Tiger Global-backed Hong Kong start-up SleekFlow, whose software helps retailers manage chats and orders coming from social media platforms, is targeting a valuation of up to US$300 million in its next round of financing, as it sees strong growth in an expanding social e-commerce market.
SleekFlow's revenue grew eight times last year compared to the previous year, and is on track to grow at least four times this year "even during a recession", 27-year-old founder and CEO Henson Tsai told the Post in an interview.
The company offers a platform that lets merchants integrate messages, orders and transactions coming from a range of social media platforms including WhatsApp, Instagram, TikTok and WeChat. It makes money from both charging the merchants subscription fees and taking a cut from transactions done through its platform.
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With more than 5,000 customers including big enterprises and individual merchants, the company projects that in the next 12 months, it can help them process US$100 million in gross merchandise value, according to Tsai.
SleekFlow last month raised US$8 million in a series A funding round from investors led by Tiger Global Management, with its valuation undisclosed. Its growth could now justify a valuation of around US$200 million to US$300 million in the next round, Tsai told the Post. But despite receiving a lot of investor inquiries, the company wants to "stay focused" for at least the next six months, he said.
Tsai, a graduate of Imperial College London, first worked in investment banking after he returned to Hong Kong in 2016. He then founded a food takeaway start-up, but it did not survive a crowded Hong Kong market, especially without enough capital to expand, Tsai said.
With the idea of offering businesses a software that integrates communications from different channels, Tsai initially wanted to target the hotel industry, but realised that hotels are usually very traditional and are hard to sell to. Instead, they received a lot of interest from e-commerce retailers, he said.
Starting the company in 2019 with only two developers, Tsai initially worked alone in areas including sales, marketing, business development and fundraising, he said. His team has since expanded from around 10 people in June last year to more than 60 now, Tsai said.
As more people start to shop through social media platforms, the global social e-commerce market could grow at an annual rate of 30 per cent to reach US$6.2 trillion by 2030, according to an estimate published by Grand View Research.
In China, social commerce and live-stream sales are growing rapidly. Photo: SCMP alt=In China, social commerce and live-stream sales are growing rapidly. Photo: SCMP>
In November last year, Meta, formerly Facebook, said that a survey it jointly conducted with British consulting firm Kantar found that in Hong Kong, 4 in 5 online shoppers use Facebook to inform their purchase decisions, while 3 in 5 use Instagram. Meta, which has made major bets in e-commerce, also operates its own solutions that let merchants manage their activities across its army of social apps, including Instagram and WhatsApp.
But Tsai said SleekFlow's offering is unique because most of its competitors focus on customer support, while its product integrates orders and payments.
Tsai has big ambitions for SleekFlow, which is now present in Asian markets including Hong Kong, Singapore and Malaysia, and is planning to expand to international markets including the UK, Germany, France and the Netherlands.
"We are not just aiming at being a unicorn," Tsai said, referring to start-ups valued at over US$1 billion. "I think for this market we're in, it's possible for us to build the first US$10 billion company in Hong Kong or even in Asia."
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.
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