Trax joins Singapore's rarefied unicorn stable

Singapore

TRAX, a Singapore-based startup serving the retail industry, is finalising a deal to raise US$100 million at a pre-money valuation of about US$1.1 billion, a price tag that could make it the second most valuable startup in the city-state.

The company is talking with a few private equity firms and the new funding round is expected to close by the end of June, chief executive officer Joel Bar-El said in an interview ahead of a conference at Singapore Exchange on Monday.

Trax raised US$125 million last year in a round led by China private equity firm Boyu Capital, with Singapore's GIC coming on board later as a shareholder. At its latest valuation, Trax should now rank only behind ride-hailing giant Grab among Singapore-based tech startups.

The new round is aimed at financing three acquisitions. The company recently signed a deal to buy LenzTech Co, a Beijing computer vision technology service provider and direct competitor, for an undisclosed amount. It's also in advanced negotiations to buy a European competitor and a US company, Mr Bar-El said.

The moves come as Trax is planning for an initial public offering in the next 18 to 24 months, he said. The company has long planned for the listing on Nasdaq or the New York Stock Exchange. However, it is now also in talks with SGX for a potential dual listing after the local exchange approached the company, Mr Bar-El said. "We are having a discussion with SGX for a potential dual listing."

SGX has proposed a listing in Singapore first and then in New York, which Trax is reviewing. "New York, for sure, we are going eventually. Now we have grown to a substantial size, both in terms of revenues and the number of people, global spread, we feel that the company is ready for an IPO."

In China, Trax will integrate LenzTech's 110 employees, including 60 research and development staff, with its subsidiary there. Boyu Capital, Trax's second-largest shareholder, was instrumental in helping the company negotiate many aspects of the deal, including the price, Mr Bar-El said.

Trax's image recognition technology is used by global consumer packaged goods companies, including Coca-Cola Co and Nestle SA, to track their products on retail shelves. The company now has 175 clients in 50 countries and counts private equity firm Warburg Pincus as its biggest shareholder.

Mr Bar-El founded Trax in 2010 after a chance meeting in Singapore with acquaintance Dror Feldheim, now the company's chief commercial officer. He said there are advantages to listing in Singapore, where the company has its headquarters along with two co-founders and other senior managers.

Mr Bar-El said Uber Technologies's lacklustre stock market debut won't dampen Trax's IPO prospects. His company has the flexibility to go public any time.

"As long as you have a good company that has a solid business model, blue chip clients and expanding business model, those companies will always be successful," he said. "Trax has always burned very little cash and we provide solutions for a huge industry, the retail industry. We are not intimidated." BLOOMBERG

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