Crowdfunding firms form alliance to boost industry in S-E Asia

Singapore

THE largely dormant crowdfunding space in Singapore was jolted on Wednesday by the news of a three-party alliance comprising local platforms CoAssets, FundedByMe and New Union. The alliance seeks to grow the South-east Asian crowdfunding industry into a "credible, trustworthy environment", said its members in a statement.

BT has learnt that the three platforms will exist independently and separately, but will pool their resources and network and play off one another's "unique strengths" in different industry verticals.

CoAsset's expertise, for instance, is in real estate, while FundedByMe's is in small and medium enterprises (SMEs) and startups, and New Union's in debt financing, said an alliance spokesman. "By pooling their resources, they're able to maximise their network and create wider awareness for crowdfunding in the region."

The alliance also aims to boost crowdfunding as an alternative financing scheme for SMEs and startups, and an additional platform of investment for investors.

Said the spokesman: "The biggest challenge is market education. Crowdfunding enjoys keen interest, and the industry gets plenty of attention through the bigger crowdfunding players. Yet, many people have a narrow view of crowdfunding, and many businesses who like the idea of crowdfunding don't know how to go about tapping its potential."

The alliance's priority is therefore to develop marketing campaigns that will expand the market's understanding of crowdfunding. A "combined project" for Q3 2015 is in the works, while joint conferences have been planned for the next few months.

"When we look at the financial industry, our experience is that we've found how well we complement existing players in the region. We've been approached by many traditional financial institutions, who are warming up to the idea of strategically incorporating crowdfunding in their business," added the spokesman.

To-date, the alliance has collectively raised over S$200 million from crowdfunding campaigns: S$37 million from CoAssets, S$21 million from FundedByMe and S$163 million from New Union.

Globally, the crowdfunding industry is set to double this year to over US$34 billion, according to Crowdfunding.org; Singapore has also committed to position itself as a "premier equity crowdfunding hub" in Asia.

On the proposed regulation by the Monetary Authority of Singapore to restrict equity crowdfunding to accredited investors, the spokesman said this will limit the reach of crowdfunding to a "larger segment" of the market. The alliance plans to work with regulators to broaden the scope of equity crowdfunding here, he added.

Meanwhile, news of the alliance had not gone unnoticed by industry players, with an unnamed operator saying that leaders in the crowdfunding space will do the right thing and work with lawyers and regulators to build compliant businesses no matter what. "Just hunker down and get the work done," the operator said.

Paul Niederer, managing director of crowdfunding advisory firm CSW2, added: "(What the industry really needs) are clarity in terms of equity crowdfunding regulations for unlisted securities, and a major serious player that gains significant traction."

CoAssets is a real estate crowdfunding platform launched in July 2013; FundedByMe is a Sweden-based platform launched in Singapore in January 2014 that offers reward-based, debt-based and equity crowdfunding; New Union, a homegrown debt-based crowdfunding platform, was founded in July 2013.

Other crowdfunding players here include Crowdonomic.com, Crowdtivate, FundedHere and Capbridge (by Singapore Exchange and Clearbridge Accelerator).