PRIVATE investment platform Fundnel and multi-bank supply chain finance financing platform CapitalBay announced November 8 their partnership to bolster and develop the alternative financing ecosystem in Malaysia. Both firms aim to facilitate fundraising activities for businesses through their online platforms while opening up access to private market investment opportunities for everyday investors.
According to the Securities Commission Malaysia (SC) 2018 Annual Report, the Malaysian capital market continued to play a key role in fuelling the economy against a backdrop of challenging global market conditions. Alternative financing channels, namely venture capital, private equity, equity crowdfunding (ECF), and peer-to-peer (P2P) financing, raised 808.4 million Malaysian ringgit (US$197.7 million) in funding, illustrating the private capital market’s ability to play a significant role in fulfilling the requirements of underserved businesses particularly small and medium-sized enterprises (SMEs).
Speaking on the current landscape, Wan Mohd Firdaus Wan Mohd Fuaad, country director, Malaysia, Fundnel says, “Alternative financing and investment in Malaysia is fairly nascent, relative to the other markets that we operate in where it has become the avenue of choice for fundraisers and investors. Considering the supportive regulatory framework, we are optimistic that the local market will continue on this positive growth trajectory. We have observed that more companies today are choosing to stay private for longer because they can tap into private market with ease, through ECF and P2P platforms — which comes at a fraction of what it would have cost if they had pursued a public listing.”
Fundnel entered Malaysia in 2018, to power local businesses through a cost and time effective financing method, while offering select primary and secondary investment opportunities in growth and pre-IPO stage businesses and funds, locally and overseas for the company’s network of 11,000 investors.
Commenting on the partnership, Ang Xing Xian, co-founder and CEO, CapitalBay, says, “By joining hands with a reputable partner like Fundnel, we gain strength in numbers. Pulling together our resources has amplified our outreach efforts — we were able to educate the residents of Johor Bahru, Kuala Lumpur, Penang, Sabah and Sarawak, on ECF and P2P as alternative investment channels. The two-month roadshow was incredibly well-received, allowing us to meet close to 300 new investors. We are certain this partnership can help narrow the funding gap by providing an alternative source of capital for businesses.”
The roadshow was organized in conjunction with EntreVestors, an educational platform which gathers entrepreneurs, SMEs, startups, investors and professionals in New Finance and New Investment in Malaysia.
CapitalBay also chose to work with Fundnel for its own equity fundraising effort, for the launch of the CapitalBay P2P platform. In the weeks leading up to the launch, CapitalBay garnered overwhelming response from local investors and had received a collective commitment of 1.3 million Malaysian ringgit from 55 individuals, surpassing its campaign target of 1 million Malaysian ringgit. This ECF campaign went live on the Fundnel platform on October 24 and will close on November 30.
This campaign is also one of the first few to leverage the Malaysia Co-Investment Fund scheme (MyCIF), which was jointly incepted by the Malaysian government and the Securities Commission in July, to enhance access to financing and increase investor participation within the country.