KakiTangan raises RM1mil from pitchIN in record time of less than 24 hours
By Masyitha Baziad September 28, 2016
- 35 investors pledged in to support KakiTangan’s seed stage funding
- Huge boost for ECF as funding platform, serious option for startups
Kakitangan.com Founder with pitchIN team members
RAISING RM1 million in seed funding in Malaysia may never be the same again – thanks to Coastal Hectare Sdn Bhd’s incredible feat of raising that amount – in less than 24 hours!
A cloud based human resource solutions provider through its KakiTangan.com portal, KakiTangan hit its RM1 million (US$242,800) target through equity crowdfunding (ECF) platform pitchIN, yesterday, Sept 26.
“We received tremendous support from our customers. These are the people who know our product, they can see where KakiTangan is heading to, and they are willing to pledge their support to us,” its co-founder Effon Khoo told Digital News Asia (DNA) in an email.
Previously, KakiTangan had received a RM150,000 (US$36.3k) grant in 2016 from Cradle Fund and joined Cradle’s Coach & Grow Programme (CGP) in 2015. The startup also took part in Alliance Bank’s SME Innovation Challenge in 2015 and MaGIC accelerator program in 2016.
Khoo said that the funds, mentorship, and guidance he received from all the programs helped him improve and grow KakiTangan’s business further and prepared the team for the fund raising.
He admits that he and the team are overwhelmed by the amount of support received, and especially when the president of the Malaysian Business Angel Network (MBAN) Dr Sivapalan Vivekerajah also made a pledge to support them.
Sivapalan sees KakiTangan’s success as a very positive catalyst for ECF and angel investing. “Many of their investors are angels,” he says.
For those hoping to get in on the funding action, that window has closed now. “We actually stopped taking money when we hit the RM1 million mark,” last night, says Khoo.
Most of the investors are business owners who know the startup’s product well, and understand the pain point it is solving.
Keeping his feet on the ground, Khoo says the focus is on improving the customer experience and product to help more companies improve their human resource operations.
Meanwhile, pitchIN cofounder and chief executive officer Sam Shafie believes that KakiTangan’s success is anchored by its strong team, which has created a product that can relieve the HR related pain points of smaller companies, especially SMEs.
“KakiTangan has been available in the market for nearly a year, and their product is being used by more than 3,000 businesses in Malaysia so far. Many of them are startup as well,” he tells DNA in an email.
According to pitchIN’s website, 35 individuals invested in KakiTangan with largest investment valued at RM202,800 (US$49,200).
Great product, grateful customers trumps strong marketing
While entrepreneurs opting to use ECF platforms to raise money are urged to have comprehensive marketing plans to support their fund raising, Khoo feels the secret behind his record breaking funding is to have advocators that believe in your brand.
“If the target audience invests in you, they would normally have two reasons for doing so. First, they believe that what you are doing is truly helping them and the community. Secondly, they believe that what you are doing has a bright future.”
Khoo did not allocate a special marketing budget for the ECF platform and he only allocated his daily marketing budget. "The real marketing comes from your customer’s experience of using your product, and the relationship between you and the customer,” he explains.
Khoo also cautioned that allocating a big marketing budget when you are raising funds via an ECF platform might lead to investors who do not know you or your product and are merely investing for the financial returns.
“This is very hard for early stage investment,” he feels. “You would rather have your investors to know you and believe in you.”
Sam added that a strong word of mouth campaign also worked well for KakiTangan, as each satisfied and happy customer will recommend the product to their friends.
“The team has managed to garner trust and a love for their product early on, that is why they managed to pull this off as fast as they did,” he concluded.
For pitchIN, KakiTangan is the platform’s third success. The previous two are educational college KRU Academy which raised RM260,000 (US$63,200), and delivery service RunningMan which raised RM175,000 (US$42,5k00) in 24-hours.
According to Sam, the secret sauce to successfully raising capital through pitchIN or any ECF platform rests on three pillars; “transparency, availability and clarity”.
“I think the same lessons were also applied to the previous companies that successfully raised on pitchIN. First, founders who are looking to raise money on an ECF platform need to understand that they need to be transparent and visible as possible,” he advises.
“Pre-marketing is essential, startups also need to make themselves available during events when we meet with potential investors. Besides that, they offer relevant documents to address pertinent points of the business,” he adds.
“The startups may want to identify a number of investors and build up a significant portion of investment interest before launching (similar to the book building exercise in initial public offering), then coordinate the first day carefully,” Khoo suggests.
Key moment for growth of ECF platforms?
While the ECF platform as a funding tool is still in its early stage in Malaysia, Khoo is hopeful that, sparked by his successful campaign, more startups can leverage on it to get funding, faster.
“As investors get more comfortable with ECF, I feel it is actually a more favourable option for early stage investments.”
Be that as it may, Sivapalan notes that there is still inadequate awareness about ECF and even when people are aware, “they still don’t know how it works or how to invest and evens startups still don’t know how to get listed.”
Education efforts need to continue and, “all ecosystem players need to ensure they educate their communities on the viability of ECF as a fund raising platform.”
For now, KakiTangan’s funding success has become the best awareness tool for ECF.
“We do not have a shortage of startups and companies that want to use the ECF platform as an avenue to raise their funding. Even as we speak, we are receiving requests from startups and companies after hearing about KakiTangan raising RM1 million within 24 hours,” says Sam.
KakiTangan.com offers a one-stop HR platform for SMEs
pitchIN Equity launches, first issuance in mid-April
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