“The average Malaysian Series A investment would be considered a seed round with the regional venture capitalists (VCs) based in Singapore,” he says.
Another interesting difference is in the mindset when it comes to how startups should use the money they have raised. “The VCs I spoke to at Echelon were surprised I still had money from the Series A raised 18 months ago,” says Tay.
While this can be attributed to EasyUni becoming cash flow positive since March, Tay acknowledges that it still would have its Series A cash even if it had not hit that marker.
If he thought his financial discipline would have scored him points with the VCs based in Singapore, he had a surprise coming.
“They all want to see you use your Series A aggressively to grow market share,” he says. Revenue can come later.
Despite his prudent spending with the funding that came from Teak Capital 18 months ago, Tay has still managed to reach some strong numbers and claims he has dominated the Malaysian and Chinese markets.
It is the China growth story that he is mainly dangling in front of investors. He is already acing the market in Malaysia. Revenue-wise, it has jumped 252 per cent year-on-year from 2013 to 2014.
At the same time, EasyUni has experienced a 258 per cent increase in ARPU – in this case, average revenue per university – in the last quarter compared to the first quarter. There has also been a 104 per cent increase in visitor traffic from 2013 to 2014, Tay claims.
While there is no hard and fast benchmark that can be used to verify this dominance he claims in Malaysia, EasyUni’s monthly revenue has raced ahead from around RM30,000 to over RM250,000, with mouth-watering gross profit margins of 80 per cent, he also claims. Headcount too has jumped from five to 23 people.
Coupled with the strong revenue, EasyUni has also firmed up the business model from the time that Teak Capital managing director Chok Kwee Bee invested in them. It has also added a layer of middle management skills that was sorely missing when Tay was running much of the operations.
There is also a multilingual callcentre that operates on a 24-hour basis with Bahasa Indonesia, Bahasa Malaysia, English and Vietnamese support.
So, why is it raising more money today?
China is one big reason, according to Tay.
While it is a major carrot for EasyUni’s next round of investors, “it is also a market no education placement agency can ignore, with 500,000 students a year leaving to study overseas.”
As a result of this yearly exodus, Chinese universities are now beginning to attract international students to their campuses. Tay believes that Easy Uni’s solutions and services provide a fillip to Chinese universities.
Aside from China, he also plans to expand his sales team and to have an in-country presence in China, the United Kingdom, the United States and Australia.
His UK expansion is driven by the opportunity that has arisen as a result of a change in government regulations that prevent foreign students from seeking employment in the United Kingdom after graduating.
This has severely hit the enrolment of students from South Asia to the United Kingdom because students from that region almost always end up working after graduating.
But enrolment is down 30 per cent because of this change in policy and with universities in the United Kingdom suffering from this drop, many are now looking to South-East Asia to help make up the difference. This plays into EasyUni’s products and services.
With multi-market traction, with revenue and interested investors, what’s the end goal for Tay? He feels a listing is a distinct possibility or even a trade sale, likely from an education group. — DNA
* This article was first published here.