Founded in 2016, in Singapore, Simpple provides solutions for building managers and owners to operate their buildings autonomously through technology. Originally focused on robotic cleaning, the company soon shifted to an integrated software solution that connects IoT devices, robotic solutions, and the workforce, through a single unified platform, enabled by AI.

Achieving revenues of $4.8 million in 2022, the company is now looking to become an international and public company. The firm filed for a $9M IPO on the Nasdaq exchange in April, which was then downsized in May. In this research note, we chart the proposed IPO and examine Simpple’s business activity in the past year.

Simple Ltd conducts business through three subsidiaries - IFSC, Simpple, and Gaussian Robotics (GR) - where IFSC wholly owns Simpple Pte. and fully acquired GR in 2017, and IFSC is then owned by Simpple Ltd, which was incorporated in the Cayman Islands on August 24, 2022. The group won a Royal Institute of Chartered Surveyors SEA Innovation Award for value creation to the facilities management sector in 2020.

“Our initial focus was on the development of a robotic cleaning solution. As cleaning operations usually cover a large area of space, the then-existing robotic solutions and machinery were bulky and not fit for Singapore’s infrastructure,” a company statement reads. “Through the design and development of minimal human intervention cleaning robotics, we were able to build a solution to match the specific facility cleaning needs of Singapore’s skyscraper dominant environment.” They have also developed an Internet of Things platform designed to monitor facilities' performance, called Simpple Plus.

In addition to skyscrapers, the SIMPPLE Ecosystem has been adopted by 209 out of the 432 schools in Singapore, as well as 7 of the 29 hospitals, and 4 of the 6 autonomous universities.

Proposed Simpple IPO

Growing out of their local market, Simpple filed for a $9M US IPO with Nasdaq on April 3rd 2023, offering 2 million shares priced between $4 and $5, which would raise around $9M if priced at the midpoint. The company had been operating in the red. For the six-month period ended June 30, 2022, Simpple reported a net loss of $466K on revenue of $1.9M. However, its auditors expressed “doubt about its ability to continue as a going concern”, according to the April IPO filing.

Then, on May 17th, Simpple announced that it had downsized its proposed US IPO to $7 million, a 22% drop on its previous proposal. Simpple said in its revised SEC filing that it is now looking to offer 1.6 million shares priced between $4 and $5, which would raise around $7 million if priced at the midpoint. If successful, the company hopes to list its shares on Nasdaq under the symbol “SPPL” with the Maxim Group serving as lead bookrunner.

Business Activity

The firm also released its latest annual report, showing revenue of $4.8 million, a 54% increase on their 2021 revenue of $3.1 million. They recorded a net loss of $583,255 and net income of $48,747 for the year, and debt stands at around $1.8 million, down 24% from $2.4 million the previous year.

In the first quarter of 2022, Simpple was awarded a notable industry project to develop an advanced facilities management platform that can automate workflows within a building. This development project was funded by the Singapore Government as well as the four largest private property developers in Singapore, according to a company statement.

Beyond Singapore, the firm has established strong sales channels with distributors in Australia, Hong Kong, Japan and Malaysia. It also intends to set up satellite offices in Australia, Malaysia, and North America to drive market penetration, alongside partnerships with IoT manufacturers, as well as network and FM providers to cross-sell on multiple and new product lines.

While the firm has not made any acquisitions in this period, it has outlined its intentions to “pursue suitable inorganic growth opportunities such as acquisitions, JVs, and alliances to expand our suite of solutions in the facilities management space.” Noting specifically that they would be looking for companies with capabilities in AI and computer vision, those with a large user base in the facilities management sector, and distributors of technology and equipment in the facilities management space. Stating that approximately $1 million would be available for potential acquisitions and strategic investments.

In 2021, the company took a position not to capitalize its R&D efforts as they were still developing multiple proofs-of-concept that did not appear to have immediate large commercialization value. However, in 2022, as their core software product reached commercialization, they capitalized R&D costs, and will now allocate approximately $2 million for research and development of products and technology as well as intellectual property strategy and implementation for the coming year.

“We plan to refine our SIMPPLE.AI’s capabilities through extensive training on the Artificial Intelligence model to detect new and more objects through enhanced video analytics and build scenarios to act upon based on the requirements of building owners and facility managers,” the IPO prospectus said. “On the hardware front with robots, we intend to expand our service capacity through the use of technology as opposed to increasing reliance on human intervention. We also aim to secure intellectual properties in relation to the development of robotics.”

Simpple has made approximately $1.3 million for scaling up sales and marketing into overseas markets and for opening selected satellite offices. They have also outlined their intention to grow into new vertical market segments such as aviation spaces, healthcare centers and hospitals, hotels, industrial centers and residential estates. This broad target market, added to the wide geographical expansion and R&D efforts is likely to put significant strain on a company moving towards their IPO.

“We anticipate that our operating expenses, together with the increased general administrative expenses of a public company upon completion of this offering, will increase in the foreseeable future as we seek to maintain and continue to grow our business, attract potential customers and further enhance our service offering,” the company stated.

“These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. As a result of the foregoing and other factors, we may incur net losses in the future and may be unable to achieve or maintain profitability on a quarterly or annual basis for the foreseeable future,” it continued.

Their future will depend on the effectiveness of their strategy, the patience of their investors, and the success of their IPO. The quality of their technology is vital, of course, but their market penetration in Singapore is impressive and the large-scale building cleaning niche in western markets may still have some room for a new player, but only one with the resources to expand quickly.