Babydash on its home stretch, can it hit RM2mil ECF target?
By Karamjit Singh March 27, 2017
- Founders confident of hitting RM1 million via PitchIn, may go direct for remainder
- With 68 investors and counting, true power of community comes through
ALREADY considering the option of raising money through equity crowd funding (ECF), Lavinie Thiruchelvam and Tay Shan Li were electrified by the news, last September, that kakitangan.com had raised RM1 million within 24-hours of their ECF campaign going live.
“We called Effon Khoo straight away and spoke in detail on how he managed it,” says Lavinie. “The point that hit home with kakitangan was that raising larger amounts was possible through ECF and that was great to hear, because having spoken to some of the other platforms, we were advised to target between RM100,000 to RM200,000.”
The caveat to raising larger sums was to have a loyal community. And that, the babydash founders knew they had, having painstakingly built a base of 20,000 parents, mostly mums, through their baby products e-commerce site, babydash.com.my since 2011. No overnight success story here.
“We just needed to educate our customers and even getting 50 moms as our investors will be a good enough start as we think they will be our brand ambassadors,” says Lavinie.
That was their cautious hope when DNA spoke to the two founders end January at a road show, as they were preparing to launch their 45-day fund raising campaign on PitchIn from Feb 15 with the target of raising RM2 million in exchange for 20% equity.
Today, with five days to go before the close of their campaign, with the minimum amount of RM720,000 reached and having set a new benchmark of 68 investors in Malaysia’s fledgling ECF market, a confident Tay tells DNA, “we will cross RM1 million in funding.”
That confidence in not premised on the belief of a typical last minute surge by investors, though they wouldn’t mind that happening as well. “We have had so many people tell us they will be investing but we don’t see their names among the committed investors yet,” says Tay somewhat nervously.
Rather it is based on the fact that the duo have lined up two investors who will be investing RM100,000 each in the coming week. Beyond that the RM2 million mark is a target they will be working towards via a direct approach to investors and already are in talks with two parties for RM500,000 each.
The challenge Tay and Lavinie are facing with such investors is their reluctance to put their names down on the ECF platform, preferring instead the anonymity of a behind the scenes private investment without having to register their details through a website.
And that’s going to be a challenge all entrepreneurs face when they take the ECF route in Malaysia.
For Lavinie and Tay, both DNA Digerati50, the focus after the campaign is on ensuring they can deliver shareholder expectation. And managing those expectations are key as one of the many questions they have received from interested investors has been about their dividend policy.
“Some are trying to understand the difference between investing in us versus in unit trusts which come with dividends. This is the education process where we tell them that they are investing in a growth company where we will be re-investing our profits to power the growth of the company,” says Tay.
Selling the growth story of Babydash has not been difficult, as Lavinie and Tay have built a sense of community between Babydash and its customers. “We have established a relationship between each and every one of them through the events we organise which include parenting talks. Our community now have a chance to ride on our growth with a minimum investment of just RM1,500 and many of our investors have done just that,” says Shan Li.
Correction. They are not just your average investors but will be brand ambassadors for Babydash, the duo believe.
“This is truly the power of the community coming together to support us and show their confidence in our future,” says Tay, adding that both her and Lavinie are really stoked about driving Babydash to the next level after they close the funding campaign.
Drivng them on is their belief that there still is huge upside to the business that hit RM2.5 million in revenue in 2016. Their own estimation is that 500,000 babies are born a year in Malaysia with parents averaging a monthly spend of RM200 per baby for the first five years (the age category they are focused on).
If you’re calculating the revenue potential, it’s RM6 billion per year for just Malaysia. That’s strong enough incentive for those who believe in Babydash and the ability of its founders to drive it to hit the heights.
To find out more about Babydash and invest in them please go to http://bit.ly/babydashecf
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