company that currently does not have a designated individual CFO, yet still continues to thrive – and succeed.

“We recognise the key role that a CFO plays in ensuring the financial success of a company,” says Mr Jeffrey Yam (photo, left), Director, AcuMed Medical. “But instead of hiring a designated CFO, which can be expensive, we’ve instead equipped our accounting and finance team to think strategically in financial management.”

T

8 JANUARY 2017

JANUARY 2017 9

SHOWCASE

Mr Jeffrey Yam Director, AcuMed Medical

This new structured approach together with the financial planning capabilities has put us

on the right track to managing our business.

keytakeaways¢ Developing strong financial management capabilities can take your business to the next level.¢ Speak to a business advisor at an SME Centre to find out more. Visit www.smeportal.sg to make an appointment.

are more aware of the related risks. It helps us to make sure that we are very prudent in the steps we take,” adds Mr Yam.

The company now makes better decisions that help better manage their cash flow, among other things. “This is important as operational and manpower costs are increasing, so we have to better manage the budget,” he says. Assessing risksMore importantly, besides empowering AcuMed’s team to gain better control of its budget, the acquired skill set has strengthened the team’s foresight

AcuMed the confidence to carry out its future growth plans. For instance, it has plans to set up more primary care clinics across Singapore and expand its range of healthcare services.

It also hopes to open its first primary care clinic outside Singapore soon. While acknowledging that growth has its risks, Mr Yam has faith in his accounting and finance team, who strives to mitigate any financial risks that come with the company’s growth and expansion.

“This new structured approach together with the financial planning capabilities has put us on the right track to managing our business,” he says.

and helped to take the business to the next level.

Beyond better financial management, AcuMed has also implemented a risk management framework. This has helped the company identify risks, especially in areas such as operations, human resources and finance. Staff are now better able to prioritise their risks and establish steps to effectively minimise them. With the new framework in place, AcuMed is now better able to assess risks with the tools it has and identify what it needs to prepare for the future.

“Developing a risk management framework has really transformed how we make decisions. For example, we use this framework to assess the risks, costs and benefits of various aspects of our expansion,” says Mr Yam.

The benefits gained from this systematic, analytical way have not only enabled AcuMed to make better financial and non-financial decisions, but it also

has a positive impact to its clients. This has allowed AcuMed to have an edge over other healthcare service providers. Mr Yam says, “Our patients and clients directly benefit from cost-savings as we try to manage various types of costs such as purchasing and procurement”. As the company becomes more efficient, it aims to better care for its patients and clients by offering a wider range of quality healthcare services at an affordable price and in a speedy manner. On track for future growthThis new way of operating has given

In 2016, the company participated in the SME Business and Financial Man-agement (BFM) Programme organised by the Singapore Accountancy Com-mission, Singapore Business Fed-eration and Singapore Management University. They had the chance to be mentored by experienced CFOs and at the same time, pick up practical skills related to financial restructuring, merg-ers and acquisitions and risk manage-ment, analytics, budgeting, and cash flow management.

Making better decisionsAcuMed has since transformed the way it operates. Mr Yam and his team have taken on a more analytical and systemic approach in financial planning. Management reports are now more structured and existing financial processes are continuously reviewed towards being more focused and robust. “We make accurate and strategic decisions faster as we

JANUARY 2017 9

10 JANUARY 2017

BUILDING A STRONGER FINANCIAL FUTUREExpansion is on the cards for d’Doubles, a local office furniture solutions provider, after it successfully attained the SME Working Capital Loan

fter a combined 40 years in the office furniture industry, husband-and-wife team Mr Andrew Tan and Ms

Choo Luyun (photo, left) decided that it was time to start a business of their own in 2010. They set up d’Doubles Pte Ltd, a one-stop office furniture solutions provider. While both were determined to achieve success with their new business venture, the first two years of operations were particularly difficult.

As it was the couple’s first time starting a business, they did not have the necessary credentials to acquire financing from financial institutions. “As a result, we had to use our personal savings – and it was tough,” says Mr Tan, Co-Founder of d’Doubles.

“One of our key challenges was securing enough capital to finance our projects as a result of late payments from some customers,” says Ms Choo, also a Co-Founder of the company. “We also have to pay in full or place deposits when importing furniture from overseas suppliers. At times, we did not have enough upfront cash to take on certain projects, which resulted in lost opportunities.”

Expansion a key strategy for growthThe Founders did not give up. Instead, they persevered in their efforts to acquire external financing to alleviate the company’s cash flow problems and fund its growth. A local bank, upon assessing the company’s needs and business objectives, recommended the SME Working Capital Loan (WCL).

The WCL aims to help Singapore SMEs meet their cash flow needs and

A

10 JANUARY 2017

JANUARY 2017 11

SHOWCASE

“We now have the budget to increase our online presence and step up our digital marketing efforts, including setting up an e-commerce site.”

d’Doubles believes that its expansion activities, supported by its marketing efforts, will bring about more sales for the company. “This will, in turn, enable us to repay the WCL and, at the same time, achieve growth,” says Ms Choo.

Building a strong teamThe company has also expanded its manpower base to strengthen its design competency, support innovation and ensure that it stands out from its competitors. “A successful company is determined by the strength of its staff and their capabilities,” says Mr Tan.”

At the end of last year, d’Doubles hired six new staff for its sales and design teams. The company also now regularly sends its staff for training courses to develop their skills in different areas of the business.

Essentially, Mr Tan explains, the WCL has provided added financial value to the company, putting it on a track to better cash flow management. “This, in turn, has helped free up capital for other functions, such as training and development,” he adds.

Set for the futureOverall, says Ms Choo, the WCL has given d’Doubles the financial confidence to push forward with its growth plans and develop its workforce to help the company stay relevant and keep up to date with new trends and customer needs.

Mr Tan advises other SMEs to put in place strong financial fundamentals before taking on additional financing through loans. “This is to avoid defaulting on the loan and end up having more financial problems, which may affect a business’s reputation and credibility,” he says. “If used wisely, external financing can lead to greater business success, in terms of stronger cash flow, higher supplier and customer confidence, and ultimately, more profits.”

Ms Choo Luyun Co-Founder, d’Doubles Pte Ltd

The WCL has helped us finance bigger projects, which usually require a deposit. These projects have

significantly improved our business performance as our suppliers and partners now have more confidence in our ability to deliver and manage large-scale projects.

keytakeaways¢ The SME Working Capital Loan provides additional financing support to help businesses grow and translate plans into opportunities and results.¢ Find out more about the SME Working Capital Loan at www.spring.gov.sg/WCL

grow. It allows SMEs to take loans of up to $300,000. These are offered through 12 participating financial institutions, with SPRING Singapore co-sharing 50% of the loan default risks.

In d’Doubles’ case, the WCL, which was approved in August 2016, has allowed the company to take on projects and fund any upfront costs. “The WCL has helped us finance bigger projects, which usually require a deposit. These projects have significantly improved our business performance as our suppliers and partners now have more confidence in our ability to deliver and manage large-scale projects,” says Ms Choo.

With better cash flow and improved business performance, d’Doubles felt confident about carrying out its expansion plans – a key part of the company’s growth strategy. “As we are facing intense competition in Singapore, we realised that we needed to enter new markets to sustain business growth,” explains Mr Tan.

For instance, the company aims to expand further in the rapidly growing

ASEAN markets. “We already have a presence in Malaysia, but we want to expand our footprint further through a joint effort with our overseas partners and network,” he adds.

In the next few years, the company is also looking to expand into Myanmar, which has opened up in recent years. “We recently participated in a furniture fair in Yangon and received good feedback on our products. We see a potential for business, but it’ll take some time,” says Mr Tan.

d’Doubles also aims to boost its local operations to maintain its market share in Singapore. “We will be moving into a larger showroom in Tai Seng to house collections from some of our new products and brands, and attract more customers locally.”

As part of its expansion plans, the company will also use digital channels to broaden its product reach and acquire more customers. While Mr Tan admits that the company’s digital marketing efforts in the past have not been as aggressive, this is set to change in 2017.

12 JANUARY 2017

GROWING THROUGH MERGERS AND ACQUISITIONS Nordic Flow Control has been able to reduce industry-specific risks and achieve stable returns by diversifying its business activities through acquisitions

ordic Flow Control Pte Ltd, a subsidiary of Nordic Group Limited, started out in 1998 as a service

agent for marine control systems. Over time, faced with increasing competition from local and global players, the local company realised that it would not go far if it continued on its current business model.

Nordic Flow Control needed a strategy to grow and grow quickly.

N “Expansion, more business, diversified markets, higher profits and financial stability – these were top of mind for our team,” says Ms Dorcas Teo (photo above, first row, third from left), the company’s Chief Executive Officer.

Along the way, it decided to use mergers and acquisitions (M&A) to boost its market presence and obtain the skills and capabilities required to give the company an edge in new markets. When asked why Nordic Flow

Control chose this particular strategy, Ms Teo says, “We believe in spreading our risks as we grow and not putting all our eggs in one basket. Investing all our money in one business or geographical area can be dangerous if markets crash.”

Today, the Group is a solutions provider in areas of systems integration; maintenance, repair, overhaul, and trading; precision engineering; scaffolding; and insulation.

JANUARY 2017 13

SHOWCASE

Pte Ltd in 2015 expands its reach into the petrochemical and pharmaceutical industries. According to Ms Teo, this acquisition has further diversified the Group’s revenue stream, helping to stimulate more growth. “Our strategy of broadening our portfolio, in which the business remains relevant and within our footprints, creates synergy across our businesses; hence, allowing opportunities for cross-selling our products and services, which in turn increases our market share.”

Lower risk, higher revenueCombining different investments in a portfolio has helped the Group generate more stable returns over time. Since 2011, the Group has seen a steady increase in revenue.

Ms Teo attributed this success partly to SPRING Singapore. “SPRING’s Capability Development Grant was useful in helping us cover the costs of due diligence, thus accelerating the process of our acquisitions,” she says.

“Spreading our investments over different areas strategically also helps limit our exposure to total risk in a particular industry,” explains Ms Teo.

Another benefit is economies of scale. The subsidiary companies of the Group have become more cost-efficient and profitable through sharing of resources.

Strategy for financial stabilityOverall, the Group’s management believes that one of the keys to successfully grow their business and expand into other industries is through M&A, with the synergy created with their existing businesses placing them in a better position to stimulate future revenue and profit growth as well as generate positive returns for the shareholders.

Ms Dorcas Teo Chief Executive Officer, Nordic Flow Control Pte Ltd

We believe in spreading our risks as we grow and not putting all

our eggs in one basket.

keytakeaways¢ Mergers and acquisitions is a way to help your business diversify, mitigate risks, and grow quickly.¢ Visit www.spring.gov.sg/CDG to find out how SPRING can support your merger and acquisition efforts and financial management upgrading projects.

Road to growthIn 2004, the Group acquired Avitools (S) Pte Ltd, a local precision engineering business. The acquisition – financed by banks and shareholders – marked the Group’s foray into manufacturing its own line of products and solutions.

In 2011, the Group followed up with the acquisition of Multiheight Group, which provides scaffolding and alternative access solutions for the oil and gas, petrochemical, pharmaceutical, construction and marine industries in Singapore, which counted ExxonMobil and Chevron amongst its clients.

The acquisition presented the opportunity for the Group to widen its range of products and services as well as to tap into new customers in the onshore oil and gas sector, thereby expanding its customer base. The Group is also able to introduce its existing products and services to the customers of Multiheight Group in the onshore oil and gas sector.

The Group’s most recent acquisition of Singapore-based Austin Energy (Asia)

14 JANUARY 2017

JUMPSTART

I magine if you could conduct your own medical examination, upload the results to doctors and receive medical advice, all from the

comfort of your home. This is possible with Web Biotechnology Pte Ltd’s Spyder ECG System, the first of its kind in the world.

“In the future, critical diagnosis made only in hospitals could be replaced by tests done in an ambulatory, or outpatient, setting,” says Dr Philip Wong (photo, right), Founder and Medical Director of Web Biotechnology, a local digital health technology company. When attached to a patient’s chest, the Spyder ECG System can monitor and download the patient’s ECG (electrocardiogram)

HEALTHY DOSE OF FINANCIAL SUCCESSSPRING Singapore’s SME Venture Loan helps Web Biotechnology realise the growth potential of its Spyder ECG System

readings, which measures the heart’s electrical activity. This data is transmitted live via a smartphone to a centralised database, for easy access by doctors.

The company, which was established in 2010, spent three years developing the product. Dr Wong admits that getting Spyder ECG to market was a long, costly and challenging process. “In the first three to four years after Web Biotechnology was set up, funds were spent mainly in product development and getting regulatory approval for the system,” he explains.

An alternative solutionWith the initial help of grants and external funding, Web Biotechnology was able to

achieve the Medical CE mark in 2013 and launch the system first in Singapore. It now has presence in 26 other countries, including Malaysia, Indonesia, India and Russia. A product that bears a Medical CE mark means that it complies with the safety requirements as laid out by OECD countries and allows it to be sold in the EU for medical use.

Despite its rapid market expansion, Web Biotechnology still needed more capital to execute its growth plans in new markets, such as the United States, Canada and China. A solution came in the form of the SME Venture Loan, which the company got to know about through a local bank in April 2016.

JANUARY 2017 15

Markets like the United States,

Canada and China are strict and costly in terms of market entry requirements. With the SME Venture Loan, which covers business expansion, we can now consider these markets as new potential sources of revenue.Dr Philip Wong Founder and Medical Director, Web Biotechnology Pte Ltd

devices firms. “Markets like the United States, Canada and China are strict and costly in terms of market entry requirements. With the loan, which covers business expansion, we can now seriously consider entering these markets, and have them as new potential sources of revenue.”

Growth and expansion also come from further research and development of new-generation products. The company is looking to utilise part of the SME Venture Loan to further develop the Spyder ECG System. “Tests and trials can be costly, but with financing assistance, we’re hoping to develop an improved version of the product,” Dr Wong adds.

Ensuring financial stabilityOverall, Dr Wong believes that the SME Venture Loan could help businesses with high growth potential to support business expansion and secure new growth opportunities.

“However, it is also important for SMEs to have a plan in place for entering new markets, and a roadmap to product development and regulatory approvals. This will help set these enterprises on a path towards financial stability and success.” ¢

Entering more markets for higher revenue As part of its expansion, Dr Wong is looking to expand its regional sales and marketing teams. “This will, in turn, allow us to increase our presence and market share globally,” he explains.

Entering new markets also means meeting regulatory requirements. This can be especially difficult for medical

Want to keep up to date on the latest news from SPRING Singapore? The new SPRINGnews app puts it all at your fingertips with news clips, feature stories, company profiles and expert interviews that you can access whenever you want and wherever you are.

Grow your business!

You can enjoy reading SPRINGnews

on your iPad or tablet

The app also lets you access archived issues and makes it easy to share interesting stories with others.

Under SPRING Singapore’s Venture Debt Programme, innovative high-growth SMEs may apply for the SME Venture Loan of up to $5 million each for the purpose of business expansion. This loan may be used to finance operations, asset purchases, projects or mergers and acquisitions. SPRING co-shares 50% of the loan default risks with participating financial institutions.

Venture loan is a form of alternative financing for enterprises with high growth potential – like Web Biotechnology – which may not have established revenue streams or lack significant assets to use as collateral. It also involves significantly lesser shareholder’s dilution than equity investment and supports the growth of companies that are asset light but IP (intellectual property) heavy.

In Web Biotechnology’s case, the loan has enabled it to channel more energy into growing and developing its product, and less on trying to raise funds. “We can now focus completely on achieving our expansion goals, research and development for new products, and not have to spend all our time and effort on raising financing,” Dr Wong adds.

INSIGHT

16 JANUARY 2017

O e of the challenges that startups today face is maintaining sustainable growth.

“Many entrepreneurs face an uphill battle in moving from startup to scale up, but it is especially challenging and expensive for medtech startups,” says Dr Andrew Wu (photo, right), Chief Operating Officer of Clearbridge BioMedics, a local medical technology (medtech) startup.

“Medtech startups work and operate in a highly regulated environment, so it is important to develop a product with rigour,” Dr Wu adds. “At the same time, it is also crucial that our product is developed quickly so that it can enter the market as soon as possible to give us a leg-up over our competitors,” says Mr Johnson Chen, Director of Clearbridge BioMedics.

With the right financing, medtech startups like Clearbridge BioMedics will be able to clear these hurdles and gain entry into the market quickly.

Established in 2009, the company aims to improve the cancer diagnosis and treatment process and, ultimately, patient outcomes by developing a product that detects cancer with just a small sample of blood. “Currently, detecting or monitoring cancer require an invasive biopsy or CT scan, which may expose patients to X-ray radiation,” explains Dr Wu.

Launched for clinical use in 2015, the company’s ClearCell FX System uses liquid biopsy to give deeper insights into whether the cancer has changed and the type of treatment that’s best for a patient. The ClearCell FX System is currently being used for research and clinical purposes, both locally and globally.

Speeding up market entryIn its initial phase, the company turned to venture capitalists, and scientific and development grants for funding. This has helped the company achieve the CE IVD marking – which signifies that a product conforms to EU health and safety standards – in in-vitro diagnostic devices in 2015. The European regulatory approval is an important milestone for companies in the medical device development sector. “With the certification, we are able to penetrate the European market,” says Dr Wu.

However, it was also during that time that Dr Wu felt the need to pursue a more time-efficient financing strategy to speed up the company’s entry into different markets.

“We felt compelled to work with alternative financing platforms as the traditional process of raising funds from venture capitalists can be time consuming, and takes time away from growing the company,” Dr Wu explains.

Wide investor networkThe solution for Clearbridge BioMedics came in the form of an online capital-raising (crowd-investing) platform known as CapBridge, which matches a network of accredited investors (including VCs, Family Offices) with high-tech, high-growth companies.

“Instead of reaching out to venture capitalists one by one, we are able to use the network to reach out to multiple investors from all over the world who can help with our expansion” says Dr Wu. “This means less time spent on pitching to each individual investor, and more time for building our business.”

A global footprint Taking on this non-traditional route of financing has given Clearbridge BioMedics more confidence in expanding its sales and marketing efforts more aggressively in other markets, such as the United States, Japan and China – the latter of which has one of the world’s highest cancer rates. The company also aims to move its product into wider clinical use this year.

Similarly, says Mr Chen, other startups can leverage on alternative sources of funding to gain easier access to overseas markets. “But before pursuing this strategy, enterprises must have strong financial fundamentals and a concrete business plan to support their commercial growth and be attractive to investors.” ¢

ON THE FAST TRACK TO RAISING CAPITAL

JUMPSTART

Clearbridge BioMedics taps into a new alternative source of funding to gain quicker access to investors

JANUARY 2017 17

INSIGHT

SPRING Startup Enterprise Development Scheme (SPRING SEEDS)Grow your startup with co-investments from SPRING SEEDS Capital and independent strategic parties

Business Angel SchemeObtain funding and commitment from participating business angel investors and apply for matching investment from SPRING SEEDS Capital to take your business forward

Sector Specific Accelerator Programme Leverage financial and industry knowledge for your business in emerging sectors, such as biomedical and clean technology, through co-investments from SPRING SEEDS Capital and appointed accelerators

SME Venture LoanSupport and expand your business by accessing venture loans of up to $5,000,000. Warrants are required

FUNDING YOUR BUSINESS: A GUIDE TO FINANCING OPTIONS

Technology Enterprise Commercialisation SchemeApply for early-stage financing (Proof of Concept grant or Proof of Value grant) to accelerate the development of proprietary technology solutions to market

Do you want to

expand and grow your business?

STARTUP* SMEARE YOU A

*Incorporated for less than 5 years

Do you have an innovative

and potentially market-changing

technology solution?

Do you need to raise early

capital to scale up your

company?

Does your business have high

growth potential and need

alternative financing?

Do you need to support

your business operations?

For more information on startup schemes:

www.spring.gov.sg/startups

SME loans and schemes: www.spring.gov.sg/loan

Loan Insurance SchemeSecure trade finance loans from participating financial institutions

SME Equipment and Factory Loans Access short-term trade financing of up to $15,000,000 from participating financial institutions to purchase business equipment or selected factory properties

SME Micro Loans Finance your business operations with a micro loan of up to $100,000 if you are a small company SME Working Capital Loan Tap on unsecured working capital financing of up to $300,000 to support your day-to-day business operations

JANUARY 2017 17

Whichever stage of growth your business is at, having the right set of business capabilities will make you more competitive. SPRING Singapore’s Capability Development Grant (CDG) helps defray up to 70% of qualifying project costs when you enhance your capabilities to grow your business.

For more information, visit www.spring.gov.sg/CDG today!

TECHNOLOGY INNOVATION

FINANCIAL MANAGEMENT

HUMAN CAPITAL

DEVELOPMENT

BRAND & MARKETINGSTRATEGY

DEVELOPMENT

BUSINESS EXCELLENCE

SERVICE EXCELLENCE

PRODUCTIVITY IMPROVEMENT

INTELLECTUAL PROPERTY & FRANCHISING

ENHANCING QUALITY &

STANDARDS

BUSINESS STRATEGY

INNOVATION

Build Up Your Businesswith the

Capability Development Grant

SME InfolineTel: (65) 6898 1800Email: smeinfoline@spring.gov.sgWebsite: www.smeportal.sg

SME CentresSME Centre@ASMEAssociation of Small and Medium Enterprises (ASME) 167 Jalan Bukit MerahTower 4, #03-13Singapore 150167Tel: (65) 6513 0388Email: enquiries@smecentre-asme.sgWebsite: www.smecentre-asme.sg

SME Centre@SCCCISingapore Chinese Chamber of Commerce and Industry (SCCCI) 47 Hill Street, #09-00Singapore 179365Tel: (65) 6337 8381Fax: (65) 6339 0605Email: enquiry@smecentre-sccci.sgWebsite: www.smecentre-sccci.sg

SME Centre@SICCISingapore Indian Chamber of Commerce and Industry (SICCI) SICCI Building31 Stanley StreetSingapore 068740Tel: (65) 6508 0147Email: sme@smecentre-sicci.sgWebsite: www.smecentre-sicci.sg

CONTACTS

SPRING Singapore is an agency under the Ministry of Trade and Industry, responsible for helping Singapore enterprises grow and building trust in Singapore products and services. As the enterprise development agency, SPRING works with partners to help enterprises with financing, capability and management development, technology and innovation, and access to markets. As the national standards and accreditation body, SPRING develops and promotes an internationally recognised standards and quality assurance infrastructure. SPRING also oversees the safety of general consumer goods in Singapore.

SME Centre@SMCCI Singapore Malay Chamber of Commerce and Industry (SMCCI) 15 Jalan PinangSingapore 199147Tel: (65) 6293 3822Fax: (65) 6293 3905Email: gadvisory@smecentre-smcci.sgWebsite: www.smecentre-smcci.sg

SME Centre@SMF Singapore Manufacturing Federation (SMF) 2985 Jalan Bukit Merah Singapore 159457Tel: (65) 6826 3020Fax: (65) 6826 3021Email: query@smecentre-smf.sgWebsite: www.smecentre-smf.sg

For assistance, you can visit satellite SME Centres located at the Community Development Councils (CDCs), Changi Simei Community Club and Ang Mo Kio Community Centre.

Sales of StandardsToppan Leefung Pte LtdGreat World City East Tower 1 Kim Seng Promenade, #18-01Singapore 237994Tel: (65) 6826 9691Fax: (65) 6820 3341Email: singaporestandardseshop@toppanleefung.comWebsite: www.singaporestandardseshop.sg

Standards CollectionNational Library BoardLee Kong Chian Reference Library 100 Victoria StreetLevel 7Singapore 188064Tel: (65) 6332 3255Email: ref@library.nlb.gov.sgWebsite: eresources.nlb.gov.sg/standards

SPRING Singapore1 Fusionopolis Walk, #01-02 South Tower, Solaris, Singapore 138628

Tel: +65 6278 6666, Fax: +65 6278 6667www.spring.gov.sg