ESTONIAN-FOUNDED funding and trading platform Funderbeam has secured two licences that would allow Singapore-based early-stage companies to list their businesses for funding, and for accredited investors to invest and trade in the stakes of these companies listed on the platform, it said in a press release on Thursday.
The two financial-service licences, the Capital Market Services licence and the Recognised Market Operator licence, will allow Funderbeam to introduce its automated trading and secondary listing service in Singapore, tapping regional investors and entrepreneurs that are headquartered here. Both licences are issued by the Monetary Authority of Singapore.
The platform is meant to provide liquidity and access to the startup and SME investment space across Europe and Asia. According to Euromoney, Funderbeam provides secondary market liquidity through an auction-style marketplace.
Launched in Europe in 2016, Funderbeam is a global cross-border funding and trading platform for private high-growth companies. Despite its limited format of trading so far in the secondary market, Kaidi Ruusalepp, the founder and CEO of Funderbeam, told The Business Times that more than three million euros (S$5.3 million) worth of investment shares have been exchanged. The company is hoping to double that by the first half of 2020.
The types of companies that raise funds on Funderbeam range widely, and include a cheese snack maker from Iceland and a drinks maker selling a low-calorie caffeinated beverage known as "energy water". Other companies funded on the platform include a fintech firm providing pre-departure bank accounts to international students, and an electric-bike manufacturer.
Ms Ruusalepp said: "With a good concentration of companies here from markets such as Indonesia, Malaysia and Japan, Funderbeam hopes that Singapore can be their meeting point to connect to a larger network of global investors and entrepreneurs across Europe and Asia."
Ms Ruusalepp, the former Nasdaq Tallinn Stock Exchange chief executive, noted that investing in early-stage and growth companies can be risky. But she said Funderbeam tries to manage the investor's risks by ensuring that companies on its platform are transparent about their processes and constantly engage in discussions with their investors. She said there is a "rigorous vetting process" such that only one to two out of 100 applications are approved weekly.
The companies are expected to have gone through initial product-market fit and testing phases, as well as have a clear business plan, good traction in their market and key performance indicators they want to hit, Ms Ruusalepp added.