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AA09-Apr-May-2005-q_a1The man who brought us e-finance

Belgians are famous for exporting delightful, frivolous products like beer and chocolate. However, leading Belgian entrepreneur Michel Akkermans is responsible for introducing a far more profound product to the world: e-finance. His latest company, Clear2Pay, gives financial institutions the ability to offer branded electronic payment services to clients. With the recent launch of Clear2Pay in Australia, James C. Tuckerman asked Akkermans to map out the e-finance story.

JT: Michel, what brings you to Australia?

MA: This is actually my 21st visit to Australia. In my previous life as Chairman and CEO of a company called FICS, we enjoyed significant success here in Australia. We were working for a lot of the bigger Australian banks, creating the electronic banking infrastructure in Australia. So I’m reasonably familiar with the country and its financial system. I also believe it’s a great place to start from if you wish to expand into South East Asia.

What are the distinct advantages Australia offers for someone looking to roll out a relatively new technology?

One of the things Australians and Belgians have in common is that both countries have advanced patent systems. It means that you are relatively early adaptors of technology. For a company like ours, that is very attractive. Obviously, it is reasonably easy for Europeans to do business in Australia because there is a like-minded sense of how to engage in a project and its commercial development. I mentioned earlier that I have been active in this part of the world for quite some time now. Our latest partnership in Australia was a natural thing to do. Our first successes in South East Asia were mostly due to the efforts of the people here in Australia — obviously forming a very compelling proposition going forward.

It seems like an unusual industry to get into; one where you would need a large amount of experiences across a number of fields to quickly get across the idea. I’m wondering what was happening in 1989 that made you turn around and say, “I think that market is ready for something like this.”

At that point in time I was a young guy relatively new out of university and had been working for major banks for two or three years, mostly American banks. I saw the way PCs were picking up speed and the way people were thinking about cash management and about handling large volumes of data. I started developing a product, which I subsequently sold to a couple of European banks. It mushroomed very quickly and began selling in Asia (Australia) from 1994, and as of 1996 we started distributing our products in North America. So that company grew very quickly. In 1999 — we were a listed company by then and I was Executive Chairman — we merged with a couple of American companies. In 2001 I decided to move from the United States back to Europe. We decided then to create Clear2Pay and start all over again.

Australia has plenty of people who are very successful at inventing things, but very few of them have been successful at turning them into international businesses. What do you think set you apart at the time?

It’s a combination of several things. From an academic perspective, I think I have the right education. I hold a degree in electronic engineering and computer sciences and also the equivalent of an MBA in science. So it gave me the background to understand the requirements. Secondly, I think it’s very important to be able to listen to what your customers want, to take it to the next phase, because you have to design a system or a product that will correspond to their objectives. And last but most importantly, there is only so much you can do yourself, so you have to make sure that you attract the right talent and put the necessary management structure in place as the company grows. I started in 1989. You learn a lot of things along the way and you make a couple of mistakes and you get a couple of bumps and sometimes it hurts, but in general you make progress. We started Clear2Pay in late 2001, in the difficult economic conditions following the September 11 attacks. It was not a very conducive environment to start a company, yet we became successful quite early on in our existence.

Tell me about Clear2Pay. What’s the Australia connection?

Well we merged with an Australian company called Sienna. Warren Gardiner was co-founder and general manager of the organisation and is now a major player in our Australian organisation. So we thought that having a presence in this part of the world was extremely important. In my first life with my previous company, we expanded into Australia in an organic way, hiring people ourselves to set up the organisation. This time, since I’m a lot older and I want to move faster, we decided to team up with an existing entity with a great track record, and great people who shared our mindset, skillset and ideas about where we were going.

Was Sienna an acquisition?

We call it a merger. It was certainly not the kind of impersonal takeover acquisition that you often seen in the US. I had met the Sienna people in my previous dealings and really liked them. So it was a natural thing to do. It was very well appreciated by customers. It was complimentary to our pre-existing products. The Australian software is great and we are now leveraging it in other parts of the world. We just announced a major new product initiative. We work together very well and our Australian colleagues are part of the big picture. Modern communications technology means that it is now possible to develop a project in different locations. For instance, I’ve got people in Belgium, in the Netherlands and Australia working together on one common product development.

What is the involvement of Technology Venture Partners in all of this?

They were an investor of the Australian part of the company, so by definition they became a shareholder of Clear2Pay. TVP are top-notch venture capitalist in this part of the world and we were extremely pleased that they renewed their commitment in the most recent round of funding.

How much did that fund manage to raise?

6.1 million — which is slightly more than AU$10 million. It’s actually the third round of capital raising. The first round occurred in early 2001, to get us started. The second round was in Europe in 2003, where we were able to attract Intel. And in October 2004 we closed off the third round with the involvement of both new and existing investors like TVP.

So where to now. Is a listing on the cards?

My wife always gives me a tie for my birthday. I’m yet to receive a crystal ball, so it’s a little bit hard to predict. I have been the Executive Chairman of a public company, so I understand the benefits and disadvantages of listing. I would like to continue the growth of the company at this point in time before considering other scenarios. But obviously nothing is impossible and we would like to do the right things for the company at the appropriate time.

Would you ever consider listing on the Australian Stock Exchange? Or do you have another preferred stock exchange?

I think that we would go to the stock exchange that is best for the company. If the bulk of operations are in this part of the world, then it would be logical to list in this part of the world. On the other hand, in my previous life we considered doing a duel listing on the NASDAQ and the European Stock Exchange. So these are possibilities as well.

In terms of the current development of our company, it’s still a little bit early as we have a lot of growth still ahead of us. We are very excited about our fast growth rate — one of the things I learnt heading up a public company is that you need to have a critical mass behind you before taking any great leap forward.

It’s a common opinion in Australia that we don’t have the market for large IT companies. Do you think that is a true observation?

Well I come from a tiny country myself — Belgium. Up until very recently in Europe, there were not a lot of places a technology company could go to list. And a lot of companies in Belgium (including my previous one) listed on the NASDAQ. From that perspective I think that the situation in Australia is very similar to some of the situations that we face in Europe. However things may change over time. There’s also the possibility of doing duel listings. We are just in the aftermath of one of the most depressing stock market climates ever and it is unlikely to happen for another two to three years.

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