Htay Aung: Anywheel Founder Struggles, Winning The Bike-sharing War & Rejecting VC & Acquisition Offers - E462

Htay Aung, CEO & Founder of Anywheel, and Jeremy Au talked about three main themes:

1. Early Inspiration and Challenges: Htay detailed his journey from an immigrant student facing cultural and language barriers in Singapore to becoming the founder of Anywheel. His initial inspiration came from dealing with traffic in Sydney and Singapore, which led to the idea of a bike-sharing service during his studies at the University of Sydney in 2017. He recounted the early challenges of integrating into a new culture and educational system, which shaped his entrepreneurial mindset.

2. Operational Learning Curve: Htay described the initial operational challenges of starting Anywheel including assembling the first bicycle at his home to navigating supply chain challenges like sourcing the initial 500 bicycles from manufacturers reluctant to deal with a small startup. He shared insights into early mistakes, such as ordering unassembled bikes, which led to significant logistical challenges. He also detailed how the company integrated IoT technology to enhance operational efficiency and meet regulatory compliance, particularly in response to Singapore’s licensing regulations implemented by the Land Transport Authority (LTA) in 2018.

3. Strategic Market Expansion: Htay emphasized strategic and financial decisions made during difficult period and his choice to reject venture capital funding to retain control over the company's strategic direction. He also discussed market expansion strategies and regulatory navigation and how the company adapted to changes and acquired competitors following the LTA’s new rules in 2018. He also detailed that the acquisition of SG Bike was not only a business expansion but also a move to consolidate the market and enhance the overall industry reputation by assuming responsibility for its customer commitments. He discussed maintaining ethical business practices, particularly his decision not to charge user deposits—a decision made to foster trust and differentiate Anywheel from competitors like Mobike and Ofo.

Jeremy and Htay also talked about the challenges in navigating through the COVID-19 pandemic, the importance of trust, transparency, and hard work within the workplace, and his strategic plans for scaling operations while maintaining a strong focus on sustainability and community impact.

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(01:39) Jeremy Au:

Hi Htay, really excited to have you on the show.

(01:41) Htay Aung:

Hi, good morning, Jeremy. Thank you for having me. I'm also very excited

(01:45) Jeremy Au:

Obviously, we've seen your bikes around Singapore. And the reason why this conversation came about was because Shiyan, who is a regular co-host and I were kind of laughing about the recent news that Anywheel is like the only surviving member and you have never raised venture capital funding. And so we laughed because we are in venture capital and so that's why we got curious about your story. But, obviously we'll get into how you did it and why you did it, but could you share a little bit about yourself?

(02:08) Htay Aung:

Sure, sure. Firstly, thank you for having me here. My name is Tay Aung. I'm the founder and CEO of Anywheel, the first and last small company in Singapore and also in Thailand. So we are also happen to be the largest, currently, we are the largest in Southeast Asia in terms of fleet size. And then of course that's thanks to our licensing with the LTA. So we are approved to operate 35,000 fleet size in Singapore, which itself is a national record because before that, I didn't, like how you are sharing that uh, you know, you are laughing that we are the only survivor. Before we've survived, there was actually many company, I think close to 20 company of micro-mobility company in Singapore. And then it get too mad, too messy. I think at the peak, that was like about 200 over thousand bike in Singapore. And then government start to regulate. I think, I believe Singapore government introduced, LTA to be specific, introduce the first bike-sharing license in the world to govern industry like us. And then from there, only seven companies were given license. And then fast track to today, only two companies remain. In fact, a few months ago, there are still three, but we took over another one. So there is only two companies remaining. And then even at the peak, Mobike, Ofo, were only given 25,000 license size. We were very lucky that in 2022, we broke the record to become 30,000 from 15,000 which is a big plus for us because LTA could have given, I mean, due to the order negativity and some Singapore resident might not have turned around the idea of bicycle sharing is positive image, right? So back in 2022 LTA could have given us just maybe 20,000 or 25,000 just to own par, but they have a strong confidence on us. And also we have proven that we are a very good operator. So they give us 30,000, which is the flip size that we apply for. So it really give us a confident boost. And then just May this year, we apply for increase of this size and we are given 5,000 more. So again, we break our record. So there's a bit of our fast travel, a seven-year story to today.

(03:54) Jeremy Au:

Wow. Incredible. So many questions I have, but, let's go back to the beginning first, which is, you went to Ngee Ann Polytechnic and then you went to University of Sydney. So what were you like as a student?

(04:02) Htay Aung:

Ah, what I was like a student, I think a lot of up and down as a student because to start with, I was born in Myanmar. I came to Singapore when I was 10 years old. So there was definitely a lot of cultural difference, I have to catch up. And then, there is definitely a language barrier. My English was really terrible when I just came to Singapore. So that was a lot of uh, like first a few years, my result is uh, in Singapore, very cui [崔], you know, and they're very, very terrible. And then I think I start to catch up with my language and also my culture. And then I did quite well in some part of the secondary school. And then I pretty much picked up a tennis. So, my Ngee Ann Poly, I use the DSA to go in, direct school admission using my tennis. But surprisingly, using my result, I could get in so it kind of like a DSA work as an insurance, and then after that, I think towards the end of my body, it just get a bit, I wouldn't say boring. I feel I have to go overseas to be more independent. So, I went overseas for University of Sydney and then that's where actually normal student, nothing fantastic to be honest, but I always wanted to have a business on my own because my parent is an entrepreneur himself, so really hustle all the way from really not having a house, empty all the way, to provide us to Singapore and also to Australia, so I respect that a lot. I respect the hustle a lot. And then it's always my dream to follow his footpath. And then hopefully one day I can do the same for him, when he retire, luckily I did anyways on track on that. So yeah.

(05:17) Htay Aung:

And then the idea of Anywheel actually come from when I was in the University of Sydney. Actually my last year, last semester. So, I was stuck in traffic. So I've been driving in Singapore since I was like in body days. And I also drive in Singapore when I just got to, I was, I was a driver of Australia when I just got to Australia. But what I noticed in both of these city is that every year, as I drive more, I didn't want to come to Singapore for holiday during the uni days. The traffic got worse. In Australia also traffic got worse. And then one day, I was stuck in the traffic in Sydney, Liverpool Street, just behind George Street, which is like the Orchard Road of Sydney. I know that it used to take seven minutes from the CVD to my house, it took 40 minutes. So I was stuck and really angry and then bicycle keep riding past me. And that was in early 2017. I was like, Hey, I could have just ride bicycle to the CVD instead of just stuck in the traffic or getting jam. I mean, finding Sydney parking is crazy expensive. One hour could go up to 30 SGD, so I was like, why am I not doing that? So I thought it could be a business opportunity, right? So what I did was I actually paused my study for one semester. I start Googling, Australia is like down under, it's like very far away from everywhere. So I'm not sure, even 2017, I'm not sure, I don't know existence of Mobike or Foo already. So, but I start doing Google, I was like, oh, interesting, there are already such company as it in China. So I took a three-month break, I think. So I went to China to play with, download about 200 over apps. Pay deposit for almost all the company and then play with the app for about two months and then to learn about the industry. So it's a good thing. I mean, part of me was very sad that, okay, my idea is not fresh anymore. There is a really very strong company, but another good thing is I got to learn because there are so many already like this company.

So I learned it and then after that, on my way back to Australia, which I passed through Singapore on purpose, because it's a country that I grew up in, right? So I passed through Singapore on purpose and then there was already OBIK launched for about one, one month. I was disappointed a little bit but disappointed in a sense that I'm not, again, not a first mover anymore, but Singapore was not my first consideration. Australia was my first consideration. So with that, I stayed for one more month. And then again, I was there for one month mobile for launch. So just nice whole three months. I think I get to get a claims of the China market, which is already very mature with 200 of a company, a claim of Singapore market, which already a three company and they are coming in very huge.

And then after that, I go to Australia to register a company, start a company. But a few months ago, I realized that of course I finished my university during just a few months too, but I realized that as I understand the business more during then, the Australia city density the population, and how don't really make sense for me to launch for the first country, so I still decided to come back to Singapore and started Anywheel. So next month, September, we will be celebrating our seven year of incorporation in Singapore.

(07:44) Jeremy Au:

Wow.

(07:45) Htay Aung:

So that's kind of my, how is my university life like, you know.

(07:47) Jeremy Au:

Yeah. And, when you said that, you're looking through the Singapore and the learning side were you not discouraged or encouraged by these guys already? There's so many of them and then they're already launching in Singapore. So wouldn't you be discouraged? How did you feel?

(08:01) Htay Aung:

I mean, at first I was discouraged, but as their expansion grew, as someone that grew up in Singapore for like past 20 over years, I realized that the way that they launched their device without a license, they just deploy as many bicycle that they could financially, I think, to get a market share, I guess, and I kind of gambled a little bit at the authority here, which is either Ministry of Transport or Land Transport Authority, what definitely introduce some sort of restraint or license to actually control the flip sides. So I saw that as an opportunity, like they can continue to grow as quickly as they would like to, in Singapore. One, the deployment is very easy, but if the collecting bad, there will be a major headache.

So I kind of bet on that, also bet on my understanding of Singapore. To start, let me start slow. Let me like get a foothold. I'll get a foot into this industry first and use my knuckle knowledge to understand the authority better. And at the same time, if my guess was right which very intense phrase, right? Lessening came and then it caused a major headache to a lot of the, the bigger you are, the more headache they get. So I kind of bet on that. To build an opportunity there, I think let the big boys fight among each other, they were in on us at the start. So we are kind of like shadowed by their competition, which has also covered us to really build our foundation well.

(09:09) Jeremy Au:

So, when you started and moved back from Australia to Singapore, obviously, now, you're many months behind that of the Chinese players are launching in Singapore, etc. So what was it like? How did you get your first bike? Did you buy it? Did you borrow? How did you start your first few bikes? Your number one bicycle, I guess.

(09:26) Htay Aung:

One bicycle is very, very very painful process too, because during then, those bicycle manufacturer, those factory they are not interested in us at all because during the time we just go there like, ah, we just want 500 bike, 1000 bike. We are not even talk, talking about one bike, 500 bike to 1000 bike. Most of the factory don't even entertain us because during then the business from company like Mobike, Ofo, Obike, and those 200 over companies from China, they are already in, easily five digit or six digit or even seven digit per month we are talking about. So we, like most of the factory that we talk to don't even entertain us.

So, I usually actually get the head of one of my China friend the relationship to get us connected to Phoenix actually uh, Feng Huang Tanche, they are the uh, I think second biggest in China and manufacturing capacity bicycle. So get us linked and then that's how I get entertained. But for the first few months what I was doing on my own, no factory border about us. Firstly, most of them during then, have not even heard about singapore, Or they don't have an impression of singapore. The impression is about oh, it's very clean country, a clean country and a lot of greenery, but they have never been there, but one thing they know for sure, the market is too small for them to care at the moment. They were very busy with the already supplying bike for those China 200 over players. So yeah, so it was very tough It took me almost half a month to get one first bike from china to Singapore. Our very first bike.

(10:39) Jeremy Au:

How did you negotiate that first contract?

(10:42) Htay Aung:

The first contract was like I did firstly i'm very thankful to have my friend that I met in Australia, which is connected to Phoenix. So they give kind of like a very fair, assessment of our company and also price, I will say, and also give a lot of value insight into how a bicycle sharing bike should be. So that was very helpful. Then, yeah, after that, after we confirm the color, the specs, everything. I just say that let's at least ship one sample to Singapore. But during then, it can't unassemble, you know? So I didn't even know that I had to tell them to assemble or not assemble. So it can't unassemble. So during that, we don't even have an office. Anyone don't even have an office yet. So I bring the bike to my house, assemble everything on my own. My wife was like, what are you doing? I was assembling a bike. It took me, it took me two days to assemble the bike. So I just called the factory, I do, do a lot of video call, can you teach me, you know, so they kind of lose patience a little bit.

They were probably like, wow, why are you calling people? So amateur, like that? But really, really that was the first bike experience. Took me two days to assemble and then I think I was making too much noise. I even went, bring that down enter my house to assemble and all the neighbors were like, what are you doing? I was like, assembling the bike. Is there a company? So during that assembly, I really started to share the story, but all of them was I passed, wait, there is really Mobike, there is really Ofo and you are just examining a bike. What are we doing? So it was quite interesting experience with the first bike.

(11:49) Jeremy Au:

So it was assembling one bike right? But you know, obviously you can't do a bike sharing with just one bicycle, right? So how did you get that first 100 or first 10 bikes? How did you think about that first launch?

(12:00) Htay Aung:

Right. So after the sample bike has arrived and finished, I finished assembly using my own hand. I tested for a few days. Luckily, I did not follow a Vice President, so that's a good sign. So I just give a go ahead to our China supplier to say that, we are ready for 1, 000, so immediately shipped 1,000 over and then during the end of one, after the order, order is placed, we start looking for warehouses and then start building our team lab.

(12:22) Jeremy Au:

So what was it like? You have 1000 bicycles, obviously, you need money because, I don't know how much your bicycle was at that point of time. So how did you kind of pushed that?

(12:31) Htay Aung:

So, firstly, I raised my fund from a family of friends, the first round also because I already used to work on it. Oh, sorry. One big part that I miss, so I already kind of want to be very independent even during the holiday. So I work during the holidays too. Not sure you heard of New England Mail? Like the last time I have used, everyone wears singlet and you know, have different country one. So I used to wear, they are, they are, they were the sole distributor of a Havaianas slipper. They are the first and so, so it's very big for them. So, I used to work for that. And then, I also worked as barista in Australia in Gloria Jeans. So yeah, and I also work a tennis coach last time, even during my secondary school day and body day. So I earned quite a bit from that. I think I was already earning close to six digit in the during my body days as a tennis coach. And I have a habit of saving and working out.

So, yeah, I kind of for 1000, but uh, with most of my money, with most of my saving from all the all the work that I did during my poly in uni day, it's kind of enough to fund, enough to fund that 1,000 bikes of course I still have to ask from my parent there. So yeah, they chip in a little bit just to secure because those are only enough enough a bike. 1,000 bikes already cost of buy things like 200,000 and then we still have to talk about offices, we didn't even have that. We only have warehouse. We also have to talk about hiring of staff so yeah, my parents come in for the very first part of investment, and then after that as company grows, I start to look for my friends. A close friend that want to be, because most of us graduate at the same time, all was looking for opportunity and they also saw that as an opportunity. So I also get investment from some of the friends for the first capital.

(13:54) Jeremy Au:

Amazing. And then what's interesting is that, you said there was a thousand bikes, so then you have a warehouse, right? So I guess this time it came assembled. I don't think it, you had a, I guess it was already assembled this time around, but still it's a lot of space. So what was it like?

(14:06) Htay Aung:

Oh, it was a headache because it can't resemble, but the thing is during the time, right? I mean, I think I grew up in Singapore too long, kiasu (惊输) and kiasi (惊死), ah. So, what I did was I don't dare to set up my own tech team. So every, our lock, right? Even though bike belonged to us already. Our lock, our back end, front end, which means the app. It's all outsourced. The company that we outsource all this from is quite legit. They are invested by a very big company in China, in very big money. But the thing, and they are, they are also a huge supplier of Ofo and Mobike. So, in my mind, as a fresh grad, I thought that, okay la, this is already a big company, very solid due diligence, very big, very good piece of information to determine that they are a legitimate company. But what I neglected due to my lack of experience, they have never get out of China before. So the IOT and the system that might work in China, might not work in Singapore.

So this is my as a startup founder during that, and as a first grad, then something I fear to consider, my mind was like, they are the big supplier to all these big company, they should be super legit. And they are invested by a big company, distributed ledgers but proven to be wrong, firstly, after the bikes arrived, we turn on the app, cannot unlock. The IOT inside, the, the, the chip inside is not compliable, not compliable with Singapore, or the telecom company. So it couldn't unlock. That's, that's one thing. And then our app also keep crashing. And then because we are only 1000 and what I realized as such a big company, because they have big client, even though they turn around, of course they want more customer, right? And of course they want the overseas footprint. So for them, they just say, yeah, yes, yes, yes. But after pay the money and then the bicycle is in Singapore, we don't get the support that we needed.

So it was a big headache. So the bicycle I'm glad that you asked because we spent. The me and myself and my GM that drive me even until today. So my GM in fact, my GM had the company code is number one. I'm number 2, because he tried earlier than me, to some extent. So even we sleep at a warehouse, we sleep at a warehouse during Chinese New Year. We sleep at a warehouse during Valentine's day. So we even joke that we spend Valentine's day together, in the warehouse. And then we have a lot of part timers sleeping with us, to repair the bike, to to dismantle the lock from the bike. Unscrew everything, and then to plug in wire to hard reboot it, because the app now is not working to unlock it. So that was the first few months was really really really tough. So even today we have a joke anyone that have to be want to become a management level of any work, has to sleep in a warehouse for a few days. There's a joke going around to really feel the hardship of the myself, my GM, and some of the part-timers have felt for the first 1000 bikes, so we couldn't learn the first 1000 bikes until I think three months in the warehouse which is very very painful.

(16:25) Jeremy Au:

And how did you find your early team, right?

(16:27) Htay Aung:

So, my GM is my secondary school good friend and then I am very happy so, I trust him for, I trust him with a lot of things since secondary school days. And I think that's why when I come back, I just nice to come to set up a company in Singapore, you need a local director. So he called me as a local director first. And after that, I was like, Hey, why don't you join me? He was a bit hesitant because the startup and he was working in, you have got a good job in La Senda and the 3M, before that, I think it was a 3M. And after that, he was in La Senda for about two years. He was very hesitant. He was like, I can help you part time. Then after that, because I just come back, right? I don't even have an employment pass. So after that, he decided to try and become the first employer of Anywheel, I've become the second. So that's how the story is. So yeah, then after that as we built more, so he, we'll start with he and me for almost one year, I think.

(17:05) Htay Aung:

Almost one year after we decided that we cannot tahang anymore. Two of us is really, we are stretching too much, but we are at the same time trying to save cost. We are stretching too much and we say we have to start to hire more then we start to look into all his, all my friend contacts, all his friend contacts. Those that we can be trusted. But mostly it's his lah, mostly it's his contact. So that's how I work, but I also get a lot of questions like isn't it, like not very fair or not very smart to do that because we are getting friends, but my idea is that even today, I've been telling my team, everyone right seven years and i've been telling my team that even telling myself, we are in the business that really requires brain. I mean not really a smart thing to talk about right now, because everything that we do currently, that we can learn from a lot of the international players in China. There are three player, very big player, each have 20, 30 million bikes that we can learn from. In other country, we have Lyme, which was already taken by Uber. We used to have company like Bird, you know, we learn from. So it's during the first few years. I mean, we can't say the same now, but during the first few years, when we set our team, there is not much innovation there to be honest. It's more like how do we get this thing work? Do we believe in this micromobility sharing in Singapore if all were believing how do we get this thing work? How do we learn? So I need more trusted people and hardworking people than intelligent people. I mean, don't get me wrong, they are still intelligent. I mean like, people with a lot of information, right? So in the earlier thing is a lot of trust and we get a lot of friends to come into the company and I'm very happy that most of them stay in our company until today, even as the company grows, so this is how we started a bit of our first team, friendship and trust, and hardworking people.

(18:30) Jeremy Au:

So, in the early days, you're totally right. Everybody was copying from each other and everybody is learning from each other. So what were the things that you deliberately copy? And what were the things that you learn that you cannot copy?

(18:40) Htay Aung:

I think what I copy in time like, the entire app, because we don't have to design anymore. So it's more like just changing the color theme. And then also what I read, I cannot copy is the operation. And also the price. Let me separate that. So operation, I think firstly, they will have a very strong backend to tell them that. Where are the bikes? How is the ridership? Where should they go and collect the bike to redeploy it, at what time? So this is something that we don't have um, this backend we had to build, right? And our third party supplier don't have such a mature backend. Even they have it, it's for China. It is not meant for a market like Singapore where MOM really care about the welfare of all our staff because they are, they are schedules at 24/7, and then it is really their KPI is based on per bike, it's always very very tough KPI. That's something that we cannot implement in Singapore.

Firstly, we don't have the backend to implement during then. But our bicycle itself is at that time only purely Bluetooth. We don't even have a smart lock like now there. Each of our bike actually have a Singtel 4G SIM card. So we are one of central biggest client with 35, 000 SIM card paying every month. So now we are able to track everything, but during that we cannot track. So this is something that we cannot copy. So we have to kind of manually learn from our operational staff, where to deploy, how to deploy, when to deploy, how many to deploy so that was one thing that we feel that we cannot learn because we don't have the backend. We don't have the tech. So we have to make very, very manual. And then the price, because most of them are fighting price war to get market share and they are backed by all this Alibaba backed by Tencent, and we are not, we don't have such a papa to back, right? So we quickly realized that we cannot go into price war. We have to start charging from the very start. So this is something that we do.

And then we also not only for survival, but also mainly because we noticed ,that how long can you sustain? We are not here for the runaway, right? During then, we are not here to get a venture capital fund to really grow and just as it you know, we are not that we we from the very first day, we know that it's a long term business that we want to do for a lifetime, hopefully. At least today, I'm safe within the fire. So this is something that we don't go into price, and the second thing that we quickly learn and I'm very glad that all of the player in singapore and across the world collect deposit. We, from day one know that we don't want to collect deposit because due to my actually I, I did started anywhere in Australia for a few months and we collected deposit but not, not using Anywheel company name it's using this company called Murph. It's my very good friend's company.

(20:41) Htay Aung:

So two of us, very funny. We are very good friends for universities. And then one day, about to graduate, we tell each other we have a very good idea. So, after that, we talk in a cafe and both come up with the same idea. We want to start bicycle sharing. So, after that, I told him that okay let me just go over to Singapore. For Australia, I will just invest. I will just, I will just put the money inside, then let you run. So that we You know, we don't, we don't compromise each other as a good friend. So, but during then we, so that that was already launched in Australia and we quickly realized that we call it about 70 AUD, Australia dollar per user to use the bike.

We quickly realized that there are a lot of deposit sitting in our account. And then we quickly realized that because they are other shareholder, the shareholder are very tempted to use this money to go and buy more bike. So to use the money that we don't have, so I'm quickly as a minority shareholder, I cannot make a decision. I cannot have any veto, right? So I quickly realized that it's very dangerous.

(21:29) Htay Aung:

It's very, very dangerous to do that. So when I set up Anywheel in Singapore from day one, no deposit. So I think we are the only one in the definitely in Singapore, definitely regionally can say that from day one, we don't need deposit. So this is something that we learn. We learn also firstly is to control ourself because with those money sitting inside. Anyone, any human will be tempted to use it. So I don't even want to have the temptation. And even, even if I control it, if I start to have VC and shareholder involved, they will be tempted to use it too. So I don't want, want to have this money aside. So this is something that we learn and adapt. No deposit. And then from day one, we have to charge. And in fact, I'm very glad to share that from day one until now, our rate will stay the same.

(22:04) Jeremy Au:

Amazing. I think this is really helpful because a lot of people want to copy but you have to figure out what to copy, what not to copy. How did you figure out the operation side? Because I think a lot of companies died from that, right? Because they didn't know where to put them, they didn't know where to pick them up. But also there's a lot of bicycles that get lost. A lot of bicycles got stolen, as well. And then obviously it's raining all the time in Singapore as well, right? So it must be maintenance and everything. So can you talk to me about that operation side?

(22:26) Htay Aung:

Sure, sure. To start with because the bicycle home we designed, we already know that it's gonna be it's gonna be for sharing. It's meant, it's meant to be heavy usage under different weather circumstances. And also, of course because out in the public there will be theft, but I will lift the theft part for later, the juicy part of it. So the bicycle is supposed to be already robust, but of course due to our lack of experience from this, due to my lack of experience from the start, we order supplier and then we order parts, right? The bicycle stay RAS bicycle stay SPOI for the first few batches. But the good thing is we are constantly evolving. So up to today, seven years in, we already have five different batch of bike, five different generation. So we, each batch we take feedback, we know which is a part that's spoi, even though we thought it would not be spoi. So up to today, I'm very happy to say that we already have our own, another office in China that do all the procurement.

We also control the production line of the factory. So now we source for 70 percent of our parts of the bicycle and then we just last time you just we just go to Phoenix, Okay, you assemble everything else. We don't we don't know the supply chain. We just pay you one time off but today, fast forward today we procure 70 of our part and then we ship it to the factory. So the factory basically only assemble. So what it does is we have a lot of quality control on our own, and then we also significantly bring the price down. We are more bargaining because the factory just become assembly line. We have a strong bargaining power over our supplier and also our assembly line. So this already improved. But what we didn't know is that we didn't consider, right? Because our first market is Singapore and we, Singapore is still our HQ today.

(23:49) Htay Aung:

We thought Singapore would not have a theft issue, being I mean, one of the most recognizable country and reputable country in the world, right?

But unfortunately is most of our theft issue happen in Singapore. We were at our peak, right? I mean, at our peak in terms of the cities we used to operate in Singapore, Malaysia, and Thailand. Now we are only in Singapore and Thailand. So, when we first have our first board meeting, firstly, my board of directors were very against me going, expanding outside of Singapore for the, for the first, for the beginning of the Anywheel, right? They worry about the theft rate in other less developed country. And then after I explained the three country, had my first board meeting, I report that we have 3000 bikes stolen because during that also just nice, we have smart lock ready that we can track where the bike is and, know, have same kind of insight. So we have a lot of data to track. And then I report the first board meeting, I say that we have 3000 bikes stolen, and then I get scolded by all my board of directors, told you not to go to other country. You just don't listen. Then so, it's actually in Singapore, all these bikes. Thailand, zero bike stolen, Malaysia, zero bike stolen.

They were like, you have data, something wrong. Your backend is wrong with it. You have to double check your backend. I was like, no, no, no, no, no, no. We get it verified. We get a check in Singapore. So I don't blame them because for someone that grew up in Singapore, like me, I was also very shocked. So, I was very, very shocked. So we, of course, improve our bike. We improve our bike from there on. But again, there's a saying in Chinese. “可以防君子不可以防小人,” So we can we can safeguard majority of a good citizen, sorry a good resident, but we cannot safeguard a very small percentage, which every country has, even how developed. And we also very clear that we don't want to because of this very small percentage of the irresponsible users affect the experience of 90 over percent of very good users. So even though we make improvement in our bike to more anti-theft, but we also don't want to spy the experience.

So during COVID it got worse because I think a lot of people have no job and a lot of people have nothing to do. So they start to steal on our bike. So if you look at one of our Facebook posts, very organic. We never boast about it. We have 300 over thousand, impression five digit like and a few thousand comments. We started to have our own enforcement team go around neighborhood to catch people that stole our bike without downloading our app or without using the app. So it instantly become a quite a popular, I think all the news covered it. All the mothership, all the SK, I think all the small one all covered it. So from 3000 across from now, I think it reduced to about only 1000. So 3000, 5000, and then now it's about 1000 but during that we only have 10,000 bikes. So in terms of percentage, we are significantly bringing down. All these are true.

And then also, honestly not to blame them, because even when we file a police report during that SPF police officer, bicycle sharing stay around, and some of the people that we catch they feel that because bicycle sharing is all gone, so this bike are left unattended, so they can use it, so, for us, that's something that we learn also. So we don't blame as well. We really take all this feedback very seriously. We don't go straight down and say that, okay, you cannot steal it. It's your fault. We feel that there's a lot of things. We take feedback very seriously and it's something that we can improve also. So I'm very glad that as our company grow that was in 2021. As our company grows, more and more people start to know the system of bicycle sharing stay in Singapore. More and more people are aware that Anywheel is a company that stays as it. So the TAFRA, also with our ongoing FOM enforcer more and more, less and less TAFRA in Singapore now. So it's very, very good news for us.

(26:41) Jeremy Au:

Amazing. So, you know what's interesting is that, that was very competitive, right? So there was like so many of those existing players and then more players started coming in as well over time and a lot of them were VC funded. And then, it was also crazy, right? Like you could park it anywhere, so people were getting angry. So then you said it was a licensing. So why did you win this competition from your perspective here?

(27:01) Htay Aung:

I think firstly, what I want to share, I bet on the license, right? I bet the license will come, or regulation will come. And it comes. And then how do we win? I think a lot of the company couldn't qualify for the first license because LTA licensement require the bicycle lock to be to be with GPS. That means you have to have a SIM card inside, cannot be just use Bluetooth anymore. So that you can track exactly where is the bike, who uses it, where it's being end up lah, so a lot of the company, Ofo instantly, Ofo get their license cancelled because hundred over thousand of their bikes in Singapore is all Bluetooth. There is no way that they're gonna change. They're gonna bring back the bike to change it. Or they're gonna bring a new batch of bike. It's very very hard for a company to do that and then Mobike also, Mobike from the very start. So Mobike is a company that I respect a lot. They are probably the only bicycle sharing winner in the world now. They were acquired by Meituan for if I'm not, wrong 2 point something billion US dollar and then, from the very start, they are already ahead of the game. They are one of the first to launch all the smart lock with IOT, with all the things, right? Obviously, they are not affected. So for us, we also, how do we prepare for that? So from day one, we also go for the IOT lock, even though we don't have the capacity at all.

Even when we outsource it, we know it's more expensive, more complicated. From day one, we said no bluetooth lock. I want to have a smart lock that have a backend to track all the ridership, all the location, right? So this is a plus for us. So when the licensee come, the bike on our road is already license compliance. And then a lot of people don't know that each of our bicycle all the operator in Singapore, as long as you are licensed, our system is connected to LTA system. It has to be live. We have to report it every 30, if I'm not wrong, every 30 minutes or one hour, we have to report live location to LTA backend. So all these consume a lot of technology and consume a lot of battery.

So, we kind of, from day one, I already prepared for that. So when the license came, we wasn't hit. Wasn't hit very hard. So this also kind of differ us from many competition that just want to come in and then just want to come in and then deploy as quickly as possible. So we really focus on what the regulator will regulate us and then how technology will be for a sustainable business.

(28:50) Jeremy Au:

How did you know Bluetooth lock versus Smart IOT? Because yeah, you can know that the licenses will come one day, et cetera, but how did you know? Because that's, like you said, once they chose Bluetooth lock, they're locked in right Then they to throw away the fleet once the regulation came. But how did you know? Or were you just lucky.

(29:07) Htay Aung:

I think first of all, what I share, Mobike is really doing that from day one. They are doing that from China. They are doing for Singapore but for the bus to start with Mobike has an elite team, their management, five people is super elite, very respectable five people. So from day one, their vision is ready. They come from all of them come from car industry, elite NEO. The founder of NEO is actually Mobike one of the shareholders. So, they come from a, they're already building car, right? All the self driving and everything. So bicycle sharing, IOT, nothing for them. So I think that's how Mobike have a very, very strong start. And then eventually the question is we are a tech company. I mean, we are TNT company. I would like to call it tech and transport. So if you just have a Bluetooth lock that don't get any data, we are just a pure transport company.

It's not sexy in the 21st century. It's not useful for us to grow. So we, from day one, we know that we are, that we, 50% of us is definitely tech company. So we want to, from day one, we want to have a with or without a regulation, we want to have a smart lock IOT that give us data. So this is how of this is how we plan it. So not really how we know in advance or how we know the regulation account. It's not like that.

(30:05) Jeremy Au:

Yeah, and when you see, the people start to exit, right? Obviously because, like you said, some of them were spending their customer deposits and then went bankrupt, etc. So you had to start taking over fleets. Why did you make a decision to take over the fleet? Because, sometimes they can be scrapped or whatever. How did you approach that acquisition process?

(30:22) Htay Aung:

Right? So, there's too much. Just now, I think you also mentioned about VC, right? So anyone actually did talk to some VC during 2019. We actually did reach some agreement some term with one of the VC, give us the valuation that we want, but we did not take the money because the way we want to spend the money is very different. So this particular VC, they want to spend a lot of the money that we raised to actually do, to acquire customer through advertisements. They want to boost up the app download in the shortest time possible. So I strongly disagree with that. Why I bring up this point is because many of the companies feel because they take on VC money, they just throw the bicycle and they spend a lot of money acquiring customer with free ride. And then you can see the advertisement everywhere getting celebrities, getting celebrities in China or mobile for the celebrity. They get something that I can only jealous about.

And then also they even have promotion like 5 million, which is 1 million SGD a month. Every day, you can win 20 iPad, unlimited Apple Watch. So, these are the kind of money that the VC that reached a term with me, want me to spend in the fastest model of the company. For me, I strongly disagree because it will kill the business. What if I acquire 1 million users through all these customer acquisition channels like, YouTube or Instagram or Facebook or whatever, right? If my bicycle quality, if my backend, and if my bicycle is not there, they download the app, they don't see the bike, they won't use it. So I argue back to VC saying that this money, most of the money, I want to use in buying bicycle, improving the quality of the bicycle. I want people to see the bike every day, to see it's a responsible source and reliable, good, clean bicycle and download the app. Not because they see advertisement and they go and download the app and don't see the bike. So, this also set Anywheel very different from other company that's strongly dependent on VC money.

Sometimes I think the founder, they know what they are doing, but they just cannot control. They have to expand quickly to raise more funds because they are burning so much. For us, we don't use that approach. So we tried to raise money before, but we did not. But of course, next question that you might have is how do I get money? I go and talk to my parent, I mean, that they have some property in Singapore. I, my offer in there, I told her that, okay, you have a few sons, some of the property is actually, I think it's for me, you're going to eventually give it to me. Why don't you give it to me now? So I sold off those property in Singapore that is meant for my myself or meant for my kids. So it's very tough. But yeah, so this kind of set up very different from other company or so not only we know Singapore market better. We also don't take a very painful decision not to take a VC money to really control our own destiny and our own timeline, which led us to today, and that's the first part of it.

So second part is for SG bike, I think you're talking about acquisition n of SG bike this year. I feel that as the biggest operator, we have to have the responsibility to take over because in the term condition I am not very sure that whether they will return it the unused credit or not. In their terms and conditions, they shouldn't, they don't have the return in their term and condition, because they already say it's paid and everything like that, right? They got it covered. But on me, I'm thinking that if they choose not to return, even they have the right not to return, it will cause another negative impression of bicycle sharing industry in Singapore and across the region. And we as the remaining player and the biggest player cannot afford it. We've been spending the past four or five years doing our best to build up the reputation of the industry, not only us, of the industry, to gain the confidence back of the of the Singapore resident on bicycle sharing. We cannot afford to let another company that we cannot control to burst this, burst this thing that we built up. So, I approached the the founder of SG Bike, who is also a good friend of mine. We are competitive, but we also constantly checking with each other to see that is there a possibility that we're taking over.

So that what we did is we don't take over any fleet. We don't take over any liability. All we take over is the user. So all the credit that in the unused credit that in SG Bike now is transferred to Anywheel not only that, if they choose to opt in earlier to Anywheel platform, they get $10 more. So there is no reason that a user should complain because now they are using the same service in a bigger and better platform, and then at the same time, they have more credit to use. So it's really to take over the is the takeover is really purely to maintain the reputation of this industry. It actually do us a lot more harm. We spend a lot of money to give the credit, even though we give a lot of credit to all the user, which is huge money at the same time. We also worry of the reputation risk because up to today, even some reporters misunderstood that we took over their fleet. Even some people misunderstood that those bicycle, on the, stay on the road today, belong to Anywheel now, because we take over it, it's our responsibility to go clear, it's not. And also, we took on a lot of the reputational risk but we still feel that it's a war for war, and it's a responsible thing for us to do to make sure that reputation is not tarnished.

(34:34) Jeremy Au:

And could you share about a time that you have been brave?

(34:37) Htay Aung:

So, yeah. So just a time. So, because a few years ready so I can share our 2018 revenue, not profit revenue for entire Anywheel is five Singapore dollars. And then our entire revenue in 2019 for Singapore, I think is only if I know around 70,000 five digit. So it's either make or break already. It's either make or break in the sense that like my board of directors, my investor, my friend, everyone that invested in me was like, maybe we should close it. We have given try, good try. But during then, all our app, all our backend, all our lock is still outsourced. And during then 70% of our lock, bicycle cannot be unlocked. Because the lock is not stable, the app is not stable. So I feel that I have not given it, I have not have fun with this company, I have not really operated this company before. And, so that's one thing. Another thing is that, during the time, because even though we have 10, 000 bikes on the road 70% is not working, but we have the biggest license in Singapore. During then.

And then some of the companies because bicycle sharing density in 2019 is still quite a topic that a lot of investor and VC is talking about in 2019 before it really burst. So I rejected VC and then I also rejected a buyout. So that was a two buyout offer that would give me 4 million net profit. In my mind, I'm just thinking, I was talking to my that was like, should I sell? Because as a 30 years old, my first real venture. I walk away with 3, 4 million net profit. I think I am successful if I did it. But something that my father asked me really made me change my decision. It's that, if you don't sell, where do you think this company can grow? Do you think you have really reached your full potential with this company? Will you regret it one day? For me, I was like, yeah, I have 10,000 buyers, 7,000 of them not working, you know I'm selling, I have this type of money to sell is because, purely because of my license, not because of my fleet and everything. So if I said it, I'll be like, I wouldn't be proud.

Even I walk away with 4 million Singapore dollar. I wouldn't be proud in the sense that I have done nothing with this company. I only learn failure, fast forward, I only learn failure. So I think I was brave enough to reject 4 million net profit. I was brave enough to reject VC and go to my go to my, parent uh, offered them, saying that, I mean, they are very, very, very healthy, you're going to pass it to me eventually. Why not do it now? Then after that I very thankful that they gave me those properties. They're supposed to pass it to me 30, maybe 30, 40 years down the road.

And then I sold it. I sold those property in a few months and then pump all the money into Anywheel. So I think that was really brave because during that, I already have my first kid. I already married, have my first kid. And then my wife also have a lot of concern. you know, maybe you can walk away 4 million if you did not, you can take VC money if you did not. You already have a few property that will be under you if you don't go and screw up, and then just start something that. So a lot of question marks, even I thought myself for a few months but yeah, I still decided to do it.

So I thought that was quite brave and then all the way until now, I'm very thankful that I made that decision. Still not enough to buy back those property, but I think the direction is there for us to, we hit our first profit, operationally profitable last year. And then this year, Q2 was over, we just closed our Q2, Q2 this year compared to last year. Same Q2, we are about 30% up in terms of revenue and in terms of revenue, user and ridership. So, the company is not slowing down yet. This is something I write down, so that I took that decision rather than took the 4 million and rather than took the 4 million net profit after minusing all the money that I invested and then also a decision to continue to pump more money into this company.

(37:44) Jeremy Au:

Wow, thank you so much for sharing. So, on that note, I would love to summarize the three big takeaways I got from this conversation. First of all, thank you so much for sharing about your early inspiration about setting up Anywheel when you were a student that moved to Singapore and taking the opportunity to study in Australia, going to China to see what to do, what not to do. Really inspiring to hear about how you eventually went off to, get your first bike even, right?

Secondly, thanks so much for sharing about what your process was for launching and growing companies. So the mistakes you made in terms of ordering a bike that's unassembled to ordering your first 1000 bikes, but you know, the lock doesn't work. So you have to change it. So I think it was great to hear the mistakes, but I think it was really fascinating, especially the part where you're talking about what are the things to copy. And what are the things not to copy in terms of the operations, in terms of the price point, in terms of the deposit. So a lot of learning there.

Lastly, thanks so much for sharing about, I think the tough times, especially around capital and decision points, right? So, you mentioned about the early days, you could fundraise with friends and family, but then you said there were multiple points you could decide to sell, cash out, because the company was not doing well, all the way to turning down VC money, turning down buyer offers, putting more money of your own into work. Even using that money to also then go acquire another player. So really fascinating to hear that journey and thank you so much for sharing.

(38:57) Htay Aung:

No, thank you. Thank you, Jeremy, for giving me this platform to share Anywheel's story.