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Why Singapore’s SportsHero Is Going To List On The ASX

Another Southeast Asian tech heads down under

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BY Tanya Mariano - 05 Jan 2017

PHOTO CREDIT: Getty Images

Following in the footsteps of other Southeast Asian start-ups, Singaporean social sports prediction platform SportsHero is heading for the Australian Securities Exchange (ASX) through a reverse takeover of Nevada Iron (a reverse takeover or reverse IPO is a process through which private companies go public by acquiring a controlling stake in an already publicly traded company). Sixty million common stock shares will be on issue at $0.04 (AU$0.05) per share, raising a total of $2.24 million (AU$3 million).

“[Nevada Iron] has issued a prospectus and the initial roadshows to brokers and sophisticated investors in Singapore and Australia have enjoyed strong interest…The [reverse takeover] has been approved by [Nevada Iron] shareholders and SportsHero anticipates beginning trading on the ASX in December 2016,” the company said in a statement.

‘World’s first sports prediction social network’

Launched in April 2016 by the same team behind TradeHero, a financial learning app with over 8 million users across 91 countries, SportsHero lets sports fans engage, compete and interact with each other through competitions that promise daily prizes. Users with exceptional prediction skills can become “Sports Heroes” and monetize their skills by receiving a follower fee, which other users have to pay in order to gain access to prediction tips by these top predictors.

It currently has 80,000 registered users and is available in 164 markets across six continents. Engagement is high, with users spending an average of about 13-14 minutes per session, co-founder and CEO Dinesh Bhatia told Inc. Southeast Asia in July this year. Currently, the app only supports football, but cricket, baseball, and basketball may be rolled out in 2017.

According to the company, “SportsHero will work with leading global brands to drive peer-to-peer commerce and user engagement, by providing a cost-effective platform to reach large numbers of engaged sports fans around the world.”

Why list on the ASX?

Australia is becoming a haven for Southeast Asian start-ups, particularly those in tech, who are eyeing a public listing. In fact, research by Tech In Asia shows that, of the 13 Southeast Asian tech IPOs between 1998 and 2015, five went the ASX route: Netccentric, Migme, and Ensogo from Singapore; and iCar Asia and iProperty Group from Malaysia.

Says Bhatia, “We see the ASX as the NASDAQ of Asia. The regulators at ASX are very encouraging, and more importantly, retail investors are open to investing in early stage, small cap companies, due to their experience with mining companies, which are relatively high risk, high reward ventures.”

Justin Hall, principal at Golden Gate Ventures, says publicly listing on the ASX does three things: “[I]t provides financing approximately equal to a typical Series B funding round in Southeast Asia (about S$5-10M); it allows the company to issue shares to acquire companies; and it fulfills that entrepreneur's vision of ‘going public.’”

He adds, however, that “unlike going public on NASDAQ, NYSE, or other global stock exchanges, going public on ASX is not considered the ‘end’, so to speak. The founding team is still involved most of the time, there is still an expectation they'll need to raise more funding in the future, and in some instances, there is even a desire to re-list on more reputable stock exchanges in the future.”

It remains to be seen whether this trend of Southeast Asian tech start-ups heading down under will continue in the coming years, but Hall thinks it will decline in the short-to-mid-term, citing two reasons: “[F]irst, growth stage funding will become more commonplace in Southeast Asia; and secondly, Southeast Asian countries with their own exchanges, most notably Singapore and more recently Thailand, are aggressively courting homegrown companies to list on the local bourse.”

In the meantime, expect more Southeast Asian start-ups to try their luck in the Lucky Country.