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SPH invests S$2m in data analysis firm for 20% stake
CALL them cartographers for capital markets. From forgotten initial public offering (IPO) prospectuses to daily announcements, Handshakes draws relationship maps to reveal all past and present associations that any person has had with others - all in one browser window.
The data analysis app is owned and operated by DC Frontiers - a tech company which has just brought on its first institutional investor, thanks to a S$2 million cash injection by Singapore Press Holdings (SPH) in return for a 20 per cent stake in the firm.
The brainchild of two former Singapore Exchange (SGX) regulators, Charles Poon and Daryl Neo, Handshakes brings a whole new level of transparency to capital markets.
Where one used to have to trawl through hundreds of disclosure documents just to find out how one person is related to another - a time-consuming, low-productivity task with great opportunity costs - Handshakes automates the process and delivers the information instantly.
It does so first by integrating public information from listed companies' disclosures - some of which go back as far as 1997 - and then by splicing and analysing the data to show a galaxy of inter-connections.
Said Mr Neo, 30: "I think the key problem is that in a disclosure-based regime, once a piece of information is disclosed, then it's deemed that the public knows (about it). And if that piece of information was disclosed a long time ago, or you happened not to read it, or you've forgotten this information - then too bad for you."
That galvanised both Mr Neo and Mr Poon, 39, to build their own knowledge-management system "to solve (their) own pain" when trying to enforce compliance with the listing rules by publicly traded companies.
Both eventually left SGX to work full-time on Handshakes - an app that has since grown to cover not only Singapore, but Malaysia and Hong Kong as well. Handshakes' users include issue managers, corporate lawyers, private investigators and even regulatory and enforcement agencies - anybody with a need to suss out a person or entity, perhaps for due diligence purposes.
Customers can opt for a subscription or the pay-per-use model, with the former priced at S$1,200 per month for one account. This fee is expected to increase as Handshakes adds more countries to its list. Handshakes also offers consulting and research services; fees for these vary based on each customer's needs.
The co-founders estimate that there are "a few hundred" accounts making use of Handshakes's platform.
While neither Mr Poon nor Mr Neo were willing to disclose how much revenue Handshakes brings in, the SPH deal values DC Frontiers at S$10 million. The firm has under 50 staff, with a team representing 11 nationalities.
Said SPH chief financial officer Anthony Mallek: "SPH is pleased to partner Handshakes, which is an innovative young company that is serving a real need in the business community. We look forward to unlocking the synergies between the companies. We also like their ambition to grow and expand their services in the region."
Indeed, Mr Poon said that the S$2 million cash injection will help the company expand its coverage to the rest of Asia. He also foresees data being mined from alternative sources, such as news archives, in the future.
Handshakes has no competitors as yet, and the co-founders are not too worried about a copy-cat. Said Mr Neo: "To be frank, the idea is nothing special . . . The unique thing is the curation - the know-how, the skills and techniques, all the solutions that we've created internally - that's the part that is hard to replicate."
Added Mr Poon: "I think being ex-regulators also helped us when we first started. Being a market regulator, we'd already seen a breadth of companies and scenarios. So we already saw where we should stretch the data and analysis - that already gives us a leg-up over anyone trying to enter the market."