Malaysia's equity crowdfunding to be more vibrant next year

Juliana Jan, chief investment officer of Cradle Fund Sdn Bhd (left) and Andrew Tan, CEO of CrowdPlus.asia (right), presenting cheques amounting to RM250,000 each to Vincent Kok, chief eventgelist, VMO Rocks Sdn Bhd in the fundraising campaign announcement.

PETALING JAYA: Equity crowdfunding (ECF) in Malaysia is expected to be more vibrant in 2018 as its acceptance and awareness among investors and issuers are seen gaining momentum this year.

Propellar CrowdPlus Sdn Bhd chief executive officer Andrew Tan Yan Hoang said a lot of effort had been undertaken by the Securities Commission together with six registered market operators to educate the public and businesses on this alternative business funding.

He said in 2016, Malaysia saw 14 deals through ECF with total funds raised of RM10mil.

“Out of this, seven deals were through CrowdPlus with total amount raised of RM4.10mil.

“We have another six deals in the pipeline this year, which are expected to raise about RM5mil for issuers,” he told reporters after announcing a successful ECF campaign for VMO Rocks Sdn Bhd.

To grow the ECF industry, the company would focus on listing more small and medium enterprises, particularly those in the brick-and-mortar businesses which the market could relate to such as retailers and food and beverages sectors, said Tan.

The industry is also seeing increasing acceptance by investors and issuers based on the response and deals which were oversubscribed, he said, citing VMO as one of the success stories.

VMO, an instant booking platform for event venues and services with over 900 event venues across Malaysia on their sites, raised RM250,000 through ECF platform, CrowdPlus in just four days, making it the eighth successful campaign for the latter so far.

Meanwhile, VMO chief eventgelist, Vincent Kok, said the booking startup offered 14.3% equity and in a span of four days from March 20 this year, it secured 13 public investors to achieve the target and in addition, the offer was oversubscribed.

He said with the funds raised through ECF, together with another RM250,000 raised from a co-investment deal with Cradle Fund Sdn Bhd, VMO is now laying the foundation for market expansion, advertising and marketing efforts, as well as supporting technical development.

He said VMO planned to expand its business outside the Klang Valley to Penang, Ipoh, Malacca and Johor, and was eyeing to increase the establishments listed on its site from the current 900 to 1,500 establishments.

As of end-December 2016, Kok said VMO received RM39mil worth of enquiries compared to RM9.5mil in the previous year, while the value of bookings grew by five times to RM1.19mil from RM223,000 in 2015.

Along with the increase in the establishments, Kok said he also expected to double its bookings value to RM2.4mil this year from RM1.19mil achieved last year. - Bernama