Tan, who founded the company in 1996 with two partners, faced a difficult battle to convince investors to back a Malaysian technology company; he was forced to fund growth outside of traditional financing routes.
Initially, he approached a local conglomerate for corporate venture backing. Although Tan got funding for the manufacturing facility, he still needed funding for research and development.
Round two: Wall Street
In his attempt to secure additional funding for R&D from an investor on Wall Street, Tan was told, “If only you were not a Malaysian company, this thing would have flown.”
According to Tan, part of the issue was that investors were skeptical of a technology company from Malaysia. At that time, the country didn’t possess the reputation of being rich in technology talent, like Japan, Germany or the U.S. “I could have just folded up and collapsed,” Tan says, recalling the rejection.
Instead of folding, he used his existing resources to move ahead. Borrowing funds, Tan engineered the purchase of a company, which he listed on the Malaysian stock exchange. He then possessed enough funding to finance R&D for IRIS.
Another issue that restricted the growth of the company was the slow sales in its nascent days. This meant there was little profit to reinvest in the business. Tan speaks about the reluctance of immigration heads to buy the IRIS electronic passport program technology. “A lot of immigration heads came to visit Malaysia and to visit IRIS. They came, they saw, I didn’t conquer.”
Tan attributes the initial slow sales to the technology being unfamiliar and new at the time. Most immigration stakeholders didn’t want to risk being the ones to test out the technology. But instead of giving up, he adjusted his strategy. Rather than focusing on international travel hubs that had the added complexity of Visa Waivers to consider, such as the US, the UK and Japan, he turned his efforts toward developing countries.