- Releases Equity Crowdfunding Report 2017
- pitchIN grabbed 60% market share in 2017
MALAYSIAN equity crowdfunding platform pitchIN released its Equity Crowdfunding Report 2017 on Jan 8, making data on the Malaysian equity crowdfunding (ECF) space available to the public.
According to the report, 2017 was a breakout year for the Malaysian ECF industry, with numbers of successful ECF campaigns jumping from 15 in the previous year to 22, and the total amount raised from RM10,975,389 (US$2,742,853) to RM23,393,973 (US$5,846,332) , an increase of more than RM12 million (US$2.9 million).
“This explosive growth has almost made ECF mainstream,” said pitchIN co-founder and chief strategy officer Kashminder Singh, adding that there is much more public awareness of what ECF is now compared to 2016.
He said that big or interesting deals serve as tipping points that bring more awareness of ECF and its potential to the public and to startups, citing as an example cloud-based human resource solutions provider Kakitangan.com, which raised its target RM1 million in less than 24 hours on pitchIN.
Also last year, MyCash Online was the first fintech startup to successfully fundraise via ECF –on pitchIN – which Kashminder opined has encouraged more fintech startups to try ECF. This year, pitchIN already has two fintech startups registered for campaigns – Curlec and Mobiversa.
Also signed up for a campaign is Commerce.Asia, Ganesh Kumar Bangah’s e-commerce enabler. “Deals like commerce.asia, when they happen, will be another tipping point that will help us take the whole industry to new levels,” said Kashminder.
“It’s very important to get someone like Ganesh, who is a successful entrepreneur, to choose ECF as an option for them to raise money because it sends a message to the industry that ECF is not the last option; it could be your first option,” said pitchIN co-founder and chief executive officer Sam Shafie.
Sam added that the message pitchIN wants to get out to the public is that when companies are thinking about fundraising and getting investors of value, the crowd is a great option because, as investors, it does good work of getting word about the company and product out.
“When you convert them into investors, they automatically become your marketers and evangelists. This is something we want people to see – the value and benefit of ECF compared to going straight to corporate investors,” he said.
pitchIN also announced the pitchIN Young Investors Club, which is aimed at bringing investing education to youths as well as opportunities for them to start investing through exclusive opportunities open only to club members.
Sam said that pitchIN expects to continue its growth momentum and again record double digit growth figures for 2018.
“We have plenty of great companies coming up this year. We are confident that there is something interesting for just about any category of investors. At the same time, initiatives like our pitchIN Young Investors Club will enable more Malaysians to invest in fast growing companies. We look forward to another great year for pitchIN.”
More growth for ECF
pitchIN is one of six ECF platforms in Malaysia and is the market leader in terms of share of funds raised – 60%. In 2017, the pitchIN raised a total of RM14,022,132 (US$3,506,626) for 12 issuers, more than the total funds raised by the other five Malaysian ECF platforms.
The platform also commanded 55% of the market share for successful campaigns last year – 12 out of a total of 22 ECF campaigns in Malaysia were hosted on pitchIN.
The ECF campaigns on pitchIN have also been strongly backed by investors. Six out of the 12 campaigns on pitchIN last year - Babydash, MyCash Online, Signature Market, WOBB, SalesCandy and QEOS LED – raised more than RM1 million (US$250,000) each, with QEOS LED the first campaign in Malaysia to reach the maximum RM3 million funding target. In total, 856 investments have been made on pitchIN campaigns to date.
pitchIN announced that there are already 20 startups registered on the platform for campaigns this year. Besides the three mentioned above, also registered are parking payment app JomParking, alcohol delivery platform Boozeat, crowdshipping platform Yellow Porter, and brick and mortar company Lord’s Tailor, for whom the ECF will kickstart digitalisation.
Sam said that pitchIN is looking to have almost 40 companies registered for campaigns by June. “I think the momentum is with us, investors are already educated about what we do. Most of them are looking forward to the next deals. We're fairly confident that by June we can hit the numbers we hit in all of 2017.”
The current line-up comprises mostly of tech companies, which is the same trend as last year – the ECF Report shows that less than a third of the companies on pitchIN in 2017 were non-tech companies. According to Sam, this also reflects investor appetite.
“However, there are more and more non-tech companies [getting into ECF] as they get more educated and made more aware that there is this option to raise money. I think we will be seeing more [non-tech companies] this year than we saw in 2017, though the majority will still be tech companies,” he said.
Alternative trading system on the horizon
pitchIN is also participating in the regulatory sandbox sessions under the Securities Commission Malaysia’s FinTech Innovation Lab and will be submitting a proposal to the SC for an alternative trading system (ATS) that will allow investors to make exits or make some money from their investments.
The introduction of ATS in the Malaysian capital market was announced in Budget 2018.
“This is something we want to focus on in 2018 – a form of ATS we can offer to companies and shareholders who have raised money on the platform,” explained Sam.
He added that pitchIN is still exploring options of working with other platforms to establish this ATS but was unable to confirm which direction pitchIN would take.
“It’s still very early days and we are sizing up the various options on hand. We could do it on our own, with a partner or the whole industry could come together. There are pros and cons to each strategy.
“We definitely want to have a discussion with the SC and I suspect industry players will also want to be part of the discussion,” said Sam.
“Ultimately, when the [ATS] comes into being, and that’s not going to be long from now, I think we will have a full-blown ecosystem that everybody will be able to participate in,” said Kashminder.
The pitchIN Equity Crowdfunding Report 2017 will be available for download at the pitchIN website from Jan 15.
MyCash Online breaks into international market
SC sets the pace for digital innovation in Malaysia’s capital market
6 startups chosen to spearhead growth as TENxCLUB fellows
For more technology news and the latest updates, follow us on Facebook, Twitter or LinkedIn