Appier co-founder Winnie Lee talks about why the fast-growing AI start-up chose to list in Tokyo.

winner lee main pic

At a US trade fair some seven years ago, Tokyo Stock Exchange (TSE) representatives strolled up to a Taiwanese technology start-up called Appier. Their diligence in taking the time to engage with even the earliest-stage businesses paid off — in March this year, Appier became the first Taiwanese firm to list on TSE in more than two decades.  

“We were super small and not focused on where to list, but whether we could build the company,” recalls Winnie Lee, Appier’s co-founder and chief operating officer. “They made a good impression, and when we were researching a listing venue, that came to mind.”

TSE has been trying to attract more foreign companies — particularly Asian tech start-ups — and Appier, which designs artificial intelligence (AI)-powered marketing software for retailers, is a major success story.

An enduring company

Long hailed as one of Taiwan’s hottest AI start-ups, Appier was an early proponent of the technology. “Nowadays, AI is a hot topic and promising industry. But back when we started, that wasn’t the case,” says Ms Lee. “We could already see the power and potential of AI’s application to different industries.”

This belief in Appier’s value proposition has seen the company grow from a five-person start-up in 2012 to an international team of 500 spread across 17 offices, stretching from Australia to the US. Its customers include Google’s owner Alphabet, Estée Lauder and Audi. It has grown by acquisition, snapping up other promising tech ventures over the years, and by raising more than $160m in funding from global investors such as Sequoia Capital and SoftBank. 

“We all believed in building Appier into an enduring company. Going public is one of the key milestones you must go through as part of that journey,” says Ms Lee.

The decision to list was made three years ago, in light of a track record showing the company could continue to win markets and innovate new products. “That is the key factor that gave us the confidence to go public,” she says. 

Even now, nine years after it was founded, Appier is yet to break even. But Ms Lee notes that this is not unusual for software companies, as they are generally in “investing mode” during their first few years. “We aren’t at the stage where we are focusing on optimising our bottom line, because there are a lot of things we still want to build and many potential markets and customers to win,” she says. “But if you closely look at our financials, if we stopped investing [then] we could turn a profit.” Management also closely tracks all spending to make sure it is generating productive returns.

Tokyo trumps Nasdaq

The decision to go public was followed by six months of extensive research to choose an exchange. “As a pure software company, there are a lot of venues you can consider, from Nasdaq in the US to many big exchanges in Asia, and we considered all of them,” says Ms Lee. The winner was Tokyo’s “Mothers” board for start-ups.

We could already see the power and potential of AI’s application to different industries

Winnie Lee, Appier

TSE’s abundance of comparable software firms led Appier’s leadership to believe the exchange was able to evaluate its business better than other venues in Asia. “It’s important to consider how many investors and analysts there understand and appreciate your business,” says Ms Lee, adding that another consideration was Japanese investors’ high acceptance of AI. “Outside the US, Japan is probably the best choice in Asia-Pacific for a software business.”

While Nasdaq is often the top choice for software firms, Appier had no US presence at the time. Meanwhile Japan was one of its biggest markets, with a client base including the likes of Toyota and Shiseido. “We wanted our initial public offering (IPO) to be not only a fundraising event, but also an event that can help drive our business,” she says.

Solutions versus marketing

The long lead time for a Japanese listing meant Appier started working on the deal by appointing SMBC Nikko Securities, Mizuho Securities and Bank of America two years ago. In late February 2021, it conducted some 100 meetings during a two-week virtual roadshow with global investors.  

Shares were marketed at Y1400–1600 ($12.69–14.50) and, on the morning of the IPO on March 30, Appier listed 19.5% of its shares at the top of the range. It raised Y31.4bn ($283m) in a deal that valued the company at $1.5bn.

While some investors were curious why Appier decided against Nasdaq, Ms Lee says the feedback was overwhelmingly positive. “Some investors were happy to see a software company that provides real AI solutions. AI has been a hot topic for a few years now, but rarely is it being used to provide a solution rather than as a marketing term,” she says.

With the IPO funds going towards research and development, along with future growth, there is good reason to expect bigger things from Appier. “We envision that in the future, all software will be AI empowered,” says Ms Lee. “Today’s adoption of AI is just part of the evolution of software becoming more intelligent.”


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