Acquires $100m worth of revenue from SMEs to transform their business models in the next 6 months and incorporate AI to grow their existing clientele
Singapore, 5 August 2022 – Small and Medium Enterprises (SMEs) have the potential to change the economic landscape if they could enhance their ability to generate higher economic value-added (EVA) growth, according to AIV50, a global AI venture builder company headquartered in Singapore. In order to achieve this, AIV50 launched a unique programme where SMEs are incentivized to transform themselves digitally and get AI technologies, shares and funding based on their client portfolio.
Todate, close to 20 SMEs from diverse industry groups have participated in this programme, and have contributed a strong pipeline of actual revenues totalling US$100m per year to AIV50 in the next five years through special purpose vehicles (SPVs). The SMEs come from industries such as IT distributorship, audit/accounting firms, blockchain and fintech players, edtech start-ups, sports analytics firms, training companies and more. AIV50 targets this figures to double each year as the adoption of AI becomes more acceptbale to SMEs.
Citing World Bank data, SMEs represent about 90% of businesses and provide more than 50% of employment worldwide. Formal SMEs contribute up to 40% of national income (GDP) in emerging economies – while informal SMEs can cause these figures to become significantly much higher when included. These facts make SME development a high priority for many governments around the world.
The Founder / Chairman of AIV50, Prof M Nazri explains, “We see three key challenges impacting SMEs today: firstly, the need for capital and the way it is being deployed is based on very unique circumstances for each enterprise, post-covid. Financing for SMEs should no longer be viewed as a plain vanilla product. It is no longer a commodity and needs to be custom-fitted into every SME based on each business life cycle. Any financiers in this space must possess very advanced technological resources to evaluate the risk-return proposition of each SME.”
“Financing for SMEs should no longer be viewed as a plain vanilla product. It is no longer a commodity and needs to be custom-fitted into every SME based on each business life cycle.”
“Secondly, the popularity of alternative financing models such as peer to peer financing, equity crowd funding models and revenue-based financing (RBF) platforms, whilst popular, still do not resolve the margin compression issues faced by SMEs broadly because they don’t technically boost their margins as a financing instrument,” he added.
“…the popularity of alternative financing models such as peer to peer financing, equity crowd funding models and revenue-based financing (RBF) platforms, whilst popular, still do not resolve the margin compression issues faced by SMEs broadly…”
“Thirdly, SMEs are facing potential obsolescence of their business models – these range from training companies, retailers, consultants, manufacturers, family clinics and dentists, small manufacturing firms, and even certain technology companies. The entire value chain to market and service your customers, has dramatically changed. Pricing pressures and supply chain directly affect margins and costs.”
“SMEs are facing potential obsolescence of their business models…The entire value chain to market and service your customers, has dramatically changed. Pricing pressures and supply chain directly affect margins and costs.”
He concludes, “It is a wake-up call for businesses to relook the way the entire business model is constructed. New, radical measure needs to be implemented.”
Based on AIV50’s unique programme called Project Investment Using Sales Contracts (PISC), SMEs shall be given the assistance to securitize their selected projects to not only earn additional income, but they also get to use AI technologies and own shares in the relevant AIV50 portfolio companies that supply the technologies. PISC targets growth enterprises with revenue, and gives them the opportunity to enhance their profit margins, rather than reduce margins. Details can be found in https://www.aiv50.com/value-add/
Dr Charlie In, Founder of Raffles Financial (RFG) and a strategic partner of AIV50, offered another set of perspectives, “The negative impact of COVID-19 pandemic has seen SMEs struggling around the world. Many struggled with adopting digital technologies, such as AI, in their manufacturing or services operations. We are pleased to work with AIV50 and the Centre for AI Innovation (CEAI), to identify the opportunities that the deployment of AI technology can do to alleviate the plights of SMEs in the post-pandemic era, including the impact on work, organizations, and performance. We can assist them to overcome the fundamental challenges that SMEs face in AI adoption and digital transformation, and recommend strategies to take on those challenges.”
Dr Charlies believes that, “SMEs are facing greater challenges and uncertainties, which are likely to continue in the post-pandemic era. Despite the rapid response of governments to curb business closures by providing mitigation measures such as loans, wage support and subsidies, the financial difficulties of SMEs have not improved significantly. Some mitigation measures to reduce this burden have not been as effective as expected, therefore it is vital to find urgent measures to properly resolve the difficulties of SMEs and subsequently promote their continuous development.”
AIV50 (www.aiv50.com) is an AI Venture Builder with 50 proprietary and award-winning AI technologies that help businesses enhance their business models by digitalizing their core businesses with M&A strategies. Headquartered in Singapore, AIV50 forms part of a venture building project by MyFinB Group (MFB) and VSC Portfolio Investments (VSCPI).
Raffles Financial Pte Ltd (“RFG”) (www.rafflesfinancial.co) is based in Singapore providing corporate finance and public listing advisory and management services to Asian firms seeking public listing in North American stock exchanges and Singapore digital asset exchanges. RFG is listed on the Canadian Securities Exchange, America’s OTCQX and Frankfurt Stock Exchange.
FOR FURTHER DETAILS, PLEASE CONTACT VENTURES@AIV50.COM