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Crowdfunding pays off for start-up Ambi Labs

SINGAPORE — Until a few years ago, the concept of crowdfunding — or raising capital for a project or venture from people through the Internet — was viewed with scepticism. Today, crowdfunding is almost an integral part of the start-up ecosystem, with a growing number of websites dedicated to connect businesses with potential investors.

Julian Lee, CEO and Founder of Ambi Labs. Photo: Ambi Climate

Julian Lee, CEO and Founder of Ambi Labs. Photo: Ambi Climate

SINGAPORE — Until a few years ago, the concept of crowdfunding — or raising capital for a project or venture from people through the Internet — was viewed with scepticism. Today, crowdfunding is almost an integral part of the start-up ecosystem, with a growing number of websites dedicated to connect businesses with potential investors.

Take, for instance, five-year-old start-up Ambi Labs set up by Singaporean founder and CEO Julian Lee. The Hong Kong-based company gets its source of funding mainly through crowdfunding.

The start-up’s second campaign on the crowdfunding platform Kickstarter in May-June this year raised HK$1,215,905 (S$210,961) supported by 1,016 backers. This followed its first campaign earlier, which raised US$115,000 (S$156,000), exceeding its initial target of US$25,000.

Following the successful campaigns on Kickstarter, the start-up went on to launch campaigns on other crowdfunding platforms in Japan (Kibidango) and Taiwan (ZecZec), with help from local partners in those markets.

The flagship product by Ambi Labs is its air-conditioning monitor Ambi Climate, which uses artificial intelligence (AI) to track and control air-conditioning systems.

The AI technology builds a personal profile of the user, and adjusts the air-conditioner based on variable factors such as humidity and sunlight. This can save users up to 30 per cent of energy consumption, said Ambi Labs.

The motivation behind choosing to crowdfund as a major source of capital is that it allows the start-up to engage with its customers and receive feedback from the ground directly, said Mr Lee.

“The mass consumers who bought our first version (of the product) were not very forgiving. Early adopters in crowdfunding gave us loads of feedback and they felt encouraged when Ambi implemented their feedback. They could see the potential of what the product could be and not just what it was,” he said.

The company took feedback from the Kickstarter community to refine the product design.

To launch its first campaign, Mr Lee did not even need to fly to the host country of the crowdfunding portal, as everything from submission to approval was done online with Kickstarter. The team spent four months prior to set up the campaign, working on details such as the campaign page and shooting the video.

Mr Lee said he chose to launch his campaign on Kickstarter because he felt the international platform has the largest crowdfunding audience. Another reason was because the Asian audience prefers brand recognition, and would pay more attention to larger crowdfunding platforms such as Kickstarter, he said.

The start-up rewards its funders through products rather than shares in the company. The newest edition of the Ambi Climate device costs US$129. Backers who pledged a certain amount will get the device once it is ready for the market. But backers who pledged lesser amounts, such as HK$10, will not receive anything in return.

Crowdfunding, however, is not all smooth sailing. Prior to the Kickstarter campaigns, Mr Lee shared that Ambi Labs had previously tried to raise funds through Singapore-based crowdfunding platform, Crowdtivate. That campaign barely reached a third of its targeted US$40,000.

With hindsight, Mr Lee said the company had to work with a shorter timeline of four weeks, compared with the usual two to three months, as it wanted to coincide the timing with the launch of the crowdfunding platform. This was a possible reason why the campaign was not as effective.

The setback, however, did not deter the company from trying. Instead, it was a learning experience for the start-up.

“When the campaign fails, what happens from there depends on the company itself. Some companies use it for feedback, others shut down, others proceed anyway. We’ve had a first failed campaign on another platform. What we did was to review the failure and understand how it didn’t work. Then we ran our campaign on Kickstarter and it was a success,” said Mr Lee.

Even though the company is currently not profitable, Mr Lee shared that its year-on-year growth has doubled. Ambi Climate’s current headquarters are in Hong Kong, with a smaller office in the Philippines. It has more than 20 staff.

Going forward, the company plans to enter the retail scene, opening in more retail markets by the end of this year, with a focus on business-to-consumer sales in the next 12 months. It is also looking to set up a Singapore office in the near future.

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