TOKU: Resilience Built Into Core Offering, Geographic Focus
TOKU CEO Thomas Laboulle addresses how he’s thinking about resilience in the face of macroeconomic uncertainty.
So Toku is a cloud communications and customer engagement platform. As such, we mostly provide highly integrated mission critical services. In other words, our churn is expected to remain low even if the economy slows down globally.
And talking about that, let's not forget we operate in the APAC region where many of the most resilient economies in the world are. I'm thinking of Indonesia, Philippines, Vietnam. It is known that these economies are less sensitive and will be less impacted by a recession compared to the USA or European countries for that matter.
Having said that, we still need to acknowledge that the priorities are shifting for many of our customers and we hear it in our daily interactions with them. Cost is back in the picture. Cost is again an important decision making factor. And we also see it in the dynamic of the ongoing RFPs and tenders. The stakeholders have changed. We are again mostly talking to procurement teams instead of the business owners that not so long ago were the ultimate decision makers. Now the procurement teams are back at the forefront in order to make sure that they are getting the best deal out of any negotiation. So we had to adapt to be more relevant, and so we changed our sales pitch to more highlight the cost efficiency of our offering.
Not only that, but we are also talking about the productivity advantages of combining and consolidating all your communication services with the same provider.
Overall, the situation represents an opportunity for a company like Toku.
We are more nimble and we also have a lower overhead than our competitors that are typically publicly listed, so we can be more aggressive with our rates while maintaining a healthy gross margin. That's why we are very confident in our business model and confident that the road ahead, despite the macroeconomic headwinds will actually strengthen our position and represents an opportunity.
Having said that, we are still being more cautious with our cash usage as well, and we are limiting new expenditures for the coming six months just out of common sense to make sure that we have the right visibility on the current situation and we will reassess the approach every quarter.
Betatron Venture Group is an early-stage VC fund investing in resilient businesses across Asia (excluding mainland China). We look for fast-growing, asset-light B2B companies who are positioned to thrive even in the face of increasing risks caused by climate change and changing global financial markets. Learn more at Betatron.co.
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