SINGAPORE, July 11 — As the pick-up in entrepreneurial innovation and projects drives demand for alternative financing, Singapore is ripe for crowdfunding and the nation should find ways of embracing it with the right regulatory framework in place,  Jeffrey Chi, chairman of Singapore Venture Capital and Private Equity Association said yesterday.

“Crowdfunding is going to disrupt ways in which companies raise funds … It is already big outside Singapore.

“What it really means for Singapore today is that we should find ways of embracing it and get things to work within the right regulatory framework and not really restrict it.

“While it is true that it is not an easy task for regulators, it can be big in Singapore only if necessary regulatory changes happen,” Dr Chi said at the Expo for Property, Investing and Crowdfunding.

Crowdfunding refers to the practice of raising money from a large pool of people via the Internet.

It gained momentum after the global financial crisis, when traditional financial institutions such as banks curbed lending, forcing entrepreneurs as well as small and medium-sized businesses to turn to the Internet so as to connect with investors to fund their operations.

Singapore-based CoAssets is the first crowdfunding platform for real-estate projects in South-east Asia, targeting deals including bridge loans and working capital for developers and investors’ seeking equity investment in property.

“The real-estate crowdfunding business has great potential for growth, and we look forward to leading it,” Getty Goh, co-founder and chief executive of CoAssets, told TODAY.

“While Singapore has a good start-up ecosystem, more support is needed for certain growth-stage companies…

“In our financial system, there is a funding gap in the S$500,000 to S$5 million (RM1.4 million to RM14 million) category, a segment banks usually prefer to ignore, keeping in mind much bigger deals on their plates.

“This is our focus market, where we want to establish ourselves as a credible player,” Goh said.

“We are sort of an incubator to upcoming real-estate developers and new investment ideas, providing them with a funding platform.

“The name of the game really is empowerment,” he added.

About one out of four ideas hitting the platform gets successfully funded after it passes a detailed risk analysis process, he said.

The business margins are about 3 to 5 per cent.

CoAssets recently did a compliance listing on Australia’s junior market, the National Stock Exchange of Australia (NSX), bringing its new model to a larger regional audience. 

“This was a compliance listing and no funds were raised, but we are looking to an initial public offering in 12 to 24 months.

“The idea really is to quickly grow across key markets like Australia, Singapore, Malaysia and Indonesia and be on top of people’s mind as we prepare for Australian Securities Exchange listing in future,”  Goh explained.

With 11,000 registered users, the total value of deals listed on CoAssets is more than S$40 million since December, and the amount successfully funded currently stands at more than S$36 million. — TODAY