Launched 10 years ago, Malaysia’s pitchIN aims to be the digital fundraising and investments hub in SEA
By Karamjit Singh April 19, 2022
- All eyes on Sam Shafie and Kashminder Singh as they build IEO
- Eye on P2P financing over mid term, synergies with other offerings
Unlike the quest for a digital bank licence in Malaysia, where there are no clear market favourites but feverish speculation, it was perhaps the worst kept secret in the fintech space that Pitch Platforms Sdn Bhd was an inevitable pick by the Securities Commission (SC) Malaysia as an operator for the Initial Exchange Offering (IEO) platform it was slated to announce last month.
And so it was duly confirmed on 23 March via a media statement from the SC that it had appointed Pitch Platforms, which operates in the market as pitchIN, as one of two operators for the IEO platform, to promote responsible innovation in the digital assets space.
While Kapital DX Sdn Bhd is the second operator chosen, all eyes will be on pitchIN and its founders, the charismatic, football loving, never seen without his baseball cap, Sam Shafie, and former tech journalist cum publisher Kashminder Singh who launched the company almost 10 years ago, in June 2012, to see if they can replicate the stellar market success they have had in the equity crowdfunding (ECF) space in Malaysia.
Not shy to tout this success, back in March 2020 on the release of their 2019 performance, they had declared pitchIN to be “the leading regulated ECF platform in the entire Asia Pacific region.”
The best was yet to come however. Benefiting from the rapid digital adoption by businesses in the wake of the pandemic, in early Nov 2020 they hit another milestone –recording US$24.1 million (RM100 million) in total funds raised for companies in just that year.
The stage was set for the duo to dream bigger – beyond Malaysia and beyond ECF, even though there is still deep untapped opportunity in Malaysia’s ECF market.
“The upside is huge as there are nearly a million SMEs in Malaysia. We have assisted over 130 of them to raise funds, so it is clear that there’s a lot more room for ECF. In addition, our incoming Secondary Market will draw more interest in ECF as not only will investors be able to invest in fast growing companies, they will later also be able to trade those shares,” he points out. The duo believe the opening of this secondary market to be a key inflection point to further increase the popularity of ECF in Malaysia.
And while it seems like they have just begun to scratch the surface of the ECF market, there is bigger game at play, driving their motivation to expand their fintech offerings.
“pitchIN aims to become the digital fundraising and investments hub in this region,” says Kashminder. “We want to progressively offer more fundraising and investments options in Malaysia and the Southeast Asian (SEA) region. Operating an IEO platform is a natural next step for us as we will now be able to offer companies the option to fundraise through the issuance of digital assets.”
A dedicated team is being set up to focus on this opportunity led by Chan Wei Chi, who, before coming onboard, was a co-founding member of SINEGY, Malaysia’s first homegrown digital asset exchange (DAX) approved by SC Malaysia.
The patient builders
While there is a lot of hype around digital assets, a broad category that runs from crypto currencies to various blockchain platforms with NFTs thrown in, Kashminder and Sam have proven themselves to be patient builders.
Few recall that they started their crowd funding journey in 2012 focusing on crowdsourcing funding for creative projects. And yes, it was inspired by KickStarter in the US. And yes, that also makes them the pioneers in crowdsourcing (now known as crowdfunding) in Malaysia.
The founders displayed bucket loads of grit and determination, driven by their belief that good ideas would get funded by the ecosystem. “We thought why not get everyone to help each other out. This serves two purposes. It strengthens the ecosystem and it serves to act as a form of validation for your project if enough people like it and give you money to chase your dream,” noted Sam in an interview with DNA in 2012.
But progress was slow, despite regulatory support that offered assurance and clarity to high net worth individuals used to investing in property as a way to diversify their assets and take risks.
But the duo persisted and there was no big celebration when pitchIN finally became profitable in 2019. On the key lessons learnt during the journey to profitability, Kashminder says, “I believe founders must always aim to find the right balance between growing fast and achieving profitability. This involves using their financial firepower wisely and by being nimble and flexible. The often-spoken adage that it is a marathon not a sprint is very true.”
It is this patience they have that will be a fortifying factor in building out their IEO platform. The hype aside, this is going to be a three to five journey at least to create a vibrant IEO market.
SEA ambitions boosted by strong market brand in Malaysia
Their SEA ambitions are boosted by the strong market brand they have built pitchIN into, with around 75% of ECF issuers in Malaysia relying on pitchIN to help them raise funds. They have many admirers for what they have achieved already. Some ecosystem leaders in Malaysia, Ganesh Kumar Bangah chief among them, have no hesitation in crediting them with doing more to promote the democratisation of funding and helping startups and SMEs get funding in Malaysia than any government agency.
This confidence in them translated to the duo raising US$2.5 million (RM10.5 million) in their own crowdfunding effort, though they had to use a different platform in compliance with SC regulations that ECF platform operators cannot raise funds on their own platforms.
The funding is targeted to take them beyond the next two years of their roadmap which covers an improved ECF platform, the pitchIN Secondary Market, IEO platform as well as exploring opportunities in other products and regions.
“Our pitch to our investors was simple. Invest in us and we will progressively grow into a digital investments and digital assets hub,” says Kashminder.
In the medium term, pitchIN is looking at the P2P financing sector as it believes this has synergies with its other offerings. “Beyond that, we have plans to offer other products in the digital investment and digital assets space,” says Kashminder, declining to elaborate.
Suffice to say, there is a lot to be done and who would want to bet against them that they won’t – in due course – achieve their SEA ambitions of being its leading digital fundraising and investments hub?
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