By Eva Ng and Wong Ka-Chun
Wizpresso, a homegrown software-as-a-service (SaaS) provider in Hong Kong, plans to rope in strategic investors in a renewed pre-Series A round, to pave the way for its intended entries into new markets, said founder and Chief Executive Calvin Cheng.
The software developer, which offers research, due diligence and reporting services particularly for capital markets workflows, aims to raise USD 5m-USD 10m by offering no more than a 15% stake on a post deal basis, he said.
The potential capital raise is scheduled for launch in the first quarter of 2024, and completion by the second half of the year, he said.
Financial institutions and technology companies with a strong presence in China's capital market, or potential for partnerships to develop new products or to increase its client base will be favored, he said.
The startup has targeted mainland China as its next market, due to high-quality disclosures from Chinese regulators, which will drive the adoption of regulatory technology, he said. Apart from mainland China, the company is exploring potential entries into Singapore, Australia and the UK, where there are sizable wealth, similar regulatory requirements and existing partners, making it easy to scale up, he said.
Proceeds will be reserved to increase its market penetration into China and other potential markets, he said. It has a team of 30-40 staff, of which more than 60% are software engineers, data scientists and other technical employees, he continued.
Cheng will continue to hold a majority stake in Wizpresso after its two USD 1m-simple agreement for future equity (SAFE) note rounds, which happened in 2020 and 2022, respectively, are converted into equity, he said. Notable investors include CoCoon Ignite Ventures and a number of family offices and angels, he said.
According to this news service's report in September 2020, it was looking to raise USD 3m-USD 5m in three years via a pre-Series A round.
But that didn't materialize as intended. Cheng said the company is flexible with the timeframe as its priority is to bring in strategic investors with established channels in capital markets to co-create solutions.
When asked about an exit strategy, Wizpresso has a long-term growth plan and is open to various options, including joint venture formations or spin-offs for its products, he said, without elaborating further.
Since Wizpresso's operations started in 2018, Wizpresso has enabled professional parties to find, extract and annotate unstructured documents including company disclosures, regulatory filings and transaction documents to streamline capital market workflows, he said.
Its four flagship products comprise an investment research tool Discovery, an IPO verification tool Factify, a document automation tool Compose, and a newly-launched data labelling and modeling tool Adnoto, according to its website.
Its targeted clients include banks, law firms, investment funds, listed companies and others in the capital market, he said.
Positive Outlook Despite a tough IPO market globally, the company is still confident in its business as it aims to build an infrastructure that makes information more transparent and accurate for investors over the long term, Cheng said.
“IPO market is just a part of the capital market lifecycle. We see a lot of demand for technology amongst listed companies in streamlining annual and ESG reporting, especially when the reporting requirements are increasingly complex,” he explained.
Cheng admitted macroeconomic uncertainties have clouded the whole industry’s financing plan and outlook, especially for the cash-burning business-to-customer (B2C) companies.
However, he stressed that impact toward Wizpresso from macro headwinds has abated as it mainly targets enterprise clients and has a sustainable organic growth in the past few years.
Wizpresso, which has achieved positive operating cash flows, aims to grow revenue 3x this year to USD 2m-USD 3m, he said, declining to provide further specifics.
The company operates several SaaS models and charges its clients a yearly subscription fee, he said. Its subscription services have more than 90% retention rate, he also said.
It could not identify a direct rival in Asia, as its services combine market intelligence, workflow automation and team collaborations, he explained.