SGX to invest S$1.5m to help develop CapBridge platform

Singapore

SINGAPORE Exchange (SGX) will provide up to S$1.5 million to support the development of CapBridge, the equity crowdfunding (ECF) platform it will jointly set up with Clearbridge Accelerator (CBA) that was announced in January.

In a statement on Wednesday, CapBridge added it has brought on board two new partners to strengthen both the platform and operational team: HealthiosXchange (a US-based ECF platform for the healthcare sector) as a strategic partner; and DBS Bank as a strategic and marketing partner.

"HealthiosXchange brings the capital raising platform technology and operating expertise. Although their experience is rooted in healthcare, this can be applicable across different sectors," Steven Fang, chief executive officer of CapBridge and partner at CBA, told BT.

"CapBridge is sector agnostic. While based in Singapore, it's open to companies around the world that want to raise capital," added Dr Fang.

Come July, CapBridge will launch a pilot run for 10 companies with a combined indicative deal value of about S$138 million. To support CapBridge's development, CBA and its partners - including HealthiosXchange and Dr Fang - will also be "investing significantly" in CapBridge, the sum of which could not be disclosed, BT has learnt.

DBS, as partner, will organise joint forums with CapBridge under the DBS BusinessClass programme to educate small and medium-sized enterprises (SMEs) and accredited investors on ECF.

The latter complements DBS' VentureDebt, a form of debt financing introduced by the bank in February that is specially structured for startups that have earlier raised at least S$1 million from its partner venture capital firms (VCs), said Benny Chan, executive director of DBS SME Banking.

"For companies using CapBridge, and who are already backed by our partner VCs, we will actively come in to see how we can support with venture debt financing. If a partner VC is leading a crowdfunding campaign on the platform or invests via the platform, we can offer the same service post campaign," said Mr Chan.

Philip Lim, CEO of A*STAR's commercialisation arm ETPL, said: "The launch of CapBridge is timely as it will help investors be involved in companies with exciting technologies and great potential. We look forward to having A*STAR spin-off companies on board the CapBridge platform. We are confident that A*STAR's R&D portfolio will continue to build a strong pipeline of Singapore companies that will be attractive to investors."

CapBridge, believed to be the first ECF platform led by a stock exchange, was conceived as a new channel for SMEs in Asia to raise Series A and B money, and for traditional investors to explore new investment options. Other platforms that have announced plans to facilitate ECF here include FundedHere, FundedByMe and Crowdnomic, which earlier this month was named a registered ECF platform in Malaysia.

Asked about the competition, Dr Fang said most of these platforms will focus on early-stage funding, while CapBridge will target all SMEs. "But this is not seed funding. We are expecting each company to raise on average S$5 million via CapBridge."

CapBridge will also partner the other platforms to complement fundraising capabilities, and offer SMEs continuous fundraising options, added Dr Fang. "For instance, if there are companies that are too early-stage for CapBridge, we could refer them to other platforms and vice versa."

The Monetary Authority of Singapore, which had in February issued a consultation paper on proposals for securities-based crowdfunding, is now reviewing the feedback received and will publish a response paper in the later half of 2015. This comes after Singapore in March 2014 announced plans to become a "premier ECF hub" in Asia.

On Wednesday, shares of SGX rose S$0.06 to close trading at S$7.84.