>> We intend to remain laser-focused on building a smarter future with our growth initiatives and we are confident that the strong foundation we have put in place enables us to strengthen our FinEduTech platform further for the next decade.
Executive Director & CEO
8VI Holdings Limited
FY2021 has undoubtedly been another eventful year in 8VI’s journey since we embarked on our digital transformation. We have not only successfully circumvented the traditional earning challenges and limitations of a conventional education and training business in record time, but we have also rewritten records in terms of our progress – both operationally and financially.
In FY2021, 8VI has stayed true to our mantra of achieving ever more with ever less and that has shone through in all aspects of our business. Through our successful digitalisation efforts, we are proud to have brought together an integrated, smart and easy investing platform for a community of like-minded investors through a variety of value-added subscription products. Our community is at the heart of all that we do and drives our inspiration to continually improve and find new ways of fulfilling their needs.
By embarking on the right strategy, managing the right level of prudence in terms of our costs and expenses and embodying the right spirit and determination, our team has never stopped spinning the wheels of innovation. We are always working to further raise the bar when it comes to our VI App platform, ensuring that we look at ways to improve on our capabilities, features and how to amplify knowledge sharing and exchange with the VI community.
Following the successful implementation of our 3-year transformation plan in FY2019, we are today operating on a model where more than 90% of our operations are held online. In FY2021, we worked to further refine our strategy to ensure we enjoy economies of scale while keeping an eye on costs and cashflow against the backdrop of our broader macro-environment.
As a result, the Group recorded revenue of S$26.0 million in FY2021 as compared to S$10.9 million in the corresponding period in the previous year ("FY2020"), representing a growth of 139.1% with expanded gross profit and net profit margins. Of which, 29% of our revenue is recurring, a significant improvement from the 20.5% in FY2020, which is a strong testament to our successful acquisition and retention strategies.
We recorded EBITDA of S$9.5 million in FY2021, which represented a 246.7% jump as compared to the S$2.7 million reported in the previous year and EBITDA margin of 36.5%. Accordingly, our net profit after tax attributable to owners of the company soared 446.7% to S$5.9 million over S$1.1 million in the corresponding period in FY2020.
With revenue growth of 139.1% achieved in FY2021, accompanied by an EBITDA margin of 36.5%, we have also exceeded the Rule of 40, a performance metric commonly used for fast-growing technology companies, by 4-fold. Testament to 8VI’s transformation strategy, the Group has grown its EBITDA at a faster pace than revenue, thus achieving operating leverage in FY2021.
In FY2021, we maintained a strong financial position with cash and cash equivalents as well as short term liquid assets totalling S$22.2 million, as compared to S$7.8 million in FY2020, and remained at zero debt with S$9.8 million unearned revenue to be recognised.
Cash receipts from customers have increased significantly over the last nine quarters. Cash receipts from customers for the fourth quarter of FY2021 stood at S$10.7 million, up 118% as compared to S$4.9 million in the fourth quarter of FY2020.
Cash flow from operations have increased significantly to S$16.8 million compared to S$3.9 million in FY2020, while free cash flow stands at S$15.6 million, a jump from S$3.6 million in FY2020. This was attributable to improved performances across both our Financial Education and FinTech segments.
We also made a significant breakthrough this year with VI App, developed through 8BIT Global Pte Ltd ("8BIT Global"), which garnered regulatory clearance as a Licensed Financial Adviser approved by the Monetary Authority of Singapore. This means we can provide financial advice on securities and units in collective investment schemes through research analyses and research reports via VI App.
The license enables us to demonstrate more conviction on our research and development and put forward detailed recommendations based on VI Analysis, our proprietary rating system. The system allows our users to immediately verify the soundness of the target company’s financials and show how valuations are derived. These features are designed to aid overall investor confidence in making smarter, faster and easier investment decisions.
STAYING TRUE TO OUR FY2020 ACTION PLAN
Adding breadth and depth to our acquisition, retention, and technology development efforts
The ability to generate a unique and robust content flow remains key to how we acquire potential graduates, which entails planning, creating and deploying content across various platforms to build engagement and feature the new additions to our educational programmes.
This year, we have broadened our content creation efforts on many levels and across regions to ensure we reach a wider audience set and engage with them in more meaningful ways and in localised contexts, whilst building awareness for our brand.
By ensuring a robust content calendar and leveraging our owned social channels, we have extended our reach across borders both in Malaysia and Singapore through targeted, language-specific content. Following our success in Malaysia in reducing the reliance on direct marketing, we have replicated the same approach in Singapore by assembling a dedicated team that is responsible for content planning, creation and implementation.
We have been pilot-testing YouTube content in Singapore that feature real and relatable investment journeys of various individuals, who will share their own experiences and stories with other investors. We plan to roll these out in due course in FY2022, as our Singapore office had been integrating our digitalisation efforts to date. Meanwhile, we have set up two virtual broadcast studios in Singapore and Malaysia, which will allow us to host large-scale online events seamlessly across borders, such as the 10th VI Summit in January 2021 which saw a record number of more than 3,500 attendees.
Growth in users
10% growth in CMGR
LTM - Last Twelve Months
CMGR - Compounded Monthly Growth Rate
Across Malaysia and Taiwan, we also launched 6 new content programmes in local languages to engage with our audiences in those markets, and these have been well received so far.
From an acquisition perspective, we are also seeing the benefits of the network effect from the ecosystem. This network effect is a result of the virtuous cycle that originates from the content that we generate, which is then shared across various platforms to build engagement across languages and broaden our reach across borders to grow our community and followers. As a result, there are deeper opportunities within our ecosystem to drive collaboration through third-party partnerships with financial services agents, brokerages and financial planners. This not only effectively expands our service base and offerings to our existing graduates and community, but also contributes to how we can attract new, potential graduates.
Our success in acquisition is based on monthly growth in users and subscribers, as well as growth in Annual Recurring Revenue ("ARR"); both of which have increased on healthy levels in FY2021. We have also seen overall growth in our Total Number of Graduates of 450% at 25,926 pax in FY2021, Total User Growth Rates of 207% as well as Subscriber Growth Rates of 189% in the last twelve months, which is testament to our successful acquisition model. While we have seen our percentage growth in the past year stabilise over the course of the year, our growth in terms of absolute numbers have actually grown significantly. The success of various programmes such as our flagship VI Bootcamp reflects the success of our strategy, as these continue to grow in popularity and take up.
In the past year, we have been building retention amongst our graduates by bringing a customer-centric culture and mindset to the table, which in turn enables us to create entire lifetime value. Through the use of our planned CRM system to mine data analytics, we see long-term potential to build on our insights to improve the entire experience for our graduates. Once complete, our CRM system will build, link and leverage data to optimise both our operations and our product and programme offerings with the appropriate business intelligence. The system is currently being implemented and is expected to be completed in phases over the next year.
We also practice active engagement and content building via our VI Social Bubble, while providing content and support well received in the form of VI Coaching Sessions and VI Resources for flagship programme graduates. We have expanded our library of VI Resources this year as well across English, Malay and both Simplified and Traditional Chinese languages, with content to ensure that we continue to promote knowledge sharing and exchange amongst our community.
Our retention success rates are measured via performance metrics such as the Page View Growth Rate, equivalent to the number of average page views on our website, which continues to growth healthily in FY2021. We also measure success via our overall participation in VI Coaching viewership and participation, which has also been gaining momentum in the past year. For example, VI Coaching sessions in English have grown at a rate of 202% since its inception in May 2020 till March 2021.
Growth in average page views
iii. Technology Development
This year, we have continued to develop existing and new features on VI App that are designed to enhance the overall experience.
In relation to the AI and machine learning ("ML") aspects, we are already in the process of establishing a team of data science engineers focusing on enhancing various features within the VI App. The team will focus on using various ML techniques, working closely with our community managers and business analysts, to enhance existing features and possibly discover new features.
Some of the planned upcoming enhancements and premium features within VI App include:
“Enhanced Peers” which allows better identification of peer companies so as to unearth other opportunities that are in the same business;
“Dynamic News Feed” which presents relevant social news that matters and is aligned with the user behavioural patterns;
“Intelligent Alerts” which generates notifications that are relevant and deemed important based on the user profile;
“VI Score” which complements the Screener and Peer Comparison modules in VI App, while ranking the quality of a company based on historical financial and price-performance, ranking companies based on their quality for research prioritisation; as well as
“Guru Bubble” where a Watchlist is linked to a Social Bubble under a specific theme with a community built around the bubbles which encourages learning and discussion of specific strategies within the Bubble.
All these will not only improve user experiences but also allow users to quickly discover new perspectives in their investment journeys. These exciting developments are testament to our core capabilities as a technology company that integrates our loves for finance and education, as well as one that constantly seeks to stay ahead of the curve as we code for a smarter future.
Growing our recurring revenue model
VI App, coupled with VI College, is a cohesive ecosystem which is designed to make investments Smarter, Faster and Easier and without borders. Our value proposition is crystal clear: users can Analyse, Learn and Connect on all levels of smart investing using one single tool.
We leverage the unit economics of our unique business model, where unlike other technology start-ups that invest heavily in acquiring users through cash, our entry-level product range already covers our cost of acquiring a new potential graduate. As such, we are witnessing amplified benefits where all additional spending translates into positive impact on our margins, which we intend to re-invest into our growth plans. Coupled with our prudent cashflow management despite the pandemic, we aim to similarly establish our 80:20 model here as well in the long run – to have 80% of our revenue on a recurring basis.
With our digital transformation complete, we are doing ever more with ever less as a result of our technological capabilities. Ongoing digitalisation has further catalysed the changes and pace of change as compared to the conventional ways of operating. By integrating our signature programs with the subscription to our VI platform, we have achieved a massive breakthrough in the way our company grows and generates high-quality recurring revenue and positive cashflow.
lives inspired to date
25,926 VI College graduates in FY2021
187 new VI College batches in FY2021
Cementing our position in core markets
Today, we operate in highly successful and well-adapted English, Chinese and Malay language-speaking markets, with our operations in Singapore, Malaysia, Shanghai and Taiwan. In these markets, we have a physical presence while operating almost solely through online channels. Our geographical revenue also represents one of our 80:20 strategies, where we hope to work towards having 80% of our revenue outside of Singapore.
In FY2021, Malaysia accounted for 40% of our revenue, whilst another 20% comprised international income – a combination of revenue from other markets and our VI App subscriptions. Our Singapore revenue contribution stood at 40% meanwhile.
Malaysia remains a significant, addressable growth market of focus and together with Taiwan, continued to generate positive growth in FY2021. Malaysia has always been an important market for us with its large, multi-language population, and represents a much deeper market where we can capture new opportunities. Here, we are developing the market through bespoke content and learning materials catered according to local language and demographics, such as Shariah-compliant investing.
We have seen good traction in our Taiwan market to date, which is now operating independently with positive growth. On the whole, Taiwan is a more mature market which offers healthy potential as the local audiences are well exposed to investment-related topics and more receptive towards personal development programmes. The focus will therefore be to grow our presence and brand in the region with outreach activities and engaging social media content to reach Taiwan’s local audiences.
KEY TO FUTURE GROWTH
Digitalisation & talent, expanding our addressable market, and positioned to offer new products in the regulated space
We have witnessed a major structural shift in many industries, including ours, and in how we work amidst the ongoing COVID-19 pandemic. To adapt ourselves to these changes, we intend to invest heavily in a few key areas.
Investing for a smarter future – digitalisation & talent
We will be working towards progressive automation of our operational processes and a data-driven approach to analytics to enable us to achieve the best business results and optimise business decisions on the backend. In the course of doing so, we also plan to digitalise more programmes and integrate these programmes onto our VI App platform going forward.
We also plan to digitalise more specific aspects of our programmes going forward, for instance, for our participants in our VI Bootcamp, Full Edition programme ("VIB FE"). Within the simulated investing games offered in VIB FE, we are automating and incorporating the game portal into the VI App to enable more hands-on participation from participants and involve less manual facilitation and intervention from our team members.
This year, we set up our broadcasting studios in Singapore and Malaysia for the production of digital content to serve this purpose. As a borderless working culture becomes the new norm, our broadcasting studios are also outfitted with the requisite capabilities to host large scale events that transcend borders, such as our recent VI Summit 2021, which saw approximately 3,500 members in attendance – our largest VI Summit event to date.
Our 80:20 rule also applies to our way of working, where 80% of our operations will be digital going forward. With work-from-home ("WFH") practices here to stay, we have equipped our employees with the right infrastructure, hardware and software setups to ensure we are ready to tackle hybrid working arrangements. In the coming year, we will be looking to invest in a new space for our talents to come together to build a stronger brand and culture for the Group and team, ensuring that we are on the front foot and ready to face any challenges at any given time. In addition, we have also expanded our training and development budget so that our team members can benefit from continuous learning.
Last year, we grew our development team to be the largest component within the Group as part of our expansion plans. Going forward, we plan to invest a significant amount of our resources and costs into diversifying our human capital in various aspects, in order to find the right talent to strengthen our position in technology. Our quest to acquire talented individuals in the fields that support our growth plans is expected to accelerate further in the coming years, as we focus on acquiring the right skill sets in these areas. We are constantly looking for subject matter experts who have a passion for all things FinEduTech to join us on our exciting growth journey.
At 8VI, we have also continued to engage regularly with our team members despite working remotely as people are our greatest assets. We do so through events such as virtual birthday and life milestone celebrations for our team, regional anniversary events, as well as festive occasions such as our Christmas party in December 2020.
Expanding our addressable market
As we look at the total addressable market ("TAM") for asset and wealth management in the coming years, there is immense potential to be tapped. Amongst three core segments of the TAM comprising “Do It Myself”, “Do It With Me” and “Do It For Me” groups, we have identified a core group of target users, whom we call the ‘Do It With Me’ group, that we want to engage with at this stage.
These individuals are straddling the Millennial and Gen X ages of between 25 – 55 years of age, who would be keen to learn how to invest, and are willing to pay for a service that can offer coaching, ongoing support and case studies. They would also be the ones to use VI Analysis to make investment decisions.
In the longer-term future, we will also be keen to look at the “Do It For Me” group of users and ways to engage with them through more offerings on our platform. These are individuals who appreciate our investment philosophies and the learning offered through our programmes and resources, but still prefer to have a representative who will manage and invest on their behalf – a role which we can work towards fulfilling.
As part of our growth strategy, we hope to be able to cast our net wider to attract more potential VI App users. These could be avid, mass-market investors who may primarily choose to tap on the convenience of a generic, user-friendly version of our app for smarter, faster, easier investing. At the same time, we would also look at ways to expand VI College’s business model laterally with new offerings to extend the value chain for our existing and new customer base.
Positioned to offer more regulated products and services
Having secured 8BIT Global’s license to provide financial advice on securities and units in collective investment schemes through research analyses and research reports via VI App, we believe we are in a position to explore offering more of such regulated products and services that are complementary to our existing FinEduTech business.
Tapping on our capabilities in using data, analytics and AI to analyse our users, incorporate risk assessment and better understand our users’ investment styles, we plan to integrate complementary financial services on our VI App platform where we see synergies and value-add to our community. By making inroads into these types of regulated services, we believe we can further raise our competitive edge in the long-term by extending our position on the value chain – all towards our ultimate goal of building a smarter future for our community.
GIVING BACK TO OUR COMMUNITIES THROUGH SOCIAL INITIATIVES
Our roots are in the financial education sector. As the origin from which we have built our business since 2008, we therefore identified education as a material, guiding pillar where we want to contribute and share our knowledge on finance and investing within the communities where we operate. Our social impact initiatives going forward will also be centred around FinTech as we see technology as the way forward and is an important part of our future which drives us to stay vested and do our part for advancing technology for the future. Based on these, our vision of empowering growth and transforming lives through VI College and VI App now extend to our community efforts.
With an aim to empower and encourage financial literacy among young adults, we established the “VI Club for Youth” in Malaysia - a financial education platform that is freely accessible for students between 16-24 years old. Designed to equip young adults across the globe with proper financial knowledge, our initiatives in the pipeline include a series of talks, both online and offline engagement activities and partnerships with universities, amongst others.
In partnership with Nanyang Technological University ("NTU") of Singapore, we have also established the VI College NTU Bursary Fund for the School of Computer Science and Engineering, in support of NTU’s vision of ensuring that every deserving student has access to quality education while also remaining true to our aim of advancing technology by supporting education.
In December 2020, we also contributed to the Singapore FinTech Association’s efforts to raise S$100,000 for the NTUC-U Care Fund under the “FinTech for Good initiative” to provide financial assistance to lower-income union members and families.
TOWARDS A SMARTER FUTURE
Having emerged stronger through the disruption a year ago, we are set up and ready to face any upcoming challenges whenever they arise. The resilience, nimbleness and flexibility that we have developed through weathering past challenges will equip us well to handle oncoming ones.
In the coming year, we will be looking at ways to further raise our corporate profile so as to attract new opportunities within various markets. In line with these efforts, we will be exploring ways to improve the liquidity of our counter, which may result in certain shareholders realising a portion of their investment in order to create the necessary headroom for potential new investors. We believe this is an opportune and appropriate time to embark on this as we ready 8VI for the next growth phase.
Also, as part of our ongoing efforts to enhance shareholder value and raise our profile, we are planning to undertake a secondary listing by way of introduction on the Main Board of the Singapore Exchange Securities Trading Limited ("SGX-ST"), with further details to be made available by end 2021.
Meanwhile, we will continue to sharpen our competitive edge on our Investment Intelligence as a Service ("IIAAS") model – leveraging AI, big data analytics and machine-learning, sharing investing knowledge and empowering better investment decisions, and ultimately generating alpha for our investors.
Our commitment to delivering long-term value to our shareholders and our mission and vision are unwavering – to empower everyone to create sustainable wealth and inspire 100 million lives, whilst driving growth and building a sustainable business.
We intend to remain laser-focused on building a smarter future with our growth initiatives and we are confident that the strong foundation we have put in place enables us to strengthen our FinEduTech platform further for the next decade.
We would like to express our appreciation for the support of our shareholders and the hard work of our 8VI team who have made our journey meaningful and fulfilling so far, and we look forward to our onward path together.
Executive Director & CEO
8VI Holdings Limited