Professional-services firms finding new business among startups

Singapore

MORE professional-services firms in Singapore have set up specialised departments to capture business opportunities from among startups.

At least 11 banking, legal and accounting firms told The Business Times that they have specialised startup units, many created only in the last few years.

Sivi Sivanesan, a senior partner at law firm Dentons Rodyk who heads the firm's Venture Technology and Emerging Growth Companies Practice Group, said: "We are seeing more players in the market."

Ong Sin Wei of law firm WongPartnership said specialised teams like the firm's WPGrow arm recognise that startups' requirements "vary significantly" from other, more mature corporate clients.

Establishing a separate practice group enables law firms to "offer bespoke advice and more personalised services to cater to the changing needs of startups", said Mr Ong, one of the co-heads of WPGrow.

Christian Chin, a partner from law firm Allen and Gledhill, said the services required by startups tend to revolve around a specific issue.

"A more diversified approach usually has to be taken, and more hand-holding and guidance is typically given, to help them navigate regulatory and business challenges across unfamiliar jurisdictions."

For example, startups require legal work specific to areas such as fund-raising and intellectual property protection rights, whereas corporate clients require more in-depth legal work on processes such as due diligence and asset management.

Besides these services, startups also benefit from the connections these larger, more established firms can provide.

Keoy Soo Earn, the regional managing partner of financial advisory from management consulting firm Deloitte South-east Asia, said: "Many startups come to us because we can help them with partnerships to accelerate their growth, access to industry leaders and mentors and access to growth capital.

"To startups, having the connectivity to the ecosystem is crucial," he said, adding that the firm's intellectual asset management advisory team can help startups plug into Deloitte's network for collaboration and partnership opportunities.

Cost is a key consideration for startups. The specialist units often offer these fledgling businesses a chance to engage professional services at lower costs; many offer flat-rate packages and even discounts.

Mr Sivanesan from Dentons Rodyk said this is because the firm is looking to build "longer-term, enduring relationships" with promising startups, which might be enticed to stay with the law firm for further financing rounds.

Jonathan Yuen, the head of Legal Basix, Rajah and Tann's specialised practice that runs services for startups, agreed.

His firm has introduced capped fees and clear fee estimates for companies that come to Legal Basix. This gives startups a "growth-stage appropriate solution that is value for money", he said.

"We provide dedicated solutions targeted at growing companies for smaller, less-complex matters," he said.

Some firms have taken the niche approach a step further, and homed in on segments within the startup and tech universe.

For example, Standard Chartered Bank established a fintech banking business in August 2018. Lucy Demery, the global head of the fintech banking arm, said StanChart is "looking to capture fintech startups, as well as financial and strategic investors in the sector".

Allen and Gledhill, too, has a separate practice that deals with legal services in the fintech space.

Fintech co-head Adrian Ang said the demand for the law firm's advice on startup matters is "very strong", ranging from peer-to-peer lending platforms in 2015 to digital banking and payment services this year.

"We may establish a separate unit in the future if it helps our clients more easily identify whom they should reach out to for assistance," he said.

Firms that have jumped on the startup bandwagon sometimes find themselves getting more than just business from being close to innovative clients.

"The benefits are multifold," said Patrick Yeo, a partner at accounting firm PricewaterhouseCoopers (PwC) and the leader of their Venture Hub arm.

The "added intangible benefits" include being able to identify up-and-coming trends, engaging with the startup ecosystem and being exposed to new mindsets.

PwC Singapore's Venture Hub has expanded from a two-man to a 15-man team since its inception in 2016.

OCBC Bank established its start-up segment unit in October last year. Christie Chu, the bank's head of Emerging Business and Commercial Banking Cash, Global Commercial Banking, said the bank is the choice of more than half of Singapore start-ups.

"We understand that starting a business can be a confusing and frustrating process for them. Running a business also means dealing with administration matters like accounting and payroll, with which many are not familiar," she said.

"This gives us an opportunity to address their wider business needs - beyond banking. Having a dedicated start-up segment unit enables us to continue discovering new gaps, develop insights and identify opportunities to help businesses start more easily and to support them in their growth journey with banking solutions and beyond."

A DBS Bank spokesman said: "Startups... have good ideas and solutions that we can tap."