Phnom Penh based payment aggregator Clik Payment has announced they are in fresh talks with investors to secure $1 million in bridge financing to launch commercially after receiving their Payment Service Provider license in January this year.
The company first entered the market in 2016 after raising $3.9 million with Southeast Asia’s largest-ever Seed round funding for mobile payments, loyalty programs, data visualization, business intelligence, and cloud data services.
However, ongoing delays with the National Bank of Cambodia (NBC) for depositing the required $2 million coupled with COVID lockdowns in early 2021 have severely delayed the company’s launch now expected for later this year.
Speaking to Cambodia Investment Review Clik Payment Chief Executive Officer Matthew Tippetts commented on the launch delays stating: At the time, we were confident that with the platform built, we would be able to quickly obtain the final requirement for the license.
“We were required to put $2 million into our NBC account and we didn’t have that amount of cash on our accounts. Being a startup, raising funds is always challenging; having to raise it just when the COVID crisis hit slowed us down immensely however, we finally managed to raise the money and thanks to great partners, we completed that requirement,” Tippetts said.
“We are extremely grateful for our partners and the NBC who helped us obtain our license by January 2022. It has been a challenging time however we have hopefully been through the worst of the difficulties most independent startups face,” he added.
$1 million in bridge financing required for Clik Payment
However, this ongoing delay has resulted in serious financial constraints for the company now seeking bridge financing to launch commercially and start reducing payables.
Clik Payment Chief Financial Officer Alan Dy did not reveal the amount of debt the company was in however said: We are in the process of raising a $1 million bridge financing which will enable us to launch and give us the time to raise the Pre-Series A.
“There is also a $4 million round which we are raising. The Pre-Series A will cover all Clik funding needs in Cambodia until those operations are cash-flow positive. We are in advanced discussions with investors for the bridge, in addition to a strategic partnership with a software development company,” he said.
“We also have two corporate investors which have shown interest in taking a significant portion of the Pre-Series A. This explains why we are confident in launching in the third quarter of 2022,” he added.
In response to questions raised on any potential reckless spending by senior management on operations or staff costs, Tippetts replied: We were and are not reckless with any investor funds.
“By building the platform in Cambodia with a team that believed in our vision, we were able to be more cautious with investor funds than we would have been had we developed in Singapore or Europe which would have required two times more investment,” Tippetts said.
“The majority of the team were willing to take modest salaries to be an integral part of creating something that would benefit Cambodia and other countries. There was only one person who, with Board support, was very well paid as it was believed that their industry experience would be a great support to the launch of Clik Payment,” Tippetts said.
Tippets added: In fact, to be even more cautious with investor funds, for the majority of their tenure, this individual was only employed part-time. Our next highest-paid employee was paid 60% less than the aforementioned individual and the latter employee’s salary was double that of mine.
Alan Dy agreed with Tippetts adding: The fact that all the senior management who have been with Clik Payment for the last three years and some since the beginning are still committed to launching Clik Payment is proof of this.
On the question of repaying outstanding debt, Tippetts says that he is committed to paying staff and suppliers and has always done the best he can to date adding “the only way for us to repay staff and suppliers now is to raise funds and launch, which we are now in the process of doing”.
“We feel that we are in a much better position to raise funds now that the worst of the COVID crisis is hopefully behind us. The Cambodian Government has done an amazing job at managing the situation, getting people vaccinated and re-opening the country. More importantly, we have the PSI license, which was a key condition for many investors,” Tippetts said.
“Investor due diligence do take time, but we do have multiple investors in due diligence and have signed agreements with very significant banking, microfinance and distribution groups showing that our solution can bring value to the market and our merchants. This is why we are confident in raising funds,” he added.
Clik Payment seeking new investors
Clik Payment has not revealed all its early investors however two of the well-known financiers were Openway, a global vendor of payment processing platforms and Poems Pte Ltd, the investment holding company of Singapore financial house Phillip Capital Pte Ltd.
Among other participants were several global angel investors, a third of which are Cambodia-based the company said.
In response to how many of the current first round of shareholders have been willing to refinance and commit capital to this next round of fundraising Alan Dy replied: A large portion of our Seed round investors have committed to our bridge financing.
Cambodia Investment Review has been informed that Phillip Capital has declined to reinvest in Clik Payment. However one of the early investors Phil King told Cambodia Investment Review that he has reinvested in the company stating: I have already committed to bridge financing, as have other Clik current investors.
In response to questions on how the company will position itself in a market some now consider saturated King said: I’ve been in financial technology for over 30 years and have invested in more than 30 FinTech startups.
“What attracted me to Clik Payment and still does, is that it is positioned as an infrastructure platform, in essence, the ‘plumbing’ of the payments system, supplemented by much needed and value-adding highly differentiated features (e-KYC, data insight, loyalty tools, access to instant credit, micro-targeted marketing),” King said.
“These ‘data monetization’ tools should assist businesses to grow profitably. The value they will bring to their merchants, financial institutions, and consumers differentiates them from payment companies (PSIs) which only focus on payment, which is increasingly a ‘commodity service’ and is hence very competitive,” he added.
King also commented: that the company’s business model and positioning as a payment aggregator have enabled it to establish successful partnerships with others in the space who might ordinarily have been competitors.
“I am not concerned about the competition. Competition is healthy and few if any can spin on a dime and change their business model nor will they be as nimble and flexible as Clik Payment,” King said.
His response to other potential investors looking to invest: Infrastructure and platform players like Clik Payment focus on the ‘plumbing’ of a major ecosystem such as payments and hopefully South East Asian payments can become quickly scalable. With that scale comes value.
“Using Cambodia as ‘the platform’ for that international expansion is expected to be the key driver in creating superior returns. Clik is well-positioned to make that a reality once the funding is in place,” he said.