DeliriumCyberTouch set to rock Asia with joint expertise
Business Times (Malaysia), May 18, 2001
BY JENNIFER JACOBS
"MAN, we are gonna rock Asia," enthused Steve Hsia, the boyish 37-year old chief executive officer (CEO) of DeliriumCyberTouch, the product of a union between a Kuala Lumpur-based company and Hong Kong-based company, both of which specialise in getting traditional businesses onto the web.
Hsia is very excited about the merger which was announced this week. In an interview with Business Times, he talked about what CyberTouch, the Multimedia Super Corridor (MSC)-status company he founded five years ago, does, what Delirium does, and what they plan to do together.
"I think DeliriumCyberTouch will be a successful Asian-based company playing a world-class game. We have famous venture capitalist Lip-bu Tan (of Walden International) and General Atlantic Partners partner John Wong as board members and BroadVision's founder Pehong Chen as a corporate adviser. We are going to rock Asia. This is happening, man!"
He said CyberTouch basically targets blue chip old economy companies, works with them to figure out how they can best make use of this enhanced connectivity.
Hsia said the CyberTouch targets the blue chips as its customer base because these are the companies that are willing to spend money to get themselves up to scratch and there is some urgency in them doing so quickly as they are usually in fairly competitive industries.
"We have a preferred solution set for every industry which we have derived from working with our customers. What companies in the financial industry would want to do first would differ from what the telecommunications company would do first and likewise how the high tech manufacturing company would best leverage the new economy.
"For the high tech companies we have B2B (business-to-business) offerings such as e-procurement products, e-marketplaces...basically developing various different Java-custom applications for their business needs such as the need to deal with OEM (original equipment manufacturer) partners, distributors and suppliers.
"The banks basically first want us to do eCRM (electronic Customer Relationship Management). We did part of the work in developing Maybank2U, the bank's electronic interface with its customers in terms of website design and online marketing stuff. For them, the look and feel is really important," he said.
He said CyberTouch, having been in business for the past five years, is one of the pioneer e-consultants in Malaysia. "The new economy is all about leveraging connectivity. We are only beginning here in Asia and there will still be many years to go."
He said while CyberTouch is focussed in Malaysia, Singapore and Taiwan, Delirium its partner is in North Asia - South Korea, China, Hong Kong, Taiwan and the US.
"So they're in five countries and we're in three countries. We're both going to continue doing the same things we are doing now, which is growing our market because I believe in Asia, we are still at the tip of the iceberg when it comes to the new economy.
"Asian companies are adapting more slowly because of infrastructure problems, government regulatory issues and the educational background of the people which is not as strong as in the US.
"But having said that, South Korea has 50 million Internet users, China has 25 million Internet users and Taiwan, some 8 million, so we're still hitting at a big market.
"And despite the technology sector meltdown, the Internet user base has not stopped growing," he pointed out.
Hsia said DeliriumCyberTouch intends to leverage on this growth. "We have 430 people operating in 10 cities. This makes us one of the largest such companies in Asia. We expect some RM100 million in revenues this year alone."
Last year, he said, CyberTouch did about RM30 million in business.
He added that Delirium has funding of some US$24 million (US$1 = RM3.80) in the bank and its main funder is one of the world's top venture capital companies General Atlantic Partners, while CyberTouch has some US$6 million in the bank. Its investors include Walden International and BroadVision.
"We have all this money in the bank but we are not going out there to splash money on non-essentials. In fact, one of the reasons for our merger was so that we would not have to spend money on opening up new offices in each other's markets.
"Delirium was already in North Asia looking to get into South-East Asia. And we were in South-East Asia looking to get into North Asia. While we were flying we bumped into each other and decided to merge.
"Times are bad and markets are bad and the last thing you want to do at a time like this is spend your most valuable resource, cash, in opening new offices and hiring people. It's both expensive and tiring.
"So we put both companies together through a share swap exercise and came out with DeliriumCyberTouch. It did not take us long to decide to merge. It took us longer to figure out how we were going to integrate."
He said it was a non-cash acquisition, in effect, a merger and the value of the merged entity was close to three-digit million US dollars. Hsia declined to be more specific.
He said the two companies have almost equal shares in the merged entity and the majority of equity is owned by the management team. The rest is divided between its three professional investors - General Atlantic Partners, Walden International and BroadVision and its angel investor, Sarawak-based Samling Corp CEO Yaw Chee Ming.
Delirium's customers include Citibank, United Daily News, PCCW and Panasonic while CyberTouch's customers include DHL Asia Pacific, Telekom Malaysia, Tenaga Nasional and Asustek.
While Hsia will be assuming the post of chief executive officer of the merged entity, Delirium's CEO Joe Ngai will be the president.
DeliriumCyberTouch currently has offices in Beijing, Guangzhou, Hong Kong, Kuala Lumpur, New York City, Seoul, Singapore and Taipeh. It is opening new offices in Shenzhen and Shanghai this month.
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