MyRepublic plans IPO next year as CEO dispels M1 buyout rumors

The MyRepublic team. Photo credit: MyRepublic.

Internet provider startup MyRepublic plans to go public by the end of 2018, CEO Malcolm Rodrigues announced today at a media event in Singapore.

It’s not yet certain where MyRepublic will list. The firm has considered SGX because it’s headquartered in the Lion City, but doesn’t exclude the possibility of Hong Kong or Australia either. Chief financial officer Lavinia Koh told journalists the decision will be determined by factors such as valuation, liquidity, and investors. The company did not share how much it’s looking to raise during the IPO.

With the IPO funds, MyRepublic plans to expand in seven new markets in Southeast Asia: Malaysia, Thailand, Vietnam, Cambodia, the Philippines, Myanmar, and Sri Lanka.

MyRepublic plans to launch mobile telephony services in Singapore in 2017.

MyRepublic is currently in the process of fundraising, and the “rumors” of MyRepublic making a bid to buy a majority stake in Singapore telco M1 are making things complicated, Rodrigues said. The M1 buyout “rumor” he referred to was reported by Bloomberg at the end of May.

The justification for not buying out M1 is because MyRepublic is “not a telco” but an internet platform company. Rodrigues confirmed that MyRepublic did express an interest for a buyout but then decided against it as it was not a good fit with its current mission: to be an online company that provides real-world services without the need for physical infrastructure.

The company is looking to raise US$73 million, which should carry it up to IPO. Rodrigues told media it will be raising the funds at a valuation of US$397 million. The funds will be spent mostly on laying down fiber infrastructure in Indonesia and on customer acquisition. The CEO said MyRepublic is adding 17,000 new customers every month across its markets.

MyRepublic also announced it plans to launch mobile telephony services in Singapore as a mobile virtual network operator, buying airtime from Singapore’s three telcos, Singtel, Starhub, and M1. It will be the second such provider in Singapore after Circles.Life, which has partnered with M1. It plans to launch the service in October. Rodrigues said the company has a deal with one telco already but declined to reveal it. The service will be extended to its other markets in 2018.

An all-digital telco

Rodrigues likened the approach MyRepublic wants to take to that of Uber for transportation or Airbnb for hospitality.

MyRepublic’s lean way of working, focusing mostly on online infrastructure, allows it to keep its costs low and to deploy quickly. “We were able to expand from Singapore to New Zealand in 60 days,” Rodrigues said. This also means it can run operations with smaller teams. For example, it has only 40 people in Australia at the moment.

This way, the firm can break even with just 2 percent of the market share in any market it enters, according to Rodrigues. It targets a market share of 5 percent in all of its markets, but has achieved more than that only in Singapore at the moment.

While laying down its own infrastructure in Indonesia is not exactly consistent with that plan, the specific needs of that particular market make it necessary, Rodrigues said.

The firm currently operates in Singapore, Indonesia, Australia, and New Zealand. It claims to have been cash flow positive in Singapore since mid-2016 and EBITDA positive in Indonesia as of May 2017. It expects to be EBITDA positive by the end of 2018 in the rest of its current markets.