MARKETS & INVESTING | Krisana Gallezo-Estaura, Singapore

This platform smart matches M&A investors, advisors and mid-market companies

It has a proprietary database with over 20,000 investors.

Singapore reported an impressive surge in mergers and acquisitions (M&A) activity in the first half of the year. It comprised the bulk of the deal volume in Singapore registering 339 out of 383 deals valued at US$40.5 billion. This is already 40% of the US$101.2 billion recorded last year. But while M&A activity and investment climate is good in Singapore and the rest of Asia, a team of professional investors from France and Switzerland argues that the M&A activities for mid-sized companies, with deal sizes ranging from US$10 to US$150 million, are ‘very fragmented’.

Tanguy Lesselin, the team leader, notes in particular that it is ‘tremendously’ challenging for investors to source for companies; for companies to find the right advisors to help them; and for advisors to identify suitable investors and acquirers. The market, he adds, is even harder to navigate when it comes to cross-border deals, as the universe of potential partners expands substantially.

To address the problem, the team composed of four entrepreneurs, founded Finquest in January. Finquest aims to render M&A market activities more efficient by connecting institutional investors, Asian mid-sized companies, and M&A advisors.

“There are roughly half a million mid-market companies in Asia. However, from our experience, these companies are too small to be listed on a stock exchange, but too large to have their financing needs met by early-stage venture capital firms, crowdfunding platforms, or peer-to-peer lending companies,” he said.

According to Tanguy, less than 1% of these mid-market companies are currently backed by institutional investors. Hence, they wanted to set up Finquest to help these companies access a pool of relevant advisors and investors.

Tanguy also believes that there is a need for smart matching that Finquest provides on its platform to bridge the gaps between the global investment community, mid-sized Asian companies and M&A advisors who facilitate the process.

“With economic growth in Asia continuing to outpace other regions, the world’s institutional investors are becoming more interested in exploring opportunities in this market. However, we observed that the lack of access and the market’s overwhelming size and complexity are blocking progress,” he said.

Tanguy, who serves as the CEO, boasts that their proprietary database has more than 20,000 investors, advisors and companies. According to him, the Finquest system is designed to guarantee investors’ privacy, information confidentiality and data security. No profile or deal information is visible on the platform until an introduction between two willing parties is made. Also, unlike most match-making platforms, they do not charge a commission on each deal, because they feel that it would create conflicts of interest.

“We chose a subscription-based business model to ensure a complete alignment of interests,” he added.

Finquest has machine learning techniques continuously fine-tune the algorithms to generate suitable matches between three groups: institutional investors, M&A advisors, and Asian companies. It has a team of analysts who then carefully curate the suggested matches from the algorithms to generate an actionable and credible short list of potential introductions for our clients.

The team

The team behind Finquest consists of four co-founders from France and Switzerland. Each of them has already been a founder and CEO of a few companies before. They have accumulated more than 20 years of professional experience in Asia Pacific, and completed a large number of M&A or structured finance deals on a global basis.

As each of the founders had experience with new companies, setting up Finquest was easier for them. They incorporated Finquest at the end of January, and in less than 30 days, they built a team of 12 people, set up operations in Singapore, Luxembourg, and Hong Kong, and created the first set of working features of the platform. The first version of the entire platform came out on July 4th 2016, as they had planned five months ago.

As for funding, the founders put up the seed money initially, and they were then invested in by business angels. They were able to raise funds in March 2016 from high profile CEOs in the banking software, fintech, private equity, social networking, private and investment banking fields.

Beyond their backgrounds in M&A, law, structured finance, corporate strategy, information technology, and marketplace management, they all have had a few unusual personal experiences. Gerard Belicha is an avid aircraft pilot; Antoine Denaiffe has crossed Eastern Africa in a 1970 military ambulance truck, Jérôme Pinneau did rock climbing, has five kids and three donkeys, and Tanguy completed a few single-handed offshore sailing races and a transatlantic race. 

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