AImazing, founded in 2015, was groomed by Taiwan-based accelerator AppWorks. AImazing, which set up its headuqarters in Singapore and R&D base in Taiwan in 2017, was about to take off with its acoustic application when regulation changes in the Southeast Asian city state curbed its mobile payment services.
Digitimes recently did a remote interview with AImazing founder Jun Ting to see how the startup has survived that setback in Singapore and how the coronavirus pandemic has changed its fortune.
Q: How did AImazing survive the sudden regulatory changes that hit it hard in Singapore?
A: Looking back at the footsteps of the company in the past five years, the acoustic application was AImazing's third product. We didn't really find the product-market fit until that third product, but this (regulation change) happened. Fortunately, these problems happened at the early stage. If it had been in the B or C round of fundraising, we would have had to face more investors and handle a bigger team.
AImazing was a team of about 10-15 people at that time, and there was no way to continue because of the regulation change. The year 2018 was our low point, but we quickly found a new direction and now still have a team of six software development and data analyticsengineers in our R&D center in Taiwan to remotely support our services. Ou team members in Taiwan, Singapore and Malaysia total more than 30 people, and our market presence has expanded to the Philippines, where our local partners are running the business.
Q: What's your latest products? What is the pain point that you want to solve?
A: The idea of our latest product came from a meeting with Facebook in Singapore at the end of 2018. Facebook was exploring the possibility of working with AImazing, because we do transaction authentication for many electronic wallets. Visa and Master are the companies that have the best grasp of offline spending, but they can only know the total amount of money a user spent at a particular store, not the details of that spending. This inspired us to develop a new idea.
AImazing's business model now is to integrate and analyze offline data to provide merchants with customer loyalty program solutions. Artificial intelligence (AI) and big data technologies are very mature and advanced, but the biggest problem is how to get the data offline. Offline is a very fragmented market, and in Taiwan and Singapore alone, there are probably hundreds of POS systems in operation. Our core technology is to get data from different POS systems and analyze it in a more efficient way.
We built a platform and put all the offline data on it, and we also have our own app through which each company can get offline data. Of course, we still need to obtain the consent of the store first. Our service targets may even be restaurant chains with many outlets using different POS machines. They can put the data on our platform first, and then take the needed data from there. Customers can get clean and uniform data in a single docking. Even AC Nielsen is working with us because data on the cloud can also very confusing. We recently discovered by accident that 45% of our customers are using cloud POS systems.
Q: It seems that AImazing has found a niche and a sweet spot, but in what ways has COVID-19 affected the company?
A: Thanks to the COVID-19, we originally thought we were a "b2B" company and our customers should be big companies. Before the pandemic, we worked very hard to help banks and FMCG companies like Unilever, P&G and hypermarkets do online-to-offline data tracking in real time.
After Singapore imposed a lockdown in April, we added a new feature to our product - a cashback loyalty program solution integrated with Facebook Messenger.
Why do you need this service? Because many stores think they are already digital; after all, they are already using POS, and have joined many cloud-based delivery and cashback discount platforms, such as FoodPanda and Deliveroo. However, when the outbreak occurred, individual stores offered big discounts trying to attract customers to come and spend, but their promotional messages could not reach their customers.
Each company in the market operates its own loyalty program independently. If a store wants to notify customers, they can only do so by phone, or they pay for their own advertising. Our loyalty program is integrated with Facebook's Messenger, which allows stores to advertise on Facebook and send directly to specific customers, enhancing the effectiveness of advertising.
Q: What are your plans for future market expansion?
The pandemic has allowed AImazing to be more aware of what customers really need. People working in the tech industry for a long time may tend to be carried away by their tech prowess, and they are prone to over-design and make products that are technologically advanced but ignore the real needs of customers. Data analysis may be useful for bigger companies whose operations teams can log on to get data and see reports. However, smaller stores may not be able to log on to see the data because of the digital gap or because they are simply too busy to do so.
What this tells us is that we used to think that big data analysis is very powerful, but small stores find it very complicated and don't have the time to learn how to do it, thinking that they only need the simplest monthly report. When we put aside our own misconceptions and responded to the needs of our SME customers by sending simple monthly profit-and-loss reports through Whatsapp's API, the usage rate went straight up.
The product has been so effective in boosting sales that hundreds of stores have joined our platform, and we've seen over 200% growth compared to the pre-pandemic period. We started the year 2020 with a team of 10 and now we have over 30 people. Our cash flow is very strong and will be fine for the next two to three years, and we plan to raise Series A in 2021 to continue our international expansion. But we won't put too much thought into raising capital; we're only looking for strategic investors who can help open another door.
We would have expanded to Thailand and Indonesia in 2020, but due to the pandemic, we are postponing all such plans to 2021. In the future, after the pandemic has subsided, our expansion will still focus on Southeast Asian countries. My goal for 2021 is to increase the number of storesusing our services by 10-fold, with 3-5-fold definitely achievable.
Q: How did you find your partner in the Philippines?
A: Our partner was looking for such a solution, and his father is the co-founder of a big supermarket chain in the Philippines. We spent nine months bonding and getting to know the local market and environment. I traveled to the Philippines for a week every month to determine how to implement our solution there and to develop the business together.
It's worth mentioning that the Internet environment in the Philippines is the same to that in China, where most people skip the PCs and go straight to mobile phones, so their computers are very, very old. The power supply and the network are very unstable, so we had to solve the problem of sudden disconnection of the network service. First we did a proof of concept (POC) to make sure the solution was available locally, and he eventually became our investor. So not only is he running the Philippines operation, but also helping implement and deploy the solution and working with international data analytics organizations.
AImazing founder Jun Ting (left) and two of his core team members