Excelpoint seeks growth in R&D acquisitions

WITH more than 31 years of experience in the electronics space, mainboard-listed tech firm Excelpoint Technology has reached a new stage in its growth.

The group, which provides "value-added" electronic components with integrated research and development (R&D) capabilities, is setting its sights on mergers and acquisitions - technology firms, in particular - as part of its strategy to propel itself into the future.

To this effect, the group started its entrepreneurial and investment arm PlanetSpark this year, with an initial commitment of S$5 million to invest in early to mid-stage startups in Singapore and Asia that are related to the Internet of Things (IoT) ecosystem.

Excelpoint chairman and group CEO Albert Phuay told The Business Times: "Investing in startups has always been in our hearts, as many of them have very good R&D that could be commercialised. This year, we really wanted to do something about it, so we started PlanetSpark."

"The first criteria we look at is the companies' R&D. Startups have their strengths, which is technology...We believe we can tap on their tech to complement our own."

In turn, the group aims to help these startups scale up and get into the market faster with its resources, domain expertise, and a strong global presence.

The idea behind PlanetSpark - to collaborate and create a win-win situation for both Excelpoint and the startups - came from Mr Phuay's eldest daughter, deputy director of corporate development, Phuay Li Ying.

She will be leading the charge to "hunt" for such promising firms that could add value to the business.

She shared that the group recently made its first investment in Singapore-based chip design firm CLOP Technologies (CLOPTech), a spin-off company from A*Star, for a sum of S$300,000.

"CLOPTech has a lot of deep tech knowhow in semiconductor chip designs. Their tech can be used in video streaming, surveillance cameras and so on," Ms Phuay explained.

She added that its focus on wireless solutions and smart connectivity in particular is what caught their eye, as it will provide the group with a strategic edge in the emerging IoT segment, which is the direction in which the group is looking to expand.

"Internally, we have identified our strengths within IoT as sensor modules, wireless modules and gateway modules. These can be used in different areas such as smart buildings, smart farming, geoponics, and smart infrastructure. Internally, we are growing these areas," said Ms Phuay.

The duo explained that there is a "gap" in the IoT ecosystem.

"In most cases, MNCs (multinational corporations) look for software start-ups, or applications, which are also complementary to the technologies they have created," said Ms Phuay.

But there is little interest in the hardware and module development stages up till the gateway, which is a key component.

Hardware start-ups also do not always tick the typical boxes that multinationals look for, such as rapid growth, customer database acquisitions, high and quick return on investments, and so on, she explained.

This is where PlanetSpark aims to plug the gap, with investment quantums of around S$300,000 to S$500,000 to help each startup move up to the next level, with the ultimate goal of enhancing the entire IoT ecosystem and growing the pie.

Ms Phuay added that monetary funding is just part of the whole package that Excelpoint is offering startups.

These promising startups are able to leverage the group's R&D capabilities to develop their products and accelerate their growth, she says.

Excelpoint takes its innovation very seriously, with two R&D centres in Singapore and China. The group is planning two more in India and Vietnam.

Ms Phuay pointed out that many startups spend a lot of their time working on the technology, fabrication, and R&D "without knowing the market need and requirements". This is where a larger firm such as Excelpoint can fill in the missing pieces with "value-added information" that the startups can take to market more efficiently, she said.

The group also hopes to help these startups go abroad eventually by acting as a bridge.

"We have the footprint, especially within the Asia-Pacific region, which has many promising opportunities," said Ms Phuay.

"With our deep roots into the different emerging markets, we can then bring these technologies in, and the barriers for their entries can be reduced with our connections."

More MNCs are focused on the larger markets such as the US, which are already saturated with many new start-ups and technologies, she observed.

With trade tensions brewing, the group is keeping a watchful eye on global developments that could potentially impact them. Currently, 60 per cent of their business is in China.

"To date, we have not seen any impact from the US-China trade tariffs - but that does not mean that it won't happen in the future," said Mr Phuay.

"If things go bad, we foresee that it is a lose-lose situation, not win-win. We hope the two countries will compromise."

But despite global uncertainties in trade, the group has no plans to slow down yet.

Mr Phuay strongly believes in the need to plan ahead regardless of the current situation.

He noted that Excelpoint started on Bluetooth technology in 2003, a decade before the technology became widely accepted.

Aside from IoT, other areas that Excelpoint are exploring include artificial intelligence, the automotive industry, and robotics.

"Whatever we are enjoying today is due to investments made 10, 20 years ago. We are in this for the long haul and we will continue to invest in these areas," he said.