This article first appeared in The Edge Malaysia Weekly on May 1, 2023 - May 7, 2023

ACE Market-listed digital solutions and applications development specialist Agmo Holdings Bhd has come a long way since it emerged a winner of a reality-TV show 11 years ago.

In 2011, Agmo co-founders Tan Aik Keong, Tham Chin Seng and Steven Low Kang Wen had participated in e-government services provider MyEG Services Bhd’s (MyEG) Make the Pitch competition — a reality-TV show aired on NTV7 about Malaysian entrepreneurs pitching their innovative ideas to a group of potential investors to obtain financing.

The trio had emerged a winner of the start-up programme in January 2012, securing an investment of RM300,000 from MyEG, which valued Agmo at more than RM1 million.

“We pitched an idea called Masatu, which was a first-of-its-kind and location-based social networking and photo-sharing application. The app was based on augmented reality with a time capsule concept. It was quite a unique and high-technology app back in 2011,” Tan tells The Edge in an interview.

At the time, mobile apps were just starting to gain in popularity, and the judges of Make the Pitch, including MyEG co-founder Wong Thean Soon, saw the potential of Masatu — or, to be more precise, the potential of what the three young entrepreneurs could achieve.

“Initially, it wasn’t really our intention to make Agmo an app developer. We wanted to be the Facebook of Southeast Asia, but it was tough to build traction. So, we pivoted,” says Tan, who is CEO of the company. 

In 2012, Agmo was officially incorporated, with Masatu being its maiden consumer mobile app. A year later, it secured mobile app development projects from several notable companies, as well as its first web app project.

Tan, Tham and Low have not looked back since. Today, Agmo is a Bursa Malaysia-listed technology firm with a market capitalisation of RM208 million, having developed more than 100 apps.

Tham is its chief technology officer and Low its chief operating officer. Collectively, the trio owns 40.9% equity interest in the company. 

MyEG, which was a pre-initial public offering (IPO) investor of Agmo, recognised an investment gain of RM61.9 million, following the listing of Agmo. Last December, MyEG announced its plan to distribute all of its 84 million shares, or a 25.8% stake, in the company by way of dividend-in-specie to its shareholders.

The dividend-in-specie is in the process of being distributed in two tranches. The first tranche, involving 69.7 million shares, was completed in March. The second, involving the remaining 14.2 million shares, is expected to be completed in August.

As a result of the dividend-in-specie, MyEG’s Wong has become a direct shareholder of Agmo, with a 10.8% stake. Considering that the second tranche of dividend-in-specie has yet to be completed, MyEG remains a shareholder of Agmo, with a 4.4% stake at the time writing.

Since its listing on Aug 18 last year, Agmo has seen its share price gain 138% to settle at 62 sen last Wednesday, up from its IPO price of 26 sen. The counter hit a record high of RM1.01 on Sept 12 last year, before paring its gains to the current level.

Tan says it has been an exciting journey for Agmo since its IPO last August. “The listing exercise has raised our corporate profile. Before the IPO, we employed about 130 people. Today, we have expanded our team by 30% to more than 170 employees. We are aiming for a workforce of 220 to 230 by the end of this year. We are now halfway there in meeting the recruitment targets.”

Headquartered at MYEG Tower, Empire City Damansara, Agmo also operates its subsidiaries’ offices in Puchong and the Mid Valley area.

While it is difficult to hire good talent, Tan believes this is a good sign, as it shows that the market is in high demand. More than 98% of the group’s talent comprises Malaysians, who include front-end and back-end developers, research and development engineers and designers.

He says: “Agmo is an asset-light software company. Our operating expenses are mainly for human talents and computers. We don’t have a data centre to store data; everything is on the cloud. Our prominent customers include Petronas, Pos Malaysia, CTOS and Shangri-La Asia,” he says.

Notably, the company has launched Agmo EV Dashboard, a tool that helps charge point operators plan the installation of their next charging station, by employing a data-backed scientific approach, as well as leveraging AI and big data analysis.

Meanwhile, to cater for the electric vehicle (EV) consumer market, it has developed the Agmo EV SuperApp, which allows EV users to locate the nearest charging stations in Malaysia and could help them with route planning while reducing “range anxiety”.

Tan believes Agmo EV Dashboard can help the charge point operators maximise their return on investment, and he hopes the Agmo EV SuperApp will become the go-to mobile app for Malaysian EV owners.

“Being an EV user myself, I must download 12 to 13 apps just to survive with an EV in Malaysia. I need an app to find a charging station and another app to plan my route, and different apps are required for different charge point operators. It’s so fragmented; that’s why we see a gap that provides with us a great opportunity to build a super-app,” he says.

A super-app is a mobile or web application that can provide multiple services, including payment and financial transaction processing, effectively making it an all-in-one online platform that embraces many aspects of personal and commercial life. Notable examples of super-apps include Alipay, Tencent Holdings Ltd’s WeChat in China, and Grab in Southeast Asia.

By partnering with Alibaba Cloud, Agmo plans to fully launch the Agmo EV SuperApp by the middle of this year, says Tan.

“This will be a one-stop solution for all EV users. We believe this business model is highly scalable. So, how do we make money from this app? Our next phase is to support payment infrastructure. Just like a payment gateway, we will be charging a merchant discount rate (MDR).

“In simpler terms, you could say that Agmo plans to become an ‘e-wallet player’ in the EV space. By utilising data analytics tools, our app could help drive traffic to our charge point operators’ EV charging stations. The more people use their EV charger, the more revenue we could derive from the MDR,” he explains.

Agmo generated net profit of RM6.47 million on revenue of RM19.98 million in the nine months ended Dec 31, 2022 (9MFY2023). The group has three core businesses: development of bespoke digital solutions; provision of digital platform-based services; and provision of subscription, hosting, technical support and maintenance services.

“We develop bespoke digital solutions for our clients under our main business division, whereas we develop our own Agmo solutions under our digital platform division. As for the hosting and technical support division, we are the reseller partners for cloud service providers and hyperscalers, while ensuring our customers’ solutions are always up and running,” says Tan.

Agmo’s bread-and butter is bespoke digital solutions, which contributes about 80% of the group’s revenue, whereas two other business segments contribute 10% each on average.

“We hope our digital platform division, along with our hosting and technical support division, can collectively contribute 30% to 40% to our group’s revenue in the next three to five years,” he says.

Tan says Agmo hopes to achieve a top-line growth of 40% to 50% in the financial year ended March 31, 2023 (FY2023) and FY2024, while it is looking to maintain its net margin around 30% for FY2024. “The growth rate is an internal target. Although it’s not a formal forecast, we believe we can comfortably achieve it, given our current order book and recurring revenue.”

Tan adds that Agmo aims to migrate to the Main Market of Bursa Malaysia but has not set a timeframe for it. 

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