Crowdfunding platform raises S$660,000 for Mezzo Interiors

Singapore

HOMEGROWN debt-based crowdfunding platform New Union on Monday said it has raised S$660,000 for interior design firm Mezzo Interiors, an amount said to be one of the largest raised by a small and medium enterprise (SME) on a crowdlending platform here.

Said Mezzo founder Lee Yue Cheng: "Receiving this injection of funds from New Union comes at an opportune time. We are in the midst of expanding our team in order to cope with the upcoming series of alteration and addition and rebuild works we have secured, together with a few overseas projects in Cambodia. We are grateful for this alternative source of funding, as previously seeking a loan from a bank was difficult, due to the fact that we are a young business that did not meet their minimum criteria."

Mr Lee added that through New Union, Mezzo expects to increase its annual turnover by three times.

New Union co-founder Eddie Lee told BT: "This shows the success of our model, as it has worked well for Mezzo such that they have come back to us. (The S$660,000 financing was done through three tranches). Through crowdfunding, we hope to help aspiring SMEs elevate their business standing and have their needs addressed by the local banks in future.

"Mezzo is also a good example of an SME that can leverage crowdlending. Many of their renovation projects are for large corporate clients, and they will not get full payment until the project is finalised. When they take on financing, they are able to preserve cash flow for actual operations of the business."

New Union - like other crowdlending platforms here such as Capital Match and MoolahSense - allows investors to lend directly to businesses in exchange for a fixed return. Unlike Capital Match and MoolahSense, New Union allows only accredited and institutional investors to participate.

On New Union's platform, SMEs typically obtain loans at pre-determined interest rates of as low as 8 per cent per annum, and that are supported by one or more investors usually within two weeks from the application date, said New Union's Mr Lee.

Since its launch in February 2014, New Union has raised over S$21 million in 82 deals for about 40 local SMEs, and more than S$170 million for close to 500 SMEs in Asia. To-date, all applicants have repaid their loans within the stipulated duration, which is typically three to six months, said Mr Lee. These are mainly SMEs in engineering, construction, services, fast moving consumer goods, food and beverage, healthcare, IT services, wholesale, retail and property, he added.

For its own financing, New Union has raised "a couple of million" in an angel funding round that includes Ivan Lee, co-founder of Thai Express who in 2008 sold a controlling stake in the business for S$80 million and now is a director of New Union. It is next looking to raise S$10 million in Series A funding for expansion into South-east Asia, Mr Lee shared.

Last month, New Union - together with real estate crowdfunding platform CoAssets and Sweden-based crowdfunding platform FundedByMe - announced a three-party alliance to grow the crowdfunding industry in South-east Asia.

Asked about the alliance's plans, Mr Lee said: "It would be to come together to crowdfund an upcoming campaign. That will form the first campaign jointly conducted across three crowdfunding platforms in Singapore. It should happen sometime in late Q3."

Meanwhile, Capital Match, which was launched in April 2015, has raised some S$950,000 for seven SMEs, while MoolahSense, which debuted in November 2014, has financed S$811,000 in four companies.