Back in June 2015, Malaysia became the first country in ASEAN to introduce a regulatory framework to facilitate equity crowdfunding (ECF), and awarded licences to six market operators. One of them is Scandinavia’s leading crowdfunding platform, Fundedbyme. After more than a year in operation, we spoke to Angelld Quah, co-founder of Fundedbyme Malaysia, to explore a few things on ECF.
“Equity crowdfunding (ECF) is an alternative financing option. It is a very good opportunity, especially for young companies looking towards expansion, but it is still too early for them to reach out to institutional investors or venture capital (VC) firms,” said Angelld.
Angelld, apart from leading the operation of Fundedbyme in Malaysia, is also heading Alix Global, a neo-marketing firm, which expertise is in marketing through social media platforms. In fact, the ECF operator license was originally given to Alix Global, which later teamed up with Fundedbyme, which was founded in 2011 in Stockholm, Sweden.
Fundedbyme has offices all over Europe, Singapore and Malaysia. To date, the company has raised a total of US$32 million to 457 companies. It has 73,831 members from 178 countries.
Angelld’s move to partner with this fast growing Scandinavia company was a strategic one, merging together Alix Global’s expertise in marketing and Fundedbyme’s vast number of investors beyond the Malaysian borders.
Two Campaigns Successfully Closed
In Malaysia, Fundedbyme has thus far successfully helped two companies close their fundraising campaigns.
The company’s first campaign, Halal Speed Dating, a matchmaking site for muslim users, raised 100% in less than two days. In the end, the campaign was closed with a total of US$95,074 raised from 42 investors.
For this campaign, data from Fundedbyme shows that more than 35% of the investors reside outside of Asia, and more than 45% of the total investors come from outside Malaysia.
About 4 months after its first campaign, Fundedbyme announced another successful campaign, iTalent, an enterprise digital HR company that offers affordable cloud-based people management solutions.
It reached about 320% of its total goal of €86,500 (US$93,210), closing at €277,209 (US$295,830) in November 2016 with 29 investors.
More Than Just Capital
Fundedbyme Malaysia differentiates itself from the rest of the market operators by integrating its marketing expertise in driving the company’s fundraising campaigns.
“As a marketer, we know how to communicate with the audience, we know what kind of messages to deliver,” Angelld said that creating awareness for one’s business is an extremely crucial element when it comes to crowdfunding campaign.
ECF platform, which essentially involves the crowd, Angelld highlighted that it can also be used as a platform to help you do market validation, as well as contributing to the company’s marketing effort. To a certain extend, it may come in handy for market expansion as well, depending on where the investors reside. For the case of Fundedbyme, Europe is definitely its stronghold.
Marketing may be the crux of crowdfunding campaign. However, to some discerning investors, they may be very well aware that some marketing campaigns can sometimes be over-selling or downright misleading. When asked about how Fundedbyme Malaysia handle investors confidence in this area, Angelld stressed that the company is guided by business ethics.
“Our main objective is to bring awareness to the ECF opportunity. We are very transparent in communicating the pros and cons of ECF,” said Angelld, “we help companies engage the right audience and educate the market. As a marketer, we don’t oversell and we don’t sell dreams.”
Fundedbyme encourages its investors to make informed decisions. “You should invest in something in which you have good knowledge. Don’t be emotional. Investors must read the business proposals and financial reports. Investment must be done logically and rationally,” said Angelld.
In Malaysia, the awareness on ECF is rather low, as you can see from Fundedbyme’s campaigns that a big portion of investors are coming from Europe. However, Malaysia has taken a big leap forward to regulate ECF, not only allowing companies better access to funding, but also enabling better access for people to participate in this burgeoning economy.
Moving forward as an industry, it certainly needs more investor education to help accelerate the progress.
As of October 2016, according to a statement released by the Securities Commission in Malaysia, 11 Malaysian companies have raised a total of RM8 million (US$1.79 million). This is not including the iTalent’s campaign, which was closed in November 2016.
Fundedbyme, apart from being an ECF platform, it was also recently awarded the license to operate as a “peer-to-peer” finance platform by Securities Commission Malaysia (SC).