Synagie to raise net proceeds of $9.8m in Catalist IPO

Mr Clement Lee, chief executive officer of Synagie, with executive directors (from right) Zanetta Lee and Olive Tai.
Mr Clement Lee, chief executive officer of Synagie, with executive directors (from right) Zanetta Lee and Olive Tai.PHOTO: SYNAGIE CORP

Local e-commerce solutions provider Synagie Corp has priced its initial public offering (IPO) at 27 cents a share with the aim of raising net proceeds of $9.8 million.

The offering comprises a placement tranche of 39.2 million shares and a public offer of 3.8 million.

Synagie will be listed on the Catalist board with a market cap of $70.7 million upon its debut.

The public offer closes at noon on Aug 6, with trading to commence at 9am on Aug 8.

Synagie was founded by chief executive Clement Lee and executive director Olive Tai in 2014.

Mr Lee was the CEO of nightclub operator LifeBrandz from 2007 to 2009, and its executive chairman from 2009 to 2013. From 2013 to 2015, he was the CEO of Avenza, which sells weight-loss and health supplements.

Ms Tai was a trading director at Watsons Singapore from 2011 to 2014, and a former managing director of Avenza.

Mr Lee's sister, Ms Zanetta Lee, is also an executive director.

Synagie's cloud-based platform was launched in August 2016 to help brand partners like Johnson & Johnson, Kimberly Clark and Shiseido distribute products in online marketplaces.

The Synagie dashboard allows users to monitor their orders and sales across the various online marketplaces like Lazada and Qoo10 in real time, and watch consumer buying patterns to manage inventory or adjust their marketing strategies.

Synagie made a net loss of $3.4 million last year, widening from a net loss of $2.3 million in 2016 on higher staff costs, warehouse rental and handling expenses and professional fees in relation to the IPO.

Revenue jumped to $8 million last year from $3.7 million in 2016, as it added 77 new brand partners bringing the total to more than 250. E-commerce revenue was $7.2 million.

 
 
 

Synagie sells goods on an outright purchase basis and on consignment. Last year, roughly 28 per cent of sales were done on a consignment basis, where margins are lower. E-logistics revenue was $817,000 last year.

Synagie offers on-demand warehousing and last-mile delivery services by outsourcing the work to Ceva Logistics, SF Express and SimplyPost.

The products that Synagie markets are targeted for sale in Singapore and Malaysia. Singapore accounted for 99.9 per cent of e-commerce and e-logistics revenues last year. Synagie set up operations in Malaysia at the end of last year.

On a pro forma basis, Synagie made a net loss of $2.3 million, on revenue of $12.3 million, after accounting for new insurtech business 1CARE Global acquired in April for a cash consideration of $3.3 million.

Insurtech is basically an extended warranty business that Mr Lee hopes will help Synagie move into the electronics segment. Oppo is one new brand partner that came on board this year.

Synagie is priced at 5.75 times sales based on the group's pro forma 2017 results and a market cap of $70.7 million

After the IPO, Mr Lee will own a 23.7 per cent stake in Synagie; Ms Tai, 3 per cent; and Ms Lee, 3.5 per cent. Seed investor Centurion Private Equity will retain an 11.6 per cent stake.

Separately, 41.2 per cent of Synagie will be split among 24 other pre-IPO investors.

A version of this article appeared in the print edition of The Straits Times on July 31, 2018, with the headline 'Synagie to raise net proceeds of $9.8m in Catalist IPO'. Print Edition | Subscribe