EP 349 – Is the Retail Industry Ready for the Digital Revolution? – Daniel Lim – Founder & CEO of Pi-xcels

Read the best-effort transcript below (This technology is still not as good as they say it is…):

Michael Waitze 0:00
Hi. This is Michael Waitze, and welcome back to the Asia Tech Podcast. We are joined today by Daniel Lim, a returning guest, the Founder and CEO of Pi-xcels. Thank you so much for coming back to the show. Do you remember we published our first conversation with you in November of 2023 so yes, like our audience knows you, but I feel like that was yesterday. Does it not feel like yesterday to you as well?

Daniel Lim 0:49
Yeah. I mean, the startup will put you in a position where you think time flies by really quickly. It’s almost a year. And, yeah, it’s crazy, right? It’s been almost a year. Unbelievable.

Michael Waitze 0:58
It’s more than a year. So when we spoke a year ago, you I went back and I looked at it right? We were focusing on partnering with payment device manufacturers and other industry players, right, to embed technology into existing systems. I remember that was, like a big theme you talked a lot about, like, we don’t want to disrupt stuff. We just want to make everything better, right? I get it So at a high level, right? Year on, what were some of the difficulties that you encountered just trying to implement transformational technology in what seemed to me to be like a fragmented retail space?

Daniel Lim 1:30
Yeah, I mean, I think it’s still a challenge. But the beauty of it is that even though we’ve came up with a lot of challenges, people are just gravitating to the whole concept of a digital experience, even in offline space, as well as the whole environmental concerns built around cop 2728 and the fact that our EVCs represent a disposal or the fact that you can stop Using paper during the checkout process. And so a lot of what we’ve done in last year not that our service is out there yet, but a lot of what we’ve done in the last year is kind of educating our potential clients. And now we’re in a position where we’re about to launch our service in the early parts of 2025 with a number of retail well, not retailers, but payment service providers as partners to their retailers in the early parts of 2025 and multiple jurisdictions globally, which is kind of the cool bit, because it’s not just happening in one location. Which is what most startups tend to focus on, is that they want to focus on one geographical location, launch their service and make it big in that geographical location before right kind of exporting that service out. What we’ve done is that we’ve kind of worked with international companies and international device makers, and put in the infrastructure such that when we have conversations, it’s the same conversations, you know, anywhere in the world. And then the fact of the matter is, the most progressive PSP companies, or payment companies, would then start the composition with us, and they already have in mind a set of customers that they want to showcase the solution to, and that’s why we this is sorry, go ahead. Sorry, I

Michael Waitze 3:13
was gonna say, but this is different, though, right? Because I want to dig a little bit deeper into this, right, particularly from a startup founder perspective, the way you’re doing things is like a little bit in reverse, right? Because you’re embedding your stuff into somebody else’s product. You can literally be overnight wherever they are, right? Because they’ve already done all the localizations, done all the stuff that they have to do. Whereas most founders say, I want to be great in Vietnam, and once I can become great in Vietnam, I’ll expand to the Philippines, Malaysia, Indonesia, Thailand, whatever. Yeah. And what you’re saying is, if I understand this correctly, because your partners are already global, or at least regional, wherever they are, just give it to them. They can boom overnight, just be there. Is that

Daniel Lim 3:57
fair? Yeah, yeah. And, but that’s where the challenge is, right? Because, yeah, all these really big companies, big international companies, move at a very different pace. They’re not comfortable with moving at the pace that you want to move, which is kind of the startup space moves at a much, much, much faster space. And they like to make sure things are okay, because their clients are also international, global clients, right? So we’re talking about international retail companies, companies that have image and brand names and they need to uphold but that’s also working for us, because the image is a function of the fact that they want to work towards a more environmentally friendly solution. At the same time, re engage their shoppers, which is what we kind of do. At the same time, they need to move at a pace where they’re comfortable with and that’s kind of the challenge, and the, you know, the back and forth that we need to manage, and that’s kind of also the reason why we are venture funded. It’s that our technology is quite advanced, but at the same time, we don’t have. The, you know, capabilities to move at the kind of speed that most startups do. And so we are venture funded because we have to adhere to the speed in which all these big international companies move at, yeah, and so that may not be something that the venture world’s actually comfortable with, right? You

Michael Waitze 5:17
know, I want to get to that. I want to get that a little bit later, if you don’t mind, sure, because as you’re rolling this out, right? I think, if I remember correctly, we talked about this idea there’s more than one device maker, right? And I know that’s obvious to you, but maybe to the people that are listening don’t necessarily know that, right? When you walk into a store, sure, you see one or two of these things, but you don’t know who’s making it or what the deal is with it. How hard is it to get, like, competing device makers to still work with you when they know that the other guy is still doing it? Do you know what I mean? Because that’s

Daniel Lim 5:49
tricky. No, no, actually, that’s the counter intuitive portion. Is because the other guy is doing it and they’re scared that they don’t have it, or they’re afraid they’re doing it’s formal, right? Like, that’s actually where it becomes a startup thing. It’s actually a FOMO, like, once one device maker has it, the other device maker that is incumbent or dominant player has FOMO, and then they go, we need to have it. But I think what really sets us apart, and why this is kind of important, is that we have an IP mode, so we have this technology patented, and we have three patents. We have one registered patent, two pending patents, and our registered patent is going through a patenting process, or pending patenting process, in multiple countries and jurisdictions. It’s already accepted in three major countries, Japan, Korea and the US. Okay, it’s going through patenting processes in, you know, EPO, which is the European Patent Office, and so on and so forth. But the idea behind it is that, because we have this mold. Nobody technically can copy us. And because of that, we work with the device makers, giving them access to this technology by kind of like a technology provider. And what we did was we didn’t just approach device makers, we approached their clients. We showed their clients this solution, right? And one of the classic examples, and I can’t name names here, obviously, because I’m covered under NDAs, sure, but one of the biggest device makers had two of the most big device, sorry, one of the biggest PSPs, which is the payment service companies. Yep, have two suppliers as payment device suppliers. So most good payment service companies actually buy devices from two companies, and when they realized that we have working with one of them, they went, why are you not working with the other one? And they go, like they’re not talking to us. And then they made the introduction, and then we’re actually closing an integration deal with them. So in a way, our potential business partners, or our potential customers, are forcing the infrastructure players, or infrastructural players to play well with us, and then that company realizes we’re doing it with his competitor, and then go, I guess we need it, because our customer wants it, but so kind of, that’s how it works. But

Michael Waitze 7:59
did this surprise you? I I know I’ve said this. I said this a couple of minutes ago, like I feel like they’re competing with each other, but there is a little bit of FOMO with views explained. But again, I feel like your model is, like, reversed from most other models, where they want, like, an exclusive distribution, and they don’t want you to work with the other guy. But in this case, you’re saying that technology is so good that if we don’t have it, we’re gonna fall behind, right? It’s like having a propeller engine as opposed to a jet engine. Like we want the jet engines too. No, yeah,

Daniel Lim 8:26
that’s a little bit like that. I wouldn’t call us a jet engine, so let’s not

Michael Waitze 8:29
oversell the company. But I’m just trying to make an analogy. Yeah, I understand the

Daniel Lim 8:33
analogy, but the idea behind it is, yeah, and I think it’s also a functional fact that the customers want it and they don’t want it yesterday. They want it, I’m sorry. They want it yesterday. Yeah, they don’t want it tomorrow. I think that’s kind of why this has gravitated so since we last spoke, we only had one device maker that we worked with. We now have up to five. What does that mean? And they control about 70 to 80% of the payment devices. Or they their footprints. The current footprint in today’s global market is that they supply 70 to 80% of the devices in the world. Wow. So hopefully, by the end of this year, we would have our footprint in about 40 million devices. And every year, our footprint is going to grow by anywhere between 40 to 70 million devices. Do you ever so we sorry, did you ever sleep? No. So the idea behind it is that we could have our service in about 100 to 200 million devices by the end of 2026 I mean, it’s a footprint. Doesn’t mean every customer will turn it on, but means that we could launch potentially in up to 200 million devices by the end of 2026,

Michael Waitze 9:41
how many of these devices are there out there? Just so people can get a sense of scale, because 100 200 is a lot, but if I think about like all the retail places, all the duplicate number of devices that are out there like this could be hundreds of millions of devices. No, we

Daniel Lim 9:57
did some statistics. Nothing. Uh, that we can scientifically prove. I get it. I get it. But I’m just curious for scale, yeah, yeah, so, but in modern OCD countries, we’ve realized that the ratio of the number of payment devices to the population tends to be one payment device anywhere between 16 people in population to about 24 so let’s call it one in 20,

Michael Waitze 10:20
so one in 20. So let’s do a little bit of math.

Daniel Lim 10:25
Don’t have to. I’ll do it for you. Okay, so there are three in Singapore, 5 million. Yeah, Singapore is 5 million, right? So you’re talking about 200 ish million devices, 200,000 devices. But that’s just in Singapore. Yeah, that’s in Singapore. So Japan number has proven correct. It’s actually 6 million devices. 120 5 million people. Yeah. In Spain. Go ahead. Yep. In Spain, we know the population circa 47 let’s call it 50 million. We know of at least 2.3 million devices in the market. We know France is about 70 million people, give or take. So we know of at least 3 million devices in the market, yeah. So the number has held out in a lot of countries, so we now do that ratio is one is to 20, but these are all OCD countries, right? So countries like Indonesia, that number might not hold because they don’t have a lot of credit card acceptance locations, right? So, but if you think about it rough, ratio, will 6 billion people take away about two and then we’re talking about anywhere between 200 to 300 million devices globally? Yeah,

Michael Waitze 11:30
I just did the math. So there are about 1.5 billion people in the OECD countries. If it’s 20% of that, it’s 300 million devices. Yeah, pretty simple math. Okay, so the scale is huge. I didn’t even realize that the last time we talked, wow, that’s a big number. So have you, has the product changed in the last year? Like, what other kind of development have you done? Or have you just been out there trying to get the device makers to do it, and trying to raise money, trying to get more retailers on your side? Like, what’s what have been some of the biggest changes in the past

Daniel Lim 11:59
year? Um, so the product hasn’t changed very much. We still do it the same way. The way it works is still as per our website. Go in and have a look. We’ve added news device makers, and every time we add a new device maker, they want us to announce it so that the world knows, or their customer knows that we you can use our system, which is kind of great. It keeps everybody’s on their toes, which means that our current incumbents, who are really working with us, we want to work harder as well. We try to make the agreements between all of them equal. So we don’t try to disparage one device maker over the other. We don’t give special deals to one and not give it to the other kind of thing Fair enough. And that’s how, how we kept and we keep the level, the level, the few level, right? We don’t want to give any slight advantage, like one of our partners would say, We work quite closely, closely visa. And there’s this guy in visa that I love quite a bit. He likes to say we are ecosystem builders. Visa is an ecosystem is a payment ecosystem builder? Yep. So I like to take that mantra I learned from the best, right? These are some of the best payment companies in the world, if not the best, I would say I’m learning from them. I want to be I want to develop the ecosystem. So when I work with all these device partners, I go, we’re here to develop the ecosystem for post purchase, VAs or post payment, Bas, we’re here to develop a service for merchants that is equivalent for all merchants, as long as they work with the best of the best, right? I won’t work with all the device makers, because then there’s no competitive advantage that I give to the ones that I work with, but I work with enough to give them a competitive advantage. And I want to work with the best. So I do work with the best. There has been requests since our last conference. In the last conversation, I was knocking on people’s door to get them to integrate with my system. Yeah, now people are knocking on my door to ask them to integrate with my system, and I’m telling them I can’t really don’t have time, I don’t have resources. Oh, it’s the script has flipped a little bit, which is kind of nice, which means that we’re doing what we do correctly, right? It’s kind of, this

Michael Waitze 13:55
is one of those, and that’s the high quality problem. Sorry,

Daniel Lim 13:58
yeah. No, no, it’s, uh, I’m she and from hustle fund, one of our investors always say, if demand is being put, there’s so much demand that people are pulling you from your nose, you know, you got it right. So that’s how I like to think about it. So at least from the device maker front, I think we have the right demand, so it means that we have some level of product market

Michael Waitze 14:16
fit. So did I know this last time that you just said she on, right? So that’s the hustle fund, yeah, yeah. Are they early investors in your company? Very early. So were they, did you do that $25,000 thing where they’re like, can we work with you? Yeah,

Daniel Lim 14:31
yeah, she and, bless her heart, right? Amazing. Love her to death. She’s amazing. She, I spoke to her in 20 minutes. We didn’t have any device makers. Then it was just that. Just that white device that you saw many, many years ago, she put in 25,000 and that’s last time right now, I think the minimum check size is 50,000 but back in the heyday, it was 25 she wrote me a check in 20 minutes. I mean, bless her heart. And then subsequently, on our next few rounds, including this round, I. Um, she’s topping up. Okay, we’ll, we’ll

Michael Waitze 15:01
talk about that too, but, but you mentioned something, and I want to talk about investment in a little bit, because I do think it’s really important, particularly because the runway for the stuff that you do just takes time, right? Um, yes, you mentioned cop 27 and cop 28 Yep. And I really want to get a sense for how much the retailers really are focused on and the device makers as well, because you brought it up, like, I didn’t ask about sustainability, right? And I do know that, you know, normal receipts, you get a piece of paper. I never want it. Never, ever like I can’t wait, no, but I’m not kidding, like I never wanted I don’t know what. Wouldn’t know what to do with it. I’d much rather scan it and do the thing we talked about last time, and maybe at the end you can just refresh people’s memories. But how focused are they on this sustainability part, both the retailers and the and the device makers.

Daniel Lim 15:52
So the funny thing is that I don’t think the payment industry and the device makers were focused on it, but I think the retailers were really and I think that has gravitated down, right? Because the retailers are people that the device or payment companies need to tell their services to, right? They’re their ultimate customer, right, right? So the customer wants it, then how do you deal with it? Right? And I think it started, I think it’s also about timing, like we started the company in 2019 I think if COVID didn’t happen, if cop 27 cop 28 didn’t happen, I don’t think the company will be where it is today. But I think because of all this, the need for contactless, the need to essentially be more sustainable, to build a better future, retailers start to care about it. And then now it’s filtered down to the payment world, and quietly between you and me, we have been pitching to this payment company. And I know it sounds like a very long time. They’re very interested in the product. They just need time to go through their paces of how they do things. But they have already instituted an initiative in their company. They need to have some check boxes ticked when it comes to sustainability, yeah. And obviously what we do is really quite low lying fruit, right? You can really get this out the door like easily. And the very funny thing is that they actually cannot accelerate e waste in the process. So they can’t switch out all their terminals, right? Just so that they can use our service. Crazy thing, your current devices, a large proportion of your current devices can actually do our service. They just need a firmware can they just need a firmware update? We’re talking about, like a global company spread across the US and Europe. We’re talking about like, millions of devices.

Michael Waitze 17:41
So, yeah, I mean hundreds of millions of devices. We talked about, wow,

Daniel Lim 17:45
that this particular company has a few million devices. The idea behind it, if I can get just 10% their devices to turn it on, the company is profitable, right? But the idea behind it is, that’s the fun bit, and this is not. And I asked them, Is this a company directive, and they go, No, this came from their retailers. They need to fulfill their retailers requirement. And therefore they decided, might as well just make it a company wide initiative, because it’s coming from so many online customers. So I think because of that, they’re the biggest buyer of payment devices. It’s filtered down to the payment device makers. It’s just that simple, but it’s going

Michael Waitze 18:20
to have to right? So in the same sense, I’m just going to use going to use Apple, because it’s a company that everybody knows, right? They say we’re going to be net zero, and I’m not suggesting a net zero result here, but that means that all of their suppliers are going to have to do something to help Apple get to net zero, right? Because that’s part of their ecosystem. And it’s the same thing. It feels to me like with the retailers, retailers going like, we’ve got to become more sustainable, but we’re using your device every single day, and if your device isn’t sustainable, it’s gonna get in the way. It’s gonna trip us up in our journey towards sustainability. So what are you gonna do to fix it? And then along comes pixels, and pixels like, we can do this all contactless, paperless, and you’re like, that’s part of our plan? No, well, yeah,

Daniel Lim 18:57
and I think e receipts have been around for many years, 1718, the problem has not been the EVC. It’s been the delivery mechanism. It’s just not easy to get one. But you go to square you have to tap your card, and you have to key in your email address or your phone number, and then you have to agree to their marketing so it means you opt in first, then you get an E receipt. Nightmare service is the opt in later, you get an EVC first, and you figure out what you want to do, and the fact that you can just get it on your phone, and that is a medium where you don’t have to opt in GDPR compliant, right? That’s the trigger point, right? I think the delivery mechanism has been the biggest hurdle for a lot of these retailers, and so that’s kind of why this is coming about. And to be honest, none of the payment companies want to be responsible for providing the service, because they don’t want to have to manage the receipt in perpetuality. And this is where we come in, and we go like, we’ll take care of it for you. You can sell it as a service. And this is kind of like where we separate ourselves from all the other EEOC companies in the world. Every EEC company in the world is a direct to retailer model. They sell. E receipt service to the retailer. We are not a direct to retailer model, right? We are partnership model. We sell the E receipt service as a white label product to payment companies, and the payment companies, who have a sales force talking to the retailers, they are the ones that sell it as their service to the retailer. So we have that’s why we can keep the company lean, and therefore we can keep a burn low, which is why we can wait out the sales cycles. Yeah, that’s kind of the strategy. This is a

Michael Waitze 20:31
beautiful model. We’ve kind of figured out a similar thing for us. I won’t go into it because it’s not as relevant. But I love this idea of we’re going to employ your team as the sales team, we’re not going to go direct, because you already have the relationship. We know you need to use this. Your customers want it, but you already have the relationship. Why do we want to step in the middle? And I think this gets back to your whole idea, if we don’t want to disrupt, we just want to embed inside and make everything better for everybody, because in this case, it makes it better for the retailers and for the device providers. Everybody wins. Yeah,

Daniel Lim 21:01
definitely. And I don’t want to say my companies like this company from eons ago, but if you think about it, it’s it. There are comparisons that I draw to and I learned from them. And there’s a reason why the PayPal guys, or they call themselves the PayPal Mafia, yeah, are so good at doing other startups now, they actually distributed the use of a payment company when the internet and E commerce didn’t exist. Think about it, right. If you didn’t buy online, why would you need to use a PayPal service? Yeah, you wouldn’t. You wouldn’t. And they essentially created a payment company for the online world, but they actually had no digital they don’t have a medium to get people to use their service. Like, that’s the classic distribution problem, right? Yeah? Like, they have a really good problem. PayPal was a fantastic product. Sure, they couldn’t distribute it, and they found a distribution medium. It’s eBay. That’s why eBay bought them, right? So, if you think about it, they actually built a service for eBay as or for auctions. And so in a way, they figured out that my product was best used by the auctioneers to pay each other, right? And therefore their real claim to fame is they figured out distribution. Now, where it gets really interesting is that they did it in a time when e commerce didn’t exist. So, I mean, I don’t know whether some of the listeners will even be old enough to understand that, right, but that’s how we both are, right? Like, I mean, I grew up in the 90s. I mean, I went to school and then I went to university in the 90s. So the idea behind it is that that concept of eBay exists because they were able to create a distribution platform even before E commerce was really relevant, right? Amazon would never use PayPal, right? They have their own, right. So, so, you know, that’s the crazy thing. And so in a way, we needed to figure out what was wrong with the E receipt companies of the world you receive companies have existed since like early 2000s right? They’ve all failed one by one. And one of the things that I think was never solved was the product market fit when it comes to distribution. And so for me, I think where we may have found the secret sauce is that we may have developed a different distribution methodology for ECEs because the way the tech was built.

Michael Waitze 23:28
But was that on purpose, or was that just happenstance, right? Because business model innovation is almost as important as technological innovation, right? So

Daniel Lim 23:36
that’s where I would always point out to the Facebook figured out that advertising was the way to monetize social media or the social media, figured out advertising was the right medium. Yeah, fair. So the answer to you is, I don’t know. I’m sure that if we are ever successful, and this is a big if, there’ll be historians and strategists poring over material to make this argument right, but I would say that a large part of it is that we stumbled upon it. We knew the tech we stumbled upon, and we played experiments around distribution points and we figured it out right.

Michael Waitze 24:14
Do you want to talk about funding?

Daniel Lim 24:19
Yes, yeah. So one of the things that we had to be challenged is that if we want to build international company, we can’t have a very, how would I say non diverse Investment Group? Yeah, right. We started as a Singapore based company, and therefore a large part of our initial investment group was actually Singapore based, fair enough. And that’s always going to be a challenge, right? Because Singapore has 5 million people, great country. But I want to say this with the most amount of humility. I don’t think there has been a really, really successful Southeast Asian, Singapore based company in. It could grow internationally easily. Okay? And I’m not saying I’m the first one, but I will

Michael Waitze 25:04
say this for you, because I’m thinking about this a lot recently, Daniel, with all the fanfare and all the hoopla around the Southeast Asian startup ecosystem, every two years, you’ll see like a new article in some silly publication that says, This is the year that x country goes whatever, and I’m telling you, it’s not going to happen India, for sure. India is already building global companies, but the likelihood that a company like yours is going to come out of this, and I think you because we talked about this after we recorded last time, I felt like we were done recording. I was like, This dude’s definitely going to succeed. And that’s just the benefit of me talking to 1000s of entrepreneurs, right? But I really felt like that, and I think in the year that since we’ve spoken, it’s kind of born itself out. Anyway. Go ahead, that’s

Daniel Lim 25:48
very flattering. Thank you very much. Thank you very much, Michael, let’s keep my fingers crossed. What you think is real, let’s better lucky than good. That’s all I have to say. But the idea behind it is that I think that’s a function of the fact that you don’t have an international investor base that can bring you to other places. That’s one, that’s one, yeah, that can expose you to the right set of both investors and BD opportunities and two or three to essentially expose you to kind of capital that’s willing to take risks. I think the Southeast Asian, Asian capital has a different risk profile from European capital and from American capital risk profile. I think quite clear that the American risk profile is significantly different, and they’re willing to fund at different prices, right? And that’s kind of to the detriment. But of course, the labor force in the US is significantly more expensive, and therefore they need that kind of valuation and that kind of, you know, fundraising numbers to essentially justify building a business in the US. For sure, it’s also because the US is the monolithic economy, right? It’s just one country, 300 million people, 1516, $17 trillion GDP. So therefore you could build a setup there, survive there, and not have to leave

Michael Waitze 27:08
you don’t need to expand to Canada to build a multi billion dollar company, correct?

Daniel Lim 27:13
And the challenge would be, in Asia, you can’t do that. If you build something in Singapore, it cannot just be built for Singapore, because Singapore is just not big enough, right? And even the region’s not big enough because it’s 600 million people, seven languages

Michael Waitze 27:27
really fragmented, so many nuances, GDP per capita, and

Daniel Lim 27:31
yeah, Japan’s 120 5 million people. Language barriers that are slowly eroding, and that’s why we’re here, or that’s why I’m here in Tokyo, but it still takes time, right? So I think generally, if you think about it, if you want to be a successful startup in Asia, my humblest opinion is that it starts with the investor base. Other than building a business model that can make sense internationally, because you

Michael Waitze 27:56
think that that investor base is then going to connect you to other business opportunities in the local domain where they are investing from.

Daniel Lim 28:05
Not only that, but the thesis is that they just have the reach. Yeah, yeah. And because they have the capital, they have to reach because if you are like a $5 billion fund, you can’t just invest in one startup, right? You have to invest in like 5000 startups, and then you wouldn’t and if you’ve been in existence for the last 30 years, you have founders that were successful in certain spaces that your startup founders are from or are working on, that could lend advice. And this is where that multiple reach thing is. I think it’s a competitive advantage in venture, yeah. And I think you can’t erode that competitive advantage in venture so easily. It’s like telling coke that their secret recipe doesn’t matter. It does. That’s why they’re the biggest, one of the biggest drink companies in the world, in the world, until people change preferences. Yeah, right, yeah. It’s a it’s a really

Michael Waitze 28:56
interesting thing to say, right? Because there’s all this literature out there about how, excuse me, this town or this country or this city is the next Silicon Valley. But the reality is that so many other nuanced things and some non nuanced things, some hammer things, like, really have to change, like risk appetite, amount of capital, you know, invest, amount of resources that are there potential clients, like, all these things that are never going to change to make a difference. So tell me this, did you go out and actively look for other investors outside of the region, or did they find you? And either way, who’s doing this? And can you talk about how much you’ve raised, if you’ve raised anything?

Daniel Lim 29:34
Yeah. So first thing first, I think, because we started to have such an international presence when it came to business, we were winning competitions in Europe. We’re putting our, you know, we won that competition in France. We want that competition in Madrid and so and so forth. So slowly, things got leaked out. And I think in the world of AI, some of these VC companies have engines, and we’ve gotten some outreach from international VC. These that run engines, good for you, and we had our conversations. And then when they are actually very educated VCs, and I’m not saying ours is not but they just seen so much more business models, they start to understand what you’re trying to build, and then they start to understand the implications. Then they try, they start to understand the measure of risk versus reward. I think Asia based VCs are very they’ve seen success stories when it comes to new econs in the B to C world, they know to look for. They just had Yeah, and so therefore, very systematically, they tend to look for that. So when you bring them a B to B Company, then it’s not 100% comfortable. They’ve not seen it, right. Whereas in the European and the US markets, they’ve seen B to B companies that have been successful, blah, blah, blah, blah, blah, yeah, right. They’ve seen stripes, they’ve seen at em, they’ve seen so many companies in this space that has essentially evolved into be multi billion dollar buyouts, then, you know, payouts and all stuff, right? And so the gravitational pull to that is very different, right? And so one of the interesting things was that we started out trying to raise quietly 1.5 to $2 million

Michael Waitze 31:04
on a safe note, on a safe note. Okay, go ahead, yeah, so

Daniel Lim 31:08
that we didn’t have to announce the fundraise and we can just keep it really quiet and down low. And then the round got quickly overscribed to the point where it’s about 3x oversubscribed, and actually only one of the investors is from our current Southeast Asian base, got it go ahead, and that’s because they were our previously investor. We obviously had to pay homage to them. They want some piece of it, and so they took the small bite. But other than that, the whole round turned out to be purely international investors.

Michael Waitze 31:39
Can you talk about where they’re from, and can you mention their names or their names? Or no? Yeah,

Daniel Lim 31:43
of course. I can mention their names again, talk about it. So we didn’t raise that much money. We try and cap it low. So I think net, net. I think we’re thinking about two point something. It’s called 2.3 to 2.4 Okay, in new money, our new lead investor is headline VC. They have offices in Japan, Taiwan, Belgium, London, New York. Yes. Akio San, I know this, yeah. Tanaka San has been quite enamored, actually, smart. The principal we worked with wanted to write a million dollar check. He saw our business like, why are we not taking two? And then we had to go back and forth by going, like, I don’t have the space

Michael Waitze 32:26
I want. You know,

Daniel Lim 32:28
thank you, Michael. And he’s like, no two now, am I okay? So we had to find some way to work it in, yeah, it’s a bit complex for you because of that. So we ended up pricing around, and we had to trigger the safe note holders that were originally signed on right.

Michael Waitze 32:45
That’s in right, because you put it Yeah, yeah.

Daniel Lim 32:48
So they essentially Foster, they forced the not force. They invested enough money to trigger the notes. Yeah, we already signed earlier. So that’s why the ROM became a little bit bigger than we wanted. We had, we went. I went to the US. Well, I went on a 14 city, 31 day trip. Don’t ask why. It’s not that I did it on purpose. I’m suffering because of it. Now, I’m sure I’ve assigned this problem that have to deal with medically. Now, amount of travel? No, it’s okay. It’s part of life. Yeah, it’s something that could avoid for 27 years of life. I can back to the main story. We met some VCs in the US, and they understood our model, and they’re going, like, I want to invest. I’m going like, I have about 5% less 3% you’re like, No 10 or 15 minute, I’m gonna, like,

Michael Waitze 33:34
can’t take that much round.

Daniel Lim 33:37
No, percentage of the company, they minimum. We on 10 to 15. I just gave some I just agreed to get somebody invest in the he really taken 10% of company, if I agree with you, or giving up 25% of the company. Right now. Yeah, right. No, I can’t totally understand, yep. Like, if the guy backs out, let me know. Which is why we, I said we were about 3x over subscribed, because so many people asking for, like, 1015, the sad thing is, all these companies are like, seed stage VCs, right? Not that we are seed stage company, but we were raising kind of like a C plus. And so they’re like, if we don’t get in now, we can’t write your next check. We don’t pre ace or A’s. And we’re going, like, Huh? And then he goes, like, I can introduce you to all the A companies in the US.

Michael Waitze 34:23
But I mean, yeah, sorry, go ahead. You

Daniel Lim 34:25
know what? The crazy thing about the US, VCs, I love them today, yeah, make me introductions to some of the biggest ISVs, ISOs, payment companies in the US, yeah, no obligations. And you go, shoot, like, should I just taken the money? Because the kind of doors they’re opening are just massive, right? And this is the challenge, right? And to be fair, the headline they open a ton of doors. I haven’t even signed on the dotted line. And they made like seven introductions, of which, like almost 100% of it is materialized. Into new deals. Yeah, these are really the beginning of new deals like and it’s not in Asia. It’s outside of Asia. It’s their portfolio companies in the US. It’s their partners or people that they know in San Francisco. I mean, my conversations in the US, the two weeks, the one and a half weeks I was there, it was so much more valuable, and that it made me think, should I have raised more so that I can move into the US faster versus my original plan and increase burn and all start is very tempting, right? This is it’s very, very tempting, right? Yeah. And so that’s kind of the challenge with with this international set of investors, and not a single one of these international investors, you know, they are in Japan, in Europe, and obviously headlines in all three continents, right? So a combination of that, you know, the amount of conversations we’re having right now, the quality of conversations we’re having right now, insane, right? Insane, like, I can’t have these kind of compositions in Asia.

Michael Waitze 36:06
Yeah, that’s true too. I shouldn’t say that out loud, but yeah, I completely agree with you. Here’s the thing. We should also mention, that she on CO and her her other partners in the hustle fund, Eric and Elizabeth, yeah, Eric and Elizabeth, well, Eric and Elizabeth are probably still in California.

Daniel Lim 36:23
Yeah, yeah, right. So I didn’t get to meet them, unfortunately, too busy. Very nice

Michael Waitze 36:26
people as well. But the whole idea of housing fund itself is that we did this in the United States. No one’s doing it the right way. In Asia, I want to go home and do this there, so I can encourage people to do exactly what they help you do, and then connect them back there. So they’re really unique. But I don’t want this to be a podcast about sheen and hustle fund, but they’re really unique in their outlook, in the same way that headline is really unique as well. Yeah,

Daniel Lim 36:51
of course, right? I mean, the Sheehan has always shared her context whenever I travel to us. Of course, I met a few important people while I was then, one of the reasons why one of the funds wanted to invest was because of the introduction from her, and then they saw what we’re doing, and he understood the space immediately, and he wanted to take 10, 15% of the company, right? I think there’s just not enough of funds like hustle. And the problem, or not, the problem, the challenge with a fund like hustle is they need other people in later stages to back up the startups that they back. They can’t back the startups all the way, right? They need the part one. Yeah, they can do part one, but other people must do part two and part three and part four. And I think one of the challenges is that, after I took she and check, finding Part Three Part Two were challenging until now, right, right? And that hump, I don’t know whether that exists for startups in Europe or in the US, I’m sure, but I feel that hump was totally unnecessary, and it’s just challenging. So

Michael Waitze 37:52
here’s something that we talk about all the time. Have you ever considered moving to Silicon Valley?

Daniel Lim 38:00
You might want to ask my wife, she might actually murder me if I say yes, but, and I

Michael Waitze 38:04
know that, and I don’t want you murdered, I like you too much, because this has been going on for for, actually, for decades, right? And not just from Singapore, not just from Japan, but even from Australia and other companies, countries in the region where people are like, I know I can accelerate my growth if I can be be in an ecosystem where the connectivity is almost like kinetic energy is you just like bouncing off of other successful people all the time, whereas sometimes it feels like you’re already in a vacuum, right?

Daniel Lim 38:35
It’s very tempting, but I want to add, I want to add a little bit of assault into this. I understand. I don’t think if you grew up and tried to start, and have only started, a venture backed company in Asia, you would eat and let’s just say you were successful or not successful. Doesn’t matter. I don’t think you would know how to operate into Silicon Valley. I think they operate on a different mindset. Yeah, for sure. And I think you didn’t learn and grew up in that mindset. It becomes challenging. And as much as I say that, it sounds very exciting and all stuff like I think that’s one of the challenges, like the playbooks, and this is what you hear a lot, this term, playbook that’s used by a lot of VCs, not just in Asia, but all over the world. I think people take the playbooks of successful startups in countries like the US and forget that they work in the monolithic

Michael Waitze 39:34
economy. Yeah, that the market is different.

Daniel Lim 39:38
And so I think not enough homage is being played to startups that are willing to write playbooks for Asia, right, playbooks for, you know, and change the way things are done in Asia like I think one of the things that I had a long discussion about with one of the guys at headline who just recently joined headline that I’m very close to, and one of the reasons why I got introduced to. Line is that he and I were arguing about playbooks and how playbooks are not being employed in Japan more, and I go like, maybe that’s because it wouldn’t and shouldn’t work, and that we need to learn how to build our own playbooks. We need to have more thoughtful founders that will build playbooks that are more localized, that will work in Asia. Or the playbook would be, I’m not saying My company is a good example, but my would the playbook be, we need to build companies that are very low burn, yep, that are B to B, that are more augmented, because we can build destructive, high burn, B to B companies like the US can, because this market wouldn’t allow for it, right? And is that the playbook? Like, I don’t know. And how would you get a company to flip to use B to B services in Asia? Like, no one’s built that playbook. And I think that’s the lack. I mean, maybe it’s because the way the funding situation works, with all this stuff. We haven’t, you haven’t explored that enough. So can we, I think that’s

Michael Waitze 41:04
can we make the case that part of the issue in Asia, and not just in not just in Southeast Asia, but in Asia in general, is that there’s kind of an oligarchical setup for large corporates, in the sense that if you look at any country, five or six companies or five or six families run the economies there. So this idea of building a startup from scratch is different than it is in the United States, where it’s so chaotic, in a way, at least it has been true. I

Daniel Lim 41:36
mean, no, okay, so this is the part I would disagree, B to C, Indonesia. Go, Jack, grab, not, well, not all of them are oligopoly. No, wait a second

Michael Waitze 41:45
though, wait a second though. Grab was founded by a guy whose father was in the taxi. I

Daniel Lim 41:50
know, I know I went to one of the family members. I say that’s why I said, not technically oligopoly. I got it. He didn’t. Yeah, not technically like to be fair to the man, right?

Michael Waitze 42:01
They did an unbelievable business. But, yeah,

Daniel Lim 42:03
so, so I want to say that’s true. I want to say that there’s a concentration of industry experts, or concentration of industry leaders in Asia’s business. That’s very common in Japan, Korea, even in Southeast Asia. You know, it’s quite common in the Asian economy, there’s less industry leader concentration in the US, for sure, this, which is why

Michael Waitze 42:27
disruptions, there’s no side box, which are cable Yeah,

Daniel Lim 42:30
exactly. Which is why maybe disruption works, yeah, and I don’t know that. I’m not saying that my model, or the model that pixels undertake, will work better. I’m just saying that. Have we tried not to do something that is replication, 100% replication of the US model, yeah, right. Or European model, right? Have we considered the alternative? Because it tends to be a concentration of industry leaders. If we can build a service that all industry leaders need to have then would you win?

Michael Waitze 43:04
It’s a good question. I feel like we could keep going. This has been an unbelievable conversation. I want to let you go. I really want to thank you for doing this. Daniel Lim, the Founder and CEO of Pi-xcels, again, I want to say it to you again. I really think you’re going to be a success. Hard work. Hard work matters. I said this is somebody in the gym today. He’s going to his first competition. I’m like, Dude, you did all the hard work. Keep doing it. The competition will go really well. You’re not in a bodybuilding competition, but to be fair, it’s not that much different. You’re building from scratch, and I think you’re gonna make it, and the people that are out there supporting you, plus the patents that you have and the market that you’re trying to attack, I think, I think you’re setting yourself up in your company, up for success. And thank you very much. Let’s keep the conversation going.

Daniel Lim 43:55
I will. Thank you.