Frenchman Laurent Junique took a risk coming to Singapore in 1995 with nothing more than a dream and a single suitcase. Through ups and downs, Junique has weathered many scenarios, from setting up his own company as a one-man show, to expanding it during a global financial crisis and now the Covid-19 pandemic.
Junique is founder and CEO of TDCX, a company that provides outsourced services to clients in areas including omnichannel digital customer experience (CX) solutions, sales and digital marketing services, as well as content monitoring and moderation.
From a one-man company operating at home and having meetings in cafes, Junique has built TDCX into a global business spanning over 10 markets with a workforce of more than 13,000.
The Edge Singapore first spoke to Junique in 2018, when the company was known as Teledirect. Back then, Junique was in full expansion mode, planting the company’s flag around the world as he took advantage of the momentum and opportunities available.
Today, Junique has made good on his expansion goals, successfully entering new markets such as China, Japan, South America, India and South Korea, while expanding the company’s presence in its existing markets such as Singapore, Malaysia and Philippines.
His efforts has been recognised with several accolades, including EY Entrepreneur Of The Year — Outsourced Solutions. And from Junique’s perspective, the biggest accolade he has received thus far is listing the company on the New York Stock Exchange (NYSE) in October. “Since we last met in 2018, a lot has happened,” says Junique.
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“We have grown tremendously, by leaps and bounds, very much on the back of the fact that 92% of our business now are from new-economy companies and we are surfing the wave of that new economy.”
Transformation for growth
In a sense, Junique has a tried and tested formula: he has been driving the company’s growth with constant reinvention — and with each change, he has been able to capture accelerated growth. “We started in 1995 and since then we have reinvented ourselves a number of times,” says Junique.
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The latest revamp resulted in the group changing its name from Teledirect to TDCX. When the company was started, it was mainly in sales. Around a decade later in 2007, Junique led the change for the company to go into customer care service. In 2012, the company pivoted to become a digital support services organisation. “And that’s when more and more of our clients were new-economy businesses and we started providing omnichannel services too,” says Junique.
With the company increasing its offerings and moving into the new-economy world, Junique thought it was also time for the company to reinvent itself once again with a new image, and a new name.
Shortly after its rebranding, Junique felt it was high time the company took its next big step — going public. “We needed to accelerate our strategy and take it to the next level. And being listed gave us a great number of advantages,” says Junique.
For example, the company can easily tap the capital markets. The listing gives TDCX a higher profile and more recognition. And of course, giving his employees share options will go a long way in retaining the right talent to help drive the growth.
On Oct 1, TDCX made its debut on NYSE. It priced its IPO of American Depositary Shares (ADS) at US$18 ($24.60) per ADS in an offer of 19.4 million ADS. Each ADS represents one Class A ordinary share.
Gross proceeds from the IPO stood at US$348.5 million. The proceeds will be put to work driving further expansion. “We need to allocate some funds for organic growth and to scale up in some of our existing markets. We will also be investing in people — hiring talent and training our staff, as well as investing in technology. We will also look into making some smart acquisitions, although a lot of our growth will still be done organically,” he says.
The listing gives TDCX the currency in the form of its shares to fund potential acquisitions. According to Junique, he has a pipeline of potential M&A targets, but for now, he is more inclined to focus on organic growth.
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There are two main ways the company can generate organic growth in a new market. Firstly, TDCX can enter a market together with a client, which is the preferred option. “We start with an anchor client in a new market and grow from there. We usually take around two to three years to be profitable,” Junique explains.
The other scenario is when TDCX enters a new market without an anchor client, because it senses a demand within the industry. This could be more unpredictable as it depends on the acceptability of the market the company is trying to tackle. Hence, it could take anytime from two to even five years to be profitable in a new market without an anchor client. “I don’t have a hard and fast rule; sometimes we break even much faster. But on average, we are able to break even within three years,” says Junique.
Driving forward
TDCX, by listing on the NYSE, joins a growing list of homegrown companies that chose not to list on the local bourse, which some observers believe needs more of such tech-focused companies to help drive further trading volume and raise the attractiveness of the Singapore stock market as a whole.
When asked why NYSE, Junique explains: “Of course, we did explore a number of stock exchanges. And when we weighed the pros and cons, we found that NYSE was a global marketplace. There were more peers in our sector in NYSE, as compared to Singapore Exchange [SGX]. And that was important to investors, in terms of comparable companies.”
“Our listing on NYSE is really attracting a lot of global investors and we managed to push out our message to them saying that TDCX is going to become a global company. So, it made sense for us to list on a global stock exchange,” he says, adding that the group did not raise any funds through venture capital firms or other external parties prior to this IPO, as the group solely relied on its own cash flow for expansion.
Although Junique did meet up with a few private equity firms, the group did not end up going ahead with any in the end as it boiled down to what sort of value TDCX was going to get from it. From the IPO price of US$18, TDCX shares traded as high as US28.68 on Oct 29, before trending down to US$19 as at Dec 7, valuing the company at US$2.77 billion. The stock is trading at a historical PE of 40.38 times and a forward PE of 33.75 times.
In its latest 3QFY2021 ended September results, TDCX recorded earnings of $30.2 million, 46.7% higher than $20.6 million in the previous year. This was on the back of a 41.3% y-o-y increase in revenue to $148.8 million from $105.3 million, driven by higher revenue contribution across all the group’s revenue segments. (The company reports in both USD and SGD.) Revenue from omnichannel CX solutions increased by 37.9% y-o-y to $92.8 million, attributed primarily to higher business volumes driven by the expansion of existing campaigns.
In addition, business volumes benefited from the nascent recovery in the travel and hospitality sector from the impact of the Covid-19, while TDCX also saw higher demand for its services from FinTech and gaming clients and other new-economy clients.
Revenue from the sales and digital marketing segment grew by 93.4% y-o-y to $32.4 million, thanks to the volume expansion of existing campaigns for its digital media clients across our delivery sites in Asia.
Revenue from content monitoring and moderation services increased by 7.1% to $21.2 million, attributable primarily to higher contribution from a social media client.
“We kick off our first earnings as a public company on a strong footing. We were able to achieve record revenue this quarter despite the continued challenges of the pandemic. This is the result of our disciplined decision-making and long-term approach to driving quality growth,” says Junique, adding that he looks forward to winning over more new clients.
Currently, two of TDCX’s largest clients are Meta (the renamed Facebook), and Airbnb, which accounts for 60% of the company’s total revenue.
To mitigate risks of anything happening to these two large clients, Junique is working actively to broaden his customer base. He says: “We have many different business lines with these clients across different geographies. So, we don’t just see them as two clients. We see them as a number of different businesses under the banner of these clients, because they are the independent units of these clients that need our services.” TDCX provides all three omnichannel CX solutions, digital marketing, as well as content monitoring and moderation to these two big clients.
Moving forward, Junique is in expansion mode and will use funds from the IPO to fuel that. But he is, of course, mindful of the rate of expansion, to avoid expanding too much, too fast, and harming profits.
He says: “The secret to our success, in large part, has been our focus. TDCX specialises in quality growth. If you look at our past, we were not very big. But we are good. So, the kind of growth we onboard is good growth. Our margins are very stable, and they’re sustained. Because we’re both discerning in the clients we onboard, we have very specific pricing policies, we also have very guided metrics of operational management.”
“And so we don’t want to deviate from our DNA. We are not saying that we want to go crazy after we listed and grow at the expense of profitability. We intend to maintain our margins and we intend to grow with quality,” adds Junique.
