PERTAMA Digital Bhd has been on a transformation journey which is now almost complete. After exiting the textile business in China in August, the company is all primed to become a pure digital services player.
The exit of its China-based foreign directors towards the end of September was some of the major changes to the company’s board of directors and management team.
Now, Pertama Digital is also set to pluck small and medium enterprises (SMEs) in the financial technology (fintech) and government technology (govtech) space. It is training its eyes to acquire companies that have been serving the government in the digital space for some years and are set for a leap forward.
“There are many SMEs that have plateaued in growth after building one or two products. They may not have the liquidity or they can’t turn to venture capital to grow faster. We are going out there, looking at companies that are already providing the government with some kind of service that perhaps need to be radically improved,” Pertama Digital CEO Saifullah Akhtar told The Malaysian Reserve in a recent interview.
“We acquire, transform and scale. And we bring it up to date. We have a nice pipeline of these companies that we’re looking to invest in. That’s how we will deliver value to our shareholders.”
Saifullah, the 37-year-old newly appointed CEO known as Saify in the corporate circle, is pretty fired up with the acquisition plan at hand.
“We are looking for business that is already profitable to put under the group, consolidating these businesses that will also contribute to the group’s profitability. You will hear about them soon,” he said.
Saifullah was made CEO on Dec 1, 2022. Previously, he was the company’s strategy director. The Singaporean is the son-in-law of Sabri Ab Rahman, the ED and a substantial shareholder of Pertama Digital, according to the company’s exchange filing.
Previously, he was a strategic partner to both Uber Technologies Inc (2014) and GrabCar Sdn Bhd (2015) to launch and grow their gig economy offerings in Malaysia. Additionally, his alternative data for credit assessments business was handpicked by the UK Department of International Trade for relocation to London, where it expanded in collaboration with financial inclusion organisations in London, Middle East and North Africa (MENA) and South Asia, the same exchange filing added.
The Beginning
Pertama Digital was incorporated in 1984. It was previously known as Sinotop Holdings Bhd, which was a reverse takeover (RTO) by the Be Top Group Ltd of China. Be Top was a textile manufacturer in China. The investing value proposition back then was that Sinotop provided a cheap and easily accessible investment channel into China.
The company changed its name in September 2020 to reflect its pivot into a business that, as its website states, “will drive the future”. Beginning in 2020, it turned its attention to investing in, and nurturing, great fintech and govtech companies that “build impactful, inclusive solutions in the digital and mobile space”.
In essence, the company wants to transform how the people at large experience services provided to them by the government and large private organisations. The idea is to remove barriers typically responsible for delayed responses and switch to key digitalisation opportunities that would benefit the people.
Under the company’s armoury is eJamin, the world’s first neobank (also known as an online bank, virtual bank or digital bank) for court bail payments, developed at zero cost to the government and in close collaboration with the Palace of Justice. eJamin is available at 177 courts across Malaysia, allowing some to achieve full cashless bail payments, while channelling millions of ringgit of deposits to partner banks on a daily basis.
“eJamin was built on pay-for-performance basis, which drives the sustainable approach from day one. And it is still growing,” Saiful- lah said.
Pertama Digital is also the holding company of Dapat Vista (M) Sdn Bhd, a Malaysian company that specialises in the digitalisation of government services. It provides solutions in mobile and web apps; mobile payment and messaging; business empowerment APIs; and other customised digital services. Dapat Vista operates the government SMS gateway called mySMS and owns the MyPay and eJamin apps.
“We are a growth company, and we are at the beginning of our journey,” Saifullah said. When it comes to products, he said that it goes through a three-year launch path.
In the first two years, you invest in the product to test assumptions and achieve product-market fit. Once that occurs, from year three, the products start to grow rapidly because the offering is what the target market needs.
“That is what’s happening now to eJamin. Next year is its third year,” he said.
He added that mySMS will also grow fast as the company has injected new communication channels beyond SMS. It now can also communicate via WhatsApp, Face- book Messenger and voice chat. “We are helping the government to communicate with the rakyat through other channels as well. This means traffic will grow,” he said.
Pushing Forward
The team at Pertama Digital is also excitedly watching the potential opportunities as Malaysia accelerates in terms of digitalisation, with a major push forward coming from the Covid-19 pandemic. However, the public sector is still lagging behind.
Recognising the need for post-pandemic redirection in the tech sector and corresponding low competition in public service digitalisation, particularly in middleware and consumer-facing solutions, Pertama Digital is taking a serious leap into the govtech space after its exit from the textile business.
Saifullah said digitalisation in the public sector is mostly dominated by legacy companies which focus more on the backend applications and may not be too concerned with how end users interact directly with the system. This is the space where the likes of Pertama Digital come in and make the pain points disappear.
“We will be investing in more govtech companies. (The target companies) are already serving the government, they are profitable, they are small. We are looking to acquire them and integrate them with our existing products, and grow them fast,” he said.
Source: https://themalaysianreserve.com/2022/12/13/pertama-digital-set-to-conquer-fintech-and-govtech-space/