News / 12 June 2015

Malaysia’s Securities Commission allows 6 players to launch equity crowdfunding services

by Liz Lee

Deal Street Asia

 

The Securities Commission Malaysia (SC) Thursday approved six equity crowdfunding (ECF) operators, opening  an alternative funding platform for small businesses and entrepreneurs.

The six platforms, local and foreign, are Alix Global, Ata Plus, Crowdonomic, Eureeca, PitchIN andPropellar Crowd+. These ECF operators are expected to commence their platforms by the end of 2015.

Malaysia has also become the first country in Asia-Pacific to legislate ECF.

SC chairman and Malaysian Venture Capital Development Council chair, Ranjit Ajit Singh said the ECF framework is an important milestone for inclusivity in the Malaysian capital market. “The establishment of the ECF is a component of SC’s strategy to democratize finance. Over the years, Malaysia has developed a diversified and well established MYR2.8 trillion capital market, helping businesses to grow as well as financing long-term investments in the economy,” he said at the Synergy and Crowdfunding Forum 2015 (SCxSC).

The six operators were shortlisted from 27 applicants.

At the SCxSC forum, the Multimedia Development Corporation (MDeC) also signed a memorandum of understanding with Crowdonomic, PitchIN and Propellar Crowd+ to conduct programmes in funnelling ICT companies to the ECF platforms.

MDeC CEO Yasmin Mahmood said: “MDeC continuously collaborate with strategic partners in facilitating innovative solutions and assistance to companies.”

Alix Global is a digital marketing agency and WeChat solution provider in Malaysia. The company is in partnership with FundedByMe, a Swedish crowdfunding platform with a Scandinavian nexus of investors, which will provide opportunities for Malaysian companies to attract funds from Europe.

Ata Plus is a crowdfunding platform, matching Syaria-complaint businesses with investors seeking substantial business opportunities. The firm aims to operate with a focus on local SMEs and social impact initiatives.

Crowdonomic, with offices in Singapore, Malaysia and Indonesia, has the backing of US and Japanese investors as well as a presence in Singapore.

Dubai-based Eureeca is a UK Financial Conduct Authority regulated entity, providing Malaysian companies an opportunity to raise funds from the Gulf region.

Malaysian crowdfunding operator PitchIN is a rewards-based platform with tie-ups and partnerships with government agencies and angel investors networks.

Propellar Crowd+ has partners in both North Asian and Oceania markets such as Hong Kong, China, Taiwan and New Zealand. It aims to be the ECF hub for Asean, with plans to collaborate with Malaysian government agencies, and to tap into various early-stage incubators and investing networking groups in the region.

“We are thrilled and honoured to receive this much coveted registration. The registration is the high point of our continued constructive engagement with regulators to help shape competitive crowdfunding policies and build fully compliant and professional businesses in the markets we operate in. Our collaborative approach distinguishes us from many self-proclaimed crowdfunding platforms currently operating in grey areas,” said Leo Shimada,  co-founder and chief executive officer of Crowdonomic.

Singh added in his speech: “Having pursued legislative reforms to being this regulatory framework into effect, the SC is very much encouraged by the support which has been shown for this initiative by both sides of the Parliament, with ECF projected to complement existing avenues for early-stage financing such as venture capital and private equity.”

 

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