In 2015, Infinium Robotics stepped into the spotlight after showing off what its indoor drones could do at a popular restaurant in Singapore. Two years later, it made headlines again for the wrong reasons.
Infinium CEO Junyang Woon was prosecuted by the city-state’s Ministry of Manpower (MOM) in April for four counts of failing to pay salaries to employees upon the termination of their contracts. In an exclusive interview with Tech in Asia, Woon revealed that the Labor Court has slapped his company with a US$5,120 fine, marking the conclusion of the case. All obligations had been paid and he will avoid jail time, he stated. We’ve reached out to MOM for an official statement.
“I made some mistakes as an entrepreneur and I have learned a lot from them,” he told us.
Not all is lost. Woon expressed relief that the decision has finally brought closure to the matter. “I am happy that my team and I can now move on to deliver our robotics products to the market and realize our dreams.”
Constant payment delays
The company made autonomous drones that operate within walls. It first piloted the drones at live music bar and restaurant Timbre, making them do the legwork that serving staff did, whisking food from the kitchen to the dining area. At the time, the company had signed a US$750,000 seed round from Singapore government scheme SPRING TECS.
Despite all the good press, three former employees we spoke with said their salaries had been delayed for months until the company stopped paying them altogether in June 2016. Those people, who asked to remain anonymous so as not to jeopardize future job prospects, gave us a first-hand account of their ordeal. They were among a team of 10 working on drone insurance software that Infinium had planned to spin off.
“Every week he would say our salaries would come this day. You’d wait for that day but it didn’t come,” one said. Days turned to weeks, then months. “[The delays] got longer and longer, and at some point he just stopped paying.”
Woon supposedly gave them excuses. “He was blaming the banks, blaming this and that… Everyday it was a new thing,” the person added.
“He used to say there was a transaction issue with the bank, or he would blame the payroll company… or that he was waiting for funding from an investor,” another said.
As a result, a lot of their personal plans had to be shelved, they lamented.
By September 2016 – when it was clear they weren’t going to be paid – the team quit, one other ex-staffer told Tech in Asia. “We had not received a termination of our employment agreement. We just received an email that we wouldn’t be getting salaries. That for me was enough of a termination letter.”
The issue ran deeper than unpaid obligations, however. Those who spoke to us complained about Woon’s leadership, characterizing him as dishonest and secretive.
“The person we’re talking about is someone who went to Stanford University, who claims to be in a good family, who was in the Singapore Navy for seven years. This is someone who can’t claim he was unaware of his obligations,” one of them pointed out.
The former employees said Woon failed to communicate the company’s financial health. Furthermore, they said the boss was handling the financials on his own; there was no finance or accounting guy who would’ve helped keep things in check or provided transparency.
Woon admitted being unable to pay his former employees on time. “I promised to pay on a certain day, but wasn’t able to. The company was having a cashflow issue.”
While he did “contravene the law and it was a mistake on the company’s part,” he denied being dishonest or ambiguous about the company’s health.
He argued he was upfront about the cashflow situation, down to the details – that runway would last only until June 2016, for example.
As he was trying to raise funds from an investor interested in the drone insurance software, he requested some time to pay employees off and he said they agreed.
“I provided regular updates… They were aware but still willing to work with the company. If they were really having problems with my integrity, what they could’ve done was leave on the first month they were not paid,” Woon said.
He maintained that the reasons he was giving them for the delays were real.
But talks with the investor collapsed in September 2016, forcing him to finally terminate the employees’ contracts, Woon explained. “We were quite sure that the investor would invest but later on, the investor realized that the market for this software is not yet mature, so they decided not to.”
On Infinium not having a finance or accounting person, Woon said that clearly “we didn’t have enough funds to hire another person. If you can hire someone who can do a software, you’d rather do that.”
Under Singapore’s Employment Act, salaries must be paid no later than seven days after the end of the salary period, and for overtime work, 14 days. In situations where the employee resigned or was dismissed or laid off, his or her final salary must be paid on the last day of work or, if not possible, within three days from termination.
While MOM’s charges appear to have covered only salaries, Singapore’s CPF Board also convicted Infinium for failing to remit affected employees’ CPF premiums. CPF, short for Central Provident Fund, is a mandatory social security savings scheme funded by contributions from employees and their employers. The premiums are automatically deducted by employers from salaries.
“CPF Board takes a serious view on employers who do not fulfil their CPF obligations to their employees,” a board spokesperson told Tech in Asia in an interview back in May. At the time, the government body was “working to recover the CPF arrears owed to six employees” of Infinium.
Complaints about non-payment or delayed payment of salaries are not uncommon in Singapore. We checked the list of convicted employers on MOM’s website as of today, and 146 have been fined since 2015. Only four individuals were sentenced to imprisonment.
Woon recounted how Infinium expanded too fast – employing about 20 people at one point – which drained the funding they received from the government.
He even used up his own assets. “I sold my condo, sold one factory unit. Now I’m staying in a government flat. I put in my own savings and that of family and friends to start this company.”
Whatever revenue Infinium was generating from flying drones at drone shows also didn’t help. The company was offering this as a service while developing drones for indoor use and developing the insurance software. The idea to cater to restaurants also didn’t materialize. As a result, Infinium pivoted to warehouse stock-taking, which its drones can complete in 80 percent less time than humans, Woon claimed.
Looking back, Woon acknowledged he made a lot of mistakes and there are things he could’ve done better.
First, he spent money too fast without having any confirmation of investment coming in. He grew his team from 10 to 20, forcing the company to rent another office. This “doubled the burn rate and halved runway,” he noted.
Second, the CEO dabbled in too many things. He started the software for drone insurance while still in the process of perfecting the hardware. “I was so confident that the software part of the business was going to attract investors and I risked all the funds I had for the company to set up another focus area. That resulted in me diverting my financial resource and also my mind resource.”
He believes startups, by virtue, have a promising product that isn’t proven yet so focus is crucial. “Focusing on one product and doing it well is better than having 10 products and not doing anything well at all.”
If he were to do it again, he said, “I would’ve made sure our main product was successful before I actually worked on another.”
Starting a business is a risky deal and Woon hopes his experience wouldn’t discourage young Singaporeans from jumping into entrepreneurship. “You need ambitious, daring people to start businesses. That’s what the economy needs.”
His advice: “Know what your limits are and plan around those limits to ensure success.”
Right now, Infinium is picking up the pieces and working to carve a niche, zeroing in on robotics solutions for the warehouse and logistics sector.
“Given a choice four years ago before I started the business and knowing I’d end up here right now, I would still make the same decision. Making mistakes is part and parcel of running a business.”
Converted from Singapore dollars. US$1 = S$1.37.