Crowdfunding platform awaits MAS green light

Singapore

JUST two weeks after the Monetary Authority of Singapore (MAS) proposed regulations for securities-based crowdfunding, a new equity and lending-based crowdfunding platform has emerged. FundedHere - set up by Tembusu Partners co-founder Andy Lim - will launch once it receives MAS's green light, likely to be in 12 weeks' time, BT has learnt.

"Crowdfunding is the preferred fundraising platform for startups," said Mr Lim at a press briefing on Tuesday. "Such companies are unlikely to receive traditional bank loans because they don't have financial assets or a business track record."

Crowdfunding is disruptive, added the serial entrepreneur, due to its social network effect that lets companies reach out to investors and partners beyond their own networks. With FundedHere, investors will be able to provide angel or seed funding to Singapore and South-east Asia startups in exchange for shares or a semi-annual interest payment. In return, startups will receive funding when their target amount is reached. FundedHere then takes a fee of about 5 per cent from the startup for total funds or loans raised.

According to Mr Lim, FundedHere facilitates equity investments or loan quantums from as low as S$5,000 for a period of no more than 12 months. Investors have 30 days to participate, and even enjoy a five-day "cooling off" period after the startup's target amount is reached, when they can pull out or disinvest if they wish to. As a platform, FundedHere will not hold any money. Rather, investors will lend via bank transfer or through online credit and debit card payment gateway SmoovPay.

Startups applying to list on the platform will be vetted and curated, though not by sector. Said Mr Lim: "It's an all-inclusive platform, but healthcare, education, green and tech speak to me more."

Meanwhile, FundedHere has amassed a pool of investors and mentors - such as GreenPac's Susan Chong and NUS Enterprise's Wong Poh Kam - to invest and nurture these startups, in a bid to create an ecosystem that may add value and differentiate it from existing platforms, said Mr Lim.

Notable homegrown platforms include Crowdonomic, MoolahSense, Crowdtivate, and most recently, that announced by the Singapore Exchange and Clearbridge Accelerator. "Having more crowdfunding platforms will, hopefully, create some buzz and the critical mass that's necessary for this form of investment ecosystem to gain significant traction," said Stefanie Yuen Thio, joint managing director at TSMP Law Corporation.

What is key, noted Leo Shimada, founder of two-year- old Crowdonomic, is for platforms to prove that they can "go live" and offer fully compliant solutions on a sustained basis. Crowdonomic had earlier announced that it would be expanding its crowdfunding platform to offer a full suite of securities-based solutions later this year.

Mr Lim also revealed that he is proposing to MAS to build and allow a new group of investors - knowledgeable, tech-savvy, high-income 25-40 somethings - to participate in securities crowdfunding alongside accredited investors. Said Ms Yuen Thio: "I think there's room to allow for more categories of sophisticated investors, especially if you limit the ticket size of each investment."

Corporate lawyer Robson Lee said: "Being a relatively new area of investment for investors here, it remains to be seen if there is a critical mass of investment schemes and investors to make such crowdfunding take root in Singapore."