The Founding Story of MOL, One of Southeast Asia’s Largest Payment Companies
MOL is one of the biggest payment companies in Southeast Asia, with over 680,000 physical and online payment channels, 60 million annual transactions, and yearly revenue over $300 million. Some of MOL’s main payment products include:
MOLPoints is an online wallet for purchasing virtual goods, specifically for game credits and online content.
MOLPay is an online wallet for purchasing non-virtual goods like products and services from online enterprises.
MOLCards is a prepaid card sold at MOL distribution channels. It is used to top up MOLPoints.
MOL also owns Friendster after its acquisition in 2009. I recently met up with MOL founder Ganesh Kumar Bangah as he told the story of MOL’s founding.
Ganesh started work at age 17 in 1997 when he was still an undergraduate. He worked as a promoter in a Johor-based company, Cyberfield. Cyberfield does development, runs cyber cafes, and also produces a cyber cafe management software that it sells to other such cafes. After working there for some time, Ganesh dropped out of university to focus on the company because of the potential he saw. It was a decision that he doesn’t regret but doesn’t encourage either.
In the interview, he quipped cheekily:
I saw an article that the Singapore government wants to turn Singapore into a Silicon Valley. They should encourage students to drop out.
Starting up
During the dot com bubble period in 1999, Ganesh and his two co-founders had the idea of spinning the cybercafe management software off as a separate business entity and offering the software for free to cafes around the world. They approached Tan Sri Vincent, a Malaysian self-made billionaire and founder of the Berjaya Group to pitch this idea, which raised two million ringgit ($640,000). It was a small investment compared to Tan Sri's other investments, but Ganesh feels this was a blessing in disguise.
At that time, Tan Sri invested 200 million ringgit ($64 million) in 30 other startups. Some of those startups raised ten to fifteen million ringgit. I only raised two million. It was one of the smallest amounts raised. If I had raised ten million, I would have shut down the company in one and a half years. Because I raised two million, I managed to wait it out. When you raise fifteen million, you tend to build your burn rate to one to two million per month. And when you have one to two million ringgit burning every month, you cannot generate revenue after one year, you need to cut the team. When you cut the team, it's a downward spiral.
With the investment, MOL AccessPortal was launched in February 2000. Within three months of giving the software away for free, it was installed in more than 15,000 cyber cafes across the world.
Solving problems
But MOL had problems monetizing its users as there wasn't Google AdWords to easily monetize the traffic. As such, Ganesh and team developed their own payment system and turned the wide cyber cafe network into a payment system where people could pay cash at the cyber cafes for online transactions. This master stroke instantly made MOL into a potential giant monetizing machine with a wide distribution channel in Malaysia and across the world.
With the payment channel sorted out, the team faced a chicken-and-egg problem of having few transactions happening. There weren't many virtual goods to be purchased online back then as there were few merchants online. The team went out to solve this by working with game publishers. In 2002, MOL was the exclusive payment gateway provider with Helbreath, an extremely popular Korean game. The partnership propelled MOL's reputation, which saw many game publishers using MOLPoints. By December 2003, MOL got listed on the Malaysia Stock Exchange.
Starting the company was the most challenging time because the internet hadn’t picked up yet. So you needed to learn how to wait it out and bootstrap, especially at the beginning. The first three years are the toughest times. After we get traction, it’s just growth. The first day I started collecting game payments, my revenue was like 3,000 ringgit from one game. Today we collect more than a million ringgit a day from online game payment alone. And we work with more than 250 to 300 game publishers all over the world.
From good to great
Many entrepreneurs dream of getting listed but Ganesh had his sights on bigger things. In 2008, he again roped in help from Tan Sri Vincent to de-list and privatize MOL. This was another monumental moment for the company. By now, both of his co-founders had exited, and Ganesh was the sole remaining founder in the company. He went on to expand MOL to India, SIngapore, and Thailand and passed the milestone of $100 million yearly revenue. In 2009, MOL acquired the giant social network Friendster, presenting the world with a rarely-seen phenomenon: a Southeast Asian firm acquiring a giant US internet company.
Despite the success he has achieved so far, Ganesh doesn't seem to be slowing down. He hinted at several acquisitions in the company road map and market expansion to other countries is part of the plan. At a personal level, Ganesh also does angel investing and mentoring of local entrepreneurs. Certainly more entrepreneurs in Southeast Asia could learn from Ganesh’s example: got funding and being listed don’t have to be the end of the story. Sometimes, it’s just the beginning.
MOL's ten-year anniversary
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