pitchIN becomes first ECF platform in Malaysia to raise US$47.3mil for companies
By Karamjit Singh December 15, 2021
- Crosses RM200 mil milestone 12 months after crossing RM100 mil
- New SC Malaysia guidelines lend additional tailwind to ECF sector
The latest validation that equity crowdfunding (ECF) has truly arrived as a viable funding option for Malaysian investors has come by the announcement of leading ECF player, Pitch Platforms Sdn Bhd (pitchIN) which announced that it has crossed US$47.3 million (RM200 million) milestone in November 2021, just 12 months after setting an ECF milestone of US$23.65 million (RM100 million) funds raised.
Commenting on the record breaking growth, pitchIN CEO Sam Shafie says, “There is no doubt that ECF is accelerating at pitchIN. We remain the fastest growing ECF platform with a substantial market share. It took us three years to reach RM40 million funds raised, another 1 year to raise RM60 million and hit the RM100 million in Nov 2020. Now, just 12 months later, we have added another RM100 million to reach RM200 million.”
[RM1 = US$0.236]
Kashminder Singh, Chief Strategy Officer of pitchIN describes the large amount raised as reflective of Malaysia experiencing a very entrepreneurial stage. “There are plenty of startups and SMEs emerging due to rapid digitalization and emerging opportunities. Coupled to that, ECF is now mainstream and more great companies have become aware of ECF.”
Investors looking to invest in fast growing companies now see ECF as offering them the opportunity to come in at the stage where a company is likely to grow very fast, thus delivering high returns to investors.
“In 2016, pitchIN set out to add value to the funding landscape through the democratisation of fundraising. Today, pitchIN has become among the largest funding systems for SMEs and startups in Malaysia. We have assisted 124 companies to raise capital, with 6200 investments made by a growing network of all classes of investors such as VCs, family offices, sophisticated investors, angel investors and retail investors from Malaysia and around the world too,” says Sam.
Kashminder is confident that the record growth is sustainable. “There over 900,000 SMEs in Malaysia, with new ones starting all the time. Southeast Asia is a hotbed of growth and we expect this to be sustainable,” he said, pointing to another key development that underpins his confidence.
“Two weeks ago, Securities Commission (SC), Malaysia issued new guidelines that enable companies to raise up to RM20 million through ECF (up from 10 million). This widens our market reach.”
Even better, Kashminder says the SC has also opened ECF to unlisted Berhad (Limited) companies, “which means we can speak to a whole new segment of businesses.” PitchIN also got a boost in May 2020 when it became a Malaysian Technology Development Corporation ecosystem partner with MTDC allocating RM10 million funding to invest up to 30% in eligible companies on the pitchIN platform.
[Ed: Para updated with MTDC collaboration.]
The strong returns early investors have enjoyed has served to further boost the appeal of ECF, Kashminder says. “Investors who backed companies on pitchIN have seen their investments rise in value. Over the last 5 years, many companies that raised funds on pitchIN have grown significantly. Companies like Signature Market and Ray Go Solar have announced plans to go for IPO. pitchIN has facilitated private secondary trades of some companies at up to 6x investment returns.”
Such level of returns are very attractive when compared to other traditional investing options. Sam and Kashminder express confidence that over time, more Malaysians will add ECF investing to their investing portfolios.
The secondary market will also help and is coming very soon.
“We are very excited with the possibilities going forward. We are on track to launch the pitchIN Secondary Market in Q1 2022,” says Sam. “We are confident that this will attract more companies and investors to pitchIN as the platform will provide an exit option to investors. In addition, pitchIN is looking forward to offering Shariah compliant ECF deals next year.
Besides the record amount raised, 2021 also saw another record when pitchIN facilitated the largest single investment by an individual investment – RM3 million in Igotopia by Burhanuddin of Upin and Ipin fame.
As to their own growth plans, Kashminder says pitchiN only plans to explore overseas expansion later in 2022. “Indonesia, along with Philippines and Vietnam are countries we want to explore. Our current focus is on driving even more growth in our ECF business as well as launch new related services in Malaysia.”
The icing on the cake for the two founders is winning the Chairman's Award by the Malaysian Venture Capital and Private Equity Association (MVCA) at its MVCA Awards 2020/2021 event that took place today. “We’re honoured, we’re delighted,” says Sam.