CROWDFUNDING platform FundedHere has launched FundedX, a private stock exchange in Singapore to facilitate the trading of shares of high-growth startups and privately held companies in South-east Asia.
The platform is touted as a first for Singapore and the region, according to FundedHere, an equity and debt crowdfunding company that has raised more than S$10 million for companies since its 2016 launch.
FundedX is meant to create a secondary market that provides “much needed liquidity” for shareholders of privately held companies in the region.
Daniel Lin, co-founder of FundedHere, told reporters on Tuesday: “In the private market, there is a lot of fear that if you own shares of private companies, you cannot sell those unless through a trade sale or initial public offering (IPO). Liquidity is therefore a problem.
“And people always want out. FundedX is a centralised exchange that allows people to sell their shares, and promotes more occasions for companies to provide more exit options.”
Through FundedX, legacy shareholders such as former employees and early investors can monetise their returns. Employees with stock options seeking partial liquidity can also submit verification of ownership to participate on the exchange.
Interested investors can submit buy requests which will be processed through FundedX’s algorithm to match transactions. Once shareholders and investors are paired on the platform, the company, whose shares are being transacted, will then need to approve the sale and deal terms for the transaction go through.
Restrictive clauses include right of first refusal, company-imposed lock up periods, company veto rights and company repurchase rights.
FundedX aims to have the end-to-end process completed within two weeks, it said on Tuesday.
Mr Lin added: “We see this new platform as a complementary and natural extension of FundedHere’s current offering that will support yet another key stage of the funding cycle for emerging companies.”
FundedX plans to expand to Malaysia and Indonesia in the next 12 to 18 months, after getting the relevant licences in dealing in crowdfunding and securities in each country.