HeveaConnect raises US$5.5m in Series A round

AGRI-COMMODITIES trading platform HeveaConnect has raised US$5.5 million in its Series A funding round led by Provident Capital Partners, DeClout Ventures and its own management. The management team bought in with its chief executive officer to own a more than 3 per cent direct stake in the company. (see amendment note)

“Proceeds from the investment will be used for working capital, technology development and continued business development in natural rubber industry as well as expansion into other agri-commodities,” said HeveaConnect in its press statement.

As part of the round, existing shareholder Halcyon Agri sold about US$1.6 million worth of shares to Precise Goal Group, a wholly-owned subsidiary of Procap Sustainables, which is further an affiliate of Provident Capital Partners.

The proposed disposal, Halcyon Agri said, is in line with the company’s commitment to reduce its stake in HeveaConnect and for HeveaConnect to demonstrate its independence from any of its shareholders in their effort to accelerate industry-wide adoption of the HeveaConnect platform.

The share disposal is not expected to have any material effect on Halcyon Agri’s net tangible assets per share and earnings per share for the financial year ending Dec 31.

Post-investment, HeveaConnect would also be undergoing a restructuring exercise, to create a “wholly-owned subsidiary focusing on natural rubber”, where all existing products related to natural rubber would be licensed to the new entity.

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The subsidiary will see the set up of a board of advisers (BOA), consisting of an equal number of sell and buy side customers, to help “ensure data integrity, transparency and promote the adoption of the platform”, said HeveaConnect.

“This structure paves the way for future expansion into different commodities, with each commodity having its own products to be housed in a separate subsidiary with separate BOAs,” it added.

Said Ng Eng Kiat, managing director of Halcyon Agri’s global tyre major platform: “We have incubated HC (HeveaConnect) as a corporate venture together with our other founding shareholders and supported it through its infancy stage. The initial phase was challenging for HC as it faced resistance to change.

“However, since the pandemic, there has been an increase in technology adoption and HC’s sustainability suite of tools has gained traction with key customers within the industry. We are happy to see the traction that the HeveaConnect platform has gained... (and it) is now poised to excel in its next phase of growth.”

Some of HeveaConnect’s shareholders include SGX Group, DBS and Itochu Corporation.

*Amendment note: A previous version of this story incorrectly stated the value of the Series A funding round. Halcyon Agri has since clarified that it is in fact US$5.5 million. The reference on its remaining stake was removed due to lack of clarity.