Five Successful ECF Campaigns in Malaysia

According to the statistics from Securities Commission Malaysia (SC), Malaysia's equity crowdfunding (ECF) platform had raised a total of RM38.36 million since its inception in 2015 (until June 2018) through 40 campaigns.

Among the key take away from the statistic was:

• 48% sought funding of RM500k and below
• 60% of the issuer was technology-based companies
• 72% of investors are below the age of 45

However, many investors don't have an idea of what sort of companies will be in an ECF platform and if you're curious to know some of them, we believe this article will help you to have a glimpse of them. Here you go...

Below are the 5 companies that catches our eyes:

1. Parenthood via Crowdo
   ^ Malaysia's 1st London Street Family Park is the ultimate venue to seek modern-day parenting amenities, services, products & enriching experiences for parents & children
   ^ Opened to public at Sunway Putra Mall and Sunway Pyramid Mall
   ^ Crowdo's first successful ECF offer in Malaysia
   ^ First South East Asia’s non-tech ECF issuer
   
   
   
   
   
2. Kakitangan.com via PitchIn
   ^ The fastest ECF campaign in Malaysia to raised their first RM1mil in just 24 hours (at that time)
   ^ Raised from a record of 63 investors (Sept 2016)
   ^ An online HR Software for Malaysian businesses that helps handle payroll, claims, benefits, leave and more...
   
   
   
   
3. Lewré via AtaPlus
   ^ Founded by renowned designer and couturier, Dato’ Lewré Lew Fong Voon, in 1997
   ^ RM1.2mil raised for the homegrown brand
   ^ Had designed footwear for Kate Middleton, Duchess of York, and members of the Malaysian Royal Family
   
   
   
   
   
   
4. BabyDash via PitchIn
   ^ Becoming the ECF record breaker by attracting 131 investors and raised RM1.5mil
   ^ Breaking the previous record achieved by Kakitangan.com
   ^ Malaysian online baby store founded by two mums looking for convenient way to purchase diapers and milks @@!
   
   
   
   
5. Fundaztic via PitchIn
   ^ Fastest ever funded ECF deal in Malaysia (as at Oct 2018)
   ^ RM3mil raised in 38 minutes !!!
   ^ The homegrown P2P operator brand from PeopleLender Sdn Bhd
   ^ The first P2P crowdfunding platform raising funds from another crowdfunding ECF platform

Of course, this is just a few successful examples from us. There are more than this five companies that raised funds via ECF platforms. Hopefully, we can write about more companies in the future.

In case you missed out our previous article on ECF, please click here:

[Crowdfunding] What is Equity Crowd Funding (ECF)?

[ECF] Knowing all the SC approved ECF operators

Stay tuned!

[ECF] Knowing all the SC approved ECF operators (Updated in March 2019)

After understanding how and why Equity Crowd Funding (ECF) existed nowadays (click here to read our previous ECF article), let's move on knowing all the approved ECF operators in Malaysia now.

Below is the intro of SC approved ECF operators (as at end Mar 2019):

1. Ata Plus Sdn Bhd (www.ata-plus.com)
   * Founded by 3 persons whom came from different background
   * Believe that matching capital with exciting businesses has a far reaching productive social and economical outcomes
   * The world's First Blockchain Enhanced Licensed Equity Crowdfunding Platform
   
   
   

   
   
2. Crowdo Malaysia Sdn Bhd (www.crowdo.com)
   * A regional fintech company offering a full portfolio of P2P and ECF solutions
   * Although Crowdo don't have P2P license in Malaysia, the company is an active P2P player in Indonesia
   * Launched in 2013, Crowdo is one of the region's largest and fastest growing platforms with over 38,000 members, 3500+ projects, and market presence in Singapore, Indonesia and Malaysia
   
   
   
   
   
3. Eureeca SEA Sdn Bhd (www.eureeca.com)
   * Dubbed as the first Global equity crowdfunding platform
   * Launched in 2013, Eureeca has presence in UK, Netherlands, Dubai and in Malaysia (2015)
   * With 18,000-strong investor network
   
   
   
   
   
   
4. FBM Crowdtech Sdn Bhd (www.fundedbyme.com)
   * Founded by a group of Swedish
   * Have been shaping the crowdfunding industry since 2011
   * Up-to-date, the platform already successfully raised EUR 55,064,050 and with 250,000+ registered members
   
   
   

   

   
   
5. Pitch Platforms Sdn Bhd (www.equity.pitchin.my)
   * Described as Malaysia's national crowdfunding platform
   * Since inception in 2012, the pitchIN rewards venture has become the most successful rewards crowdfunding platform in South East Asia
   * It holds records for projects that raised the most funds and for the most number of backers for a single project
   
   
   
   
   
6. Crowdplus Sdn Bhd (www.crowdplus.asia)
   * Backed by Netrove Ventures Group, a regional tech-based venture capital firm
   * Leveraging on a tried and tested deal sourcing and selection process that will enhance the quality of deals presented to the crowd
   * Launches the unique "QMI" feature that will bring to play qualified mentors and investors across the region to achieve greater value creation and enhance success for companies funded
   
   
   
   
7. Fundnel Malaysia (www.fundnel.com)
   * Headquartered in Singapore with a growing presence in 6 countries across Asia Pacific
   * Using proprietary Artificial Intelligence-driven deal screening process, that analyses >50 parameters per company
   * Global network of >10,000 investors

FIVE Key Take Away from 2018 KRI Report

It created abit of hoo-haa in Malaysia since the published of the latest research report by Khazanah Research Institute titled "The State of Households 2018 : Different Realities" on 15 Oct 2018.

With 200+ pages, I believe most of us won't go through it. Let us take you straight to the main key take away (in which we think that it's good for all of us to know) here. ✌👀

#1 : Real residual household income

Figure above shows the residual household incomes of the different income classes. Worryingly, for households earning below RM2,000, the income remaining after accounting for inflation (i.e. real residual income) is only RM76 in 2016, reducing from RM124 in 2014. This highlights that households earning below RM2,000 are potentially very vulnerable against any economic shocks or emergencies.

Meanwhile, households earning above RM15,000, who had RM13,100 remaining in 2016, decreasing from RM14,458 in 2014. Important to note, however, residual household income still includes income to be paid as tax and compulsory social security schemes.

#2 : Growth in real income (annualized)

Always complaining that the rich is getting richer, and the poor is getting poorer? But, the above figure shows that the poorer income group is getting the highest real income growth for the past few years.

The only period in which the top 20% households experienced higher annual income growth than the other two groups was between 1987 and 1997. Huh? Is this a good news to B40 group?

#3 : Levels of Public Expenditure on Education

Throughout this period, education spending has consistently made up between 18% to 26% of total current government expenditure. Nonetheless, compared to other countries, Malaysian government spending on education when normalised by the number of students is still relatively low.

More and more government spending, but the proportion towards education is getting lesser as relative to other expenditure.

#4 : Future trends and challenges

Malaysia should now focus on in its journey towards becoming an advanced economy. However, various global and domestic trends — ranging from technological disruptions, changes in the global economic landscape and biosphere to demographic changes in the Malaysian society and lower returns from past growth strategies — pose a challenge to Malaysia’s economy and the well-being of its people.

#5 : Beating the Middle-Income Trap

Beating the middle-income trap is rare. Those countries that managed to move from stage 2 to stage 3 have developed large multinational companies (MNCs). Can Malaysia do so and escape the trap? And, how many more years do we have to wait?

Source: Khazanah Research Institute 2018 research report "The State of Households 2018 : Different Realities"

What Triggered the latest Global Market Sell-Off ???

It was not a good day to starts with on 10 Oct 2018, where US stocks suffered their worst fall since early February. The turbulence in US stock markets triggered another sell-off in Asia the following day, with the MSCI Asia ex-Japan falling to a 19-month low.

The sell-off hit broader equity markets in Asia – bourses in Taiwan, South Korea, and China registered deep losses. Of course, Malaysia could not shield itself from this slump either.

Why Global Market Sell-Off ???

• Rising bond yields
  The highlight here is on the yield of 10-year US Treasuries, which have surged from 2.8% at the end of August to as high as 3.2% earlier this week. The higher bond yield was said to have a knock-on effect on the so-called “real economy” because it was the benchmark of interest rate in the US. Higher financing costs may prevail due to this.
  

• Global economy slowdown
  Then, thanks to the International Monetary Fund (IMF) which painted a gloomy outlook for the world's GDP growth at 3.7%, down from its April estimate of 3.9%.
  
  
• Escalating US-China trade war
  Not a news anymore, but the fighting between the two of the world largest economy would only derail the world's growth. No one will win either.
  
  
• Spiking crude oil prices
  When crude oil prices rally to above US$70/bbl currently, it stokes up the inflation fears among central bankers to raise the interest rate to contain it. Raising interest rate is not a big deal, but hiking it too fast over a short period of time doesn't bode well to the economy.

Some of the WORST crashes happened in the month of September & October:

• Sept, 1869 – Within minutes, the inflated gold prices plummeted 20% from $160 to $133, dragging down the stock market altogether with it. 
  
  
• Sept, 1873 – The starts of the "Panic of 1873" that triggered the first 'Great Depression' in the United States and abroad.
  
  
• Oct, 1907 – A bust in the speculative run of copper affected banks in the US, leading to the stock market dropping 50%.
  
  
• Oct, 1929 – Known as The Wall Street Crash in US
  
  
• Oct, 1987 – Dow Jones fell 22.6%, the worst daily loss in its history, labeled as Black Monday
  
  
• Oct, 1997 – Dow Jones crashed caused by the Asian or Tom Yum Goong crisis.
  
  
• Oct, 2002 – The month when NASDAQ hit the bottom from the famous ‘dotcom’ bubble burst in 2000, and from Sept 11, 2001 attacks on the world trade center twin towers
  
  
• Sept, 2008 – Collapsed of the big brother - Lehman Brothers, then the collapsed of world markets as a result
  
  
• Oct, 2018 - ???

We still have another 2.5 weeks to go before ending this concerning October. Would it be another crash of the history? Let's wait and see...

[Crowdfunding] What is Equity Crowd Funding (ECF)?

As promised, in this month of October, we will be writing about Equity Crowd Funding (ECF). Another crowd funding method which aspiring new start up entrepreneurs can source for their business funding during initial stages. The ECF platforms provide an alternative venue for capital-raising to SMEs and innovative new businesses.

Proudly to tell you that Malaysia is the first country in ASEAN to introduce a regulatory framework to facilitate equity crowdfunding in 2015, with six registered equity crowdfunding (ECF) platform operators was fully operationalise since 2016. Good job to Securities Commission of Malaysia.

Get to know more here... ⏬⏬⏬

What's in it for SME and start-up companies?

• An alternative source of funding and quicker access to capital at a lower cost compared to traditional banks products
• An opportunity for start-ups and SMEs to harness the power of the crowd on the internet to raise funding
• Start-ups and SMEs can also gauge market reception of their proposed product and/or services from response received on the ECF platform
• And, it's a free advertising also for the companies via social medias to be promoted by ECF operators

What's in it for general public as an investor?

• Become a shareholder of a SME and new start-up by owning some shares
• Diversify their investments beyond the traditional asset classes
• Investors can take up the investment block they are comfortable with
• Access to asset class which only available to high-net worth individuals previously

Trust Account ?
Yes. Similar to P2P lending, all approved ECF platforms must have a dedicated trust account (operated by public trustee) for each of the issuer company. Monies obtained from investors are placed in a third party trust account until the appropriate disbursements are required to be made. All of the transaction was recorded in trust account to protect the interest of the investors and a certificate of ownership will be issued to all investors. This effectively avoid the misappropriation of investors' monies by ECF operators.

List of Approved ECF Operators as at May 2019:

1. Ata Plus Sdn Bhd (www.ata-plus.com)
2. Crowdo Malaysia Sdn Bhd (www.crowdo.com)
3. Eureeca SEA Sdn Bhd (www.eureeca.com)
4. FBM Crowdtech Sdn Bhd (www.fundedbyme.com)
5. Pitch Platforms Sdn Bhd (www.equity.pitchin.my)
6. Crowdplus Sdn Bhd (www.crowdplus.asia)
7. Funnel Technologies Sdn Bhd (www.fundnel.com)
8. 1337 Ventures Sdn Bhd 
9. Ethis Ventures Sdn Bhd
10. MyStartr Sdn Bhd 

In our next article, we will blog about each of these ECF platforms in Malaysia. Stay tune!