Singapore launches first equity crowdfunding platform

Known as FundedHere, the platform came online this week but is still awaiting legal approval from Monetary Authority of Singapore (MAS) which last month issued a public consultation paper on securities-based crowdfunding.

Using FundedHere, start-ups are able to raise equity-based funding and venture debt rounds that are as small as S$5,000 ($3,700) for period of no more than a year. In a release, the platform says it will receive a "success fee" for funds or loans that have been raised.

It will initially focus on Singapore and Southeast Asia, leveraging Lim's existing network of entrepreneurs and high net worth individuals (HNWIs). A panel of mentors, and lead investors, is in place to support the start-ups being funded.

Crowdfunding platforms have been proliferating in Asia for some time but equity crowdfunding, which sources capital from investors rather than philanthropic fans, is a relatively new phenomenon.

The US has led the way with several equity platforms launched in the wake of its Jumpstart Our Business Startups (JOBS) Act, a piece of legislation intended to encourage the funding of small business in the US by easing various securities regulations.

Regulators in Asia are now playing catch-up. For its part, MAS proposes to ease the current financial requirements for intermediaries that deal in securities to allow potential platform operators with lower financial resources to apply for a licence to offer security-based crowdfunding.

This includes lowering the base capital requirement for such platforms to S$50,000 from the current S$250,000. However, one caveat is that no platform can hold customer cash, assets, or positions. Neither can it act as a principle in customer transactions.

The regulator has yett to clarify whether advertising rules covering restricted offers made to accredited investors prohibit crowdfunding platforms from advertising themselves. The consultation runs until March 18.

Singapore has a handful of native non-equity crowdfunding platforms. Among them is Crowdtivate which was set up by Singapore telecom company StarHub and is co-managed by independent platform Crowdonomic.

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• Topics
• Southeast Asia
• Early-stage
• Technology
• Singapore
• Crowdfunding
• seed
• Technology