SINGAPORE: To many of us, staff welfare means a visit to the GP or a hospital stay.

But yoga lessons, nutrition classes and traditional Chinese medicine consultations can be part of the perks package if companies sign up with Rosaline Koo’s ConneXionsAsia.

As a Chinese girl growing up in an all black neighbourhood in Los Angeles, Rosaline Koo had to face constant bullying by the “girls in the ‘hood”.

She painfully learnt to pick her battles and when to stand her ground.

Shaped by this tough childhood, Koo now wants to take on the big players in the health maintenance organisation (HMO) and insurance industries.

She has therefore founded a healthcare and wellness platform called ConneXionsAsia (CXA) and is determined to shake up the way companies manage staff benefits.

Koo says the Asia market in this segment is worth US$20 billion ($27.2 billion), and about US$1 billion in Singapore.

CXA’s premise is simple: Prevention is better than cure, so instead of taking out medical insurance for workers like most companies do, the platform offers a range of wellness service providers, such as meditation and yoga classes, and even cosmetic surgery.

This means employees do not only “benefit” when they fall sick.

The staff who stay healthy are motivated to maintain their lifestyle.

Employees can even look for consultants and therapists to help them cut back on alcohol or diet.

They can also consult traditional Chinese medicine practitioners, who are typically not included in the range of medical services provided by companies.

To be sure, companies spend anything from $1,500 to $10,000 per employee per year on health and medical benefits.

Multinationals tend to be more generous, especially those in the financial services and technology sectors.

On the other hand, benefits meted out by manufacturing and local companies tend to be not as good, says Koo.

Obviously, healthier employees make lower medical claims, which implies that a big part of the already allocated insurance spending goes unclaimed.

Also, with the bulk of married couples being employed, there will inevitably be duplication in entitled coverage and their children.

“Companies aren’t really maximising what they spend on all these insurance.

It goes to waste and only sick people use it,” says Koo.

CXA also removes the chore of managing these benefits from its clients, and enables employees to choose the perks they want.

With the proper mobile apps, they visit their desired service providers, flash the right QR code on their smartphones, and that is it.

No forms to fill and annoying paperwork to do.

Thus far, CXA has assembled some 150 providers, tempted by the chance to do business with the company’s growing list of more than 500 corporate clients, including 20 Fortune 500 firms that had signed up as at March 2014.

The clients have a total headcount of more than 80,000 employees in Singapore.

CXA expects this number to balloon to more than one million by 2019, as more clients come on board.

With such superb growth projection, it is not surprising that Koo currently only needs to assign just one employee to manage this part of CXA’s business — the service providers are the ones who come knocking to gain a toehold in this market.

Just to be sure, CXA is selective.

“We had to turn one away: they offer funeral services.

We told them this is not wellness,” she quips.

Hardy genes
Koo, 53, has what she calls “hardy genes”.

Her father, born in a village near Canton, China, made his way across the Pacific.

He first landed in Mexico before heading north to San Francisco — illegally.

That was in 1919.

“He was one of the original wetbacks,” says Koo, using the derogatory term to describe those who had to suffer this pattern of migration.

For the next four decades, he hid in Chinatown, taking on odd jobs such as fixing sewing machines, until he decided to get married.

But he soon realised “there were no women in Chinatown”, says Koo.

He took advantage of an amnesty programme for illegal immigrants, turned himself in, and gained his legal status.

With that, he made his way back across the Pacific, to Hong Kong, to look for a wife.

Koo’s mother came from a land-owning family, from another village, also near Canton.

When the Communists took power, her family was subjected to the typical persecution — Koo’s maternal grandmother was sent to a labour camp — and her mother had to escape to Hong Kong to find work to support the family.

So, her parents met, and despite a 30-year age gap, went back to the US together.

They chose to settle down in Los Angeles, and four children were born.

Koo is the eldest.

“When my father had me, he was 61.

That was way before Viagra,” she jokes.

It was only after Koo and her three siblings were born, that her mother confessed to her father that she already had two daughters before they met.

She did not say much about her first husband, except that he was also a landlord.

As Koo’s father was already too old to work, her mother took up the burden of providing for the family — including the two older daughters whom she later brought over from China.

She worked as a seamstress and in restaurants; too poor to afford a car, she had to endure two-hour-long commutes on public buses.

One night, Koo overheard her mother telling her father that she was ready to hurt the guy who had been harassing her if he did it again.

“I saw her put a cleaver in her bag,” Koo recalls.

“I come from two really hardy souls — survivors.” One of the more eventful episodes during Koo’s childhood was the Watts Riots, a six-day orgy of violence in the summer of 1965 that led to 34 deaths, and thousands hurt and arrested.

It has been described as a turning point in the US civil rights movement.

The commission tasked with finding the causes of the riots recommended urgent schooling, housing and job-training opportunities.

Improvements in police- community relationships were needed too.

While Koo and her family were not harmed during the riots, there was the constant bullying.

“We were the only non-blacks, so we were discriminated against.

We were the lowest of the lows.

There were all the black kids and all the poor Chinese kids — that’s us,” she recalls.

Those experiences were “an incentive” for Koo and her siblings to get out and leave the neighbourhood.

“My siblings are all zealots, like me.

One sister became a missionary in China, and my brother manufactures guns,” she says.

Studying hard to earn a place in college became her aim.

In 1979, she enrolled in the University of California, Los Angeles on a meritbased scholarship, and graduated in 1984 with a degree in cybernetics.

Koo’s first corporate job was with consumer goods giant Procter & Gamble.

She was a manufacturing manager, overseeing 33 workers producing Crest toothpaste.

Her formal education continued with an MBA programme in 1988 at Columbia University, which she attended, again on scholarship, as an Erwin S Wolfson Fellow.

She then joined Bankers Trust Co, where she went from summer intern to vice-president in less than nine years.

During her time there, she held responsibilities ranging from product management, marketing and operations to process reengineering.

In 1999, she was bitten by the start-up bug amid the dotcom mania that was sweeping the world.

Koo was first COO of 2bsure.com, a unified messaging platform, and subsequently, vice-president at Netcel360, a regional business process outsourcing firm.

In 2002, as the regional vice-president at ACE, she helped build the insurer’s businesses in accident and health.

She then joined HR consultant Mercer in November 2004 and, again, shot up the ranks.

Starting as a principal, she was made worldwide partner, then senior partner.

At one point, she led the Mercer Marsh Benefits business unit across 14 markets in Asia, in charge of more than 400 employees.

Under her watch, the business unit posted 800% growth in revenue over eight years, as she introduced new products and worked her way into new client segments and markets.

Pan-connection
While at Mercer, Koo kept pushing the company HQ to let her change the business model in Asia.

Her efforts came to nothing as it was felt that the region was not worthy of the additional commitment required.

“So, I decided to build an Asian company for Asia.

I’m so anti- American even though I’m American, I actually want to show them that companies in Asia can leapfrog you guys,” she says.

Today, Koo’s new venture has caught the attention of her former bosses.

“We keep taking clients from them, from all the big ones.

So, yes, they are quite aware.

I was told, ‘They talk about you at management meetings’,” Koo says.

There was, however, a major obstacle when Koo tried to start CXA.

In order to build a better business model and have a broader service offering from a strong base, CXA needed to have its own benefits brokerage.

Early last year, Koo managed to persuade Mrs Young King Chew of Pan Group, Singapore’s largest firm in this space, to sell the brokerage to her.

According to Koo, Pan had many suitors in the form of multinational firms.

In the end, she handed over her “baby” to a like-minded entrepreneur such as Koo.

Today, Young remains with CXA, manages Pan as a subsidiary, and shares the same office with Koo.

On top of what she was paid for Pan, Young stands to enjoy additional upside if certain targets are met.

When Koo lined up a group of investors to buy over Pan, the Monetary Authority of Singapore refused to give the go-ahead.

The financial industry regulator, apparently, does not allow multiple foreign investors in that particular business.

“You need to be the single shareholder,” Koo recalls MAS officials telling her.

Undaunted, Koo took out $5 million of her family’s money, got a bank loan, and went ahead with the acquisition.

To pay her bills, such as college tuition fees for her daughter, who is now at Tufts University, and a younger son, her husband Clarence Koo, who was enjoying early retirement from his job as a managing partner with consultancy Oliver Wyman, got back to work.

“My husband is still angry,” she says.

When Koo acquired Pan, she won over a big pool of loyal customers and could also tap into the network of contacts that Young can bring.

The latter’s husband is Young Kuan Sing, who was in charge of the regional operations of top-tier headhunting firm Korn/Ferry International.

Young’s sister, Cynthia Poa, started the local franchise of nutrition seller GNC, with exclusive rights not only in Singapore but also Malaysia, Taiwan and Australia.

She then sold the controlling stake to OSIM International, better known for its massage chairs.

Poa remains the group CEO and executive director of ONI Global, which runs the GNC business as a subsidiary of OSIM.

Of course, Koo has also assembled a strong CXA team.

In her management ranks are several doctorate holders, including one each from Imperial College and Cambridge University; there is also a new recruit with a Harvard MBA.

Her team has work experience with MNCs such as Cisco Systems, Microsoft, Singapore Technologies and, of course, Koo’s old firm, Mercer.

She believes she was able to recruit these talents owing to her track record, and the fact that she has committed all her money to the venture.

“I think having an entrepreneur who’s actually willing to put skin in the game really helped,” says Koo.

She clearly has some lofty growth ambitions.

From revenue of US$6 million now, CXA sees this figure exploding to US$100 million by 2019, as it targets expansion across the region.

Koo has reasons to be confident.

The company has received requests from the big insurance companies to provide private-label platforms that they can sell under their own branding.

She has just signed one such letter of intent with one of the largest life insurers in the region.

To ink such partnership deals, CXA gets a leg-up from DBS.

The bank has existing relationships with many business clients, and it wants to cross-sell insurance products to them along with business loans, says Koo.

The insurance packages, in turn, can be bundled with wellness programmes, which means the opportunity for CXA to grow more business, and be a tiny but critical component of the ecosystem.

“We are the ‘Intel inside’,” says Koo.

Evidently, there are more than a handful of investors who believe in the potential of CXA.

On Feb 10, CXA announced that it had raised US$8 million from three funds and seven individuals.

When asked how she plans to use the new money, Koo jokes in front of Shane Chesson, partner at NSI Ventures, the lead investor: “I’ll go buy a yacht.” Jokes aside, CXA is now applying for a brokerage licence in Hong Kong and part of the money will be used to expand its office there to tap the huge financial services sector in the territory.

While she does not really need external funding, Koo says her new investors also bring additional expertise and contacts to ease expansion into new markets such as Asean, China, India, Japan and South Korea.

NSI Ventures is the venture capital division of Singapore-based private equity firm Northstar Group, which manages US$1.8 billion.

Ashish Shastry, managing partner of Northstar Group, and CEO of Northstar Advisors, will join CXA’s board as part of this transaction.

He has served on the boards of companies such as Indonesia’s BTPN and planter Triputra Agro Persada, as well as Parkway Holdings, which is now part of IHH.

Shastry calls CXA’s business model a “game changer” for the employee benefits business in Asia.

“This paper-based industry is ripe for disruption, and we believe that CXA has a significant edge over the competition,” he says.

Another investor is F&H Fund Management, whose chairman and co-founder John Wu was a former chief technology officer of China’s e-commerce giant Alibaba, before setting up F&H with Matt Hu, another notable asset manager.

The fund focuses on consumer, healthcare and technology investments in Asean and China.

It owns stakes in companies such as doctor-booking portal Guahao.com, shopping websites Jumei.com and Reebonz, and even JR Foodstuff, a Singapore manufacturer of readyto- eat meals, whose boss Jocelyn Chng also runs the famous sauce and condiment maker Sin Hwa Dee.

CXA will be tapping Wu’s connections to help expand into China.

One of the seven individual investors is Andrea Toh, a shareholder of Pan before CXA’s acquisition.

Toh remains in the company as CEO of the business unit running flexible benefits matters, PanFlex.

She notes that since Pan became part of CXA, the combined entity has won over many large brandname clients from bigger competitors.

Exit strategy
It will be naive to assume that Koo plans to run CXA forever.

She has already thought of an exit strategy: A sale, and not an IPO.

She claims that some companies have already made offers, but she is not selling yet.

“I’m trying to wait longer, because I’m sure the price will go up.” Koo explains that she prefers a sale and exit over an IPO as she does not want to be hampered by the quarterly reporting requirements of public companies, where the need to meet a certain set of numbers every 12 weeks results in short-term outlooks.

She could not resist taking a swipe at the big, listed boys.

She says that despite their hefty IT budgets, they have not channelled enough resources into building new technologies that she is doing with her small team, using her own money.

“They are always cutting themselves to greatness.” She describes her team as those who are either from such big corporations, or not used to the slow-moving bureaucracies, constantly asking for permission to do things.

By contrast, those who have committed to working in start-ups such as CXA focus on creating new functions and features, so that their customers can enjoy significant and sustainable improvements.

Nevertheless, with external investors now on board, Koo knows she may not necessarily have the final say and so, she has to hedge her response to that exit question.

“They may want IPO, I don’t know.”

To be sure, there are firms similar to CXA that are already up and running in the US.

The healthcare sector has attracted a lot of attention from technology companies eager to sell their wares.

For example, there’s New Yorkbased Oscar, which provides functions such as tele-video consultations.

Over on the West Coast, there’s San Francisco-based Zenefits, which focuses on small- and medium-sized businesses.

Oscar and Zenefits have one major difference over CXA: they have amassed much bigger financial muscle, with US$150 million and US$84 million raised respectively.

“All of them are fairly young, same vintage as us, probably worth half a billion dollars each already, so one of them may want to buy us,” says Koo.

A big brand name may even emerge as a potential buyer.

Koo notes that Internet giant Google is starting an insurance business that is threatening to disrupt the sector.

CXA is trying to link up with Apple, which is also entering the health segment with its Apple Watch.

“All companies are building health-related arms, everyone’s moving into the digital health space, especially with data.

If we become the platform for employers and insurers, and offer great services, I think we can become part of the ecosystem,” she says.

Regardless of how the future pans out, CXA’s goal is to shake up the market.

“I think we are seeing that already.

It’s really challenging for the incumbents, and that’s the best part.

It probably comes from my background of being a bully — or being bullied.

Now is the time for revenge,” says Koo.

This article appeared in the Enterprise of Issue 666 (Mar 2) of The Edge Singapore.