KiniBiz opts for equity crowdfunding with pitchIN
By Digital News Asia December 9, 2015
- Exercise to begin later this month or early next month
- Business news outfit keen to retain its independence
BUSINESS news outfit KiniBiz has announced plans to go for equity crowdfunding under the guidelines approved by the Securities Commission of Malaysia (SC), the first Malaysian company to do so.
KiniBiz, jointly launched by its chief executive officer and founding editor P. Gunasegaram (pic above) and independent news pioneer Malaysiakini in early 2013, operates a subscription-based business portal and publishes a fortnightly full-colour magazine focusing on Malaysian business.
The crowdfunding exercise is expected to commence later this month or early next month, KiniBiz said in a statement. It is currently in discussions with platform operator pitchIN to finalise the terms and conditions.
The fundraising will be for its expansion in the next few years, particularly to promote the magazine, increase its online presence and look into regional diversification, said Gunasegaram.
He said that KiniBiz found equity crowdfunding a suitable way to raise funds by appealing to a wide cross-section of the public to raise relatively small amounts of money.
Also, he added, it does not stop larger investors to come in as well if they choose to do so.
“On top of that, this form of equity crowdfunding helps us to keep our independence by spreading our shareholding among a number of investors and enables the original shareholders to maintain majority control,” he added.
KiniBiz is currently 60% owned by Gunasegaram while the other 40% is owned by Malaysiakini. KiniBiz is operated as a separate news portal focused on business and big picture politics with its own editorial team.
The equity crowdfunding is expected to involve the issue of new shares in KiniBiz which will be capitalised at RM2 million before the issue. The public will have the choice of subscribing in multiples of RM1,000 through a crowdfunding platform to be operated by pitchIN. [RM1 = US$0.24]
The SC had earlier this year approved six companies to operate platforms for equity crowdfunding (ECF) in Malaysia. Under the guidelines, small startups and business ventures will be allowed to raise up to RM3 million from the public.
They are allowed to go back to the market for a further RM2 million, to make a lifetime maximum of RM5 million.
Retail investors are allowed to invest a maximum of RM5,000 each in the offering while sophisticated investors will not have a limit. The latter are defined as those individuals or institutions with a nett worth of over RM3 million by self-declaration.
Angel investors, and funds which help budding entrepreneurs and startups, can invest up to RM500,000 over a 12-month period.
“We are delighted that KiniBiz plans to reach out to investors through equity crowdfunding,” said pitchIN chief executive officer Sam Shafie (pic).
“KiniBiz has created history by being the first company in Malaysia to announce its intention to raise money from the public using such a platform.
“Equity crowdfunding is an exciting and viable option for privately held businesses to raise capital. It enables companies seeking capital to reach out to a very wide spectrum of investors, an option previously possible only via IPOs (initial public offerings),” he added.
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