11 June 2015

Crowdonomic becomes registered e-facility for equity crowdfunding in Malaysia

Source: Crowdonomic. Crowdonomic was one of just a few operators approved as a Registered Electronic Facility (Equity Crowdfunding Platform) by Malaysia's Securities Commission. From left: Nicola Castelnuovo, Co-founder and Chief Commercial Officer of Crowdonomic; Datuk Ranjit Ajit Singh, Chairman, Securities Commission Malaysia and Leo Shimada, Co-Founder and Chief Executive Officer of Crowdonomic.

Crowdonomic, one of the largest crowdfunding platforms in Southeast Asia, was today named by Securities Commission Malaysia (SC) as a registered electronic facility to pioneer and build the equity crowdfunding (ECF) platform in Malaysia. With its track record, regional presence, and experienced team, Crowdonomic is positioned to offer a strong combination of international market access, quality deal flow, and financial expertise.

Crowdonomic was one of only a few conventional operators to be approved as a Registered Electronic Facility (Equity Crowdfunding Platform) by SC Chairman Datuk Ranjit Ajit Singh on the first day of SC’s Synergy & Crowdfunding Forum (SCxSC) 2015.

“The registration is the high point of our continued constructive engagement with regulators to help shape competitive crowdfunding policies and build fully compliant and professional businesses in the markets we operate in. Our collaborative approach distinguishes us from many self-proclaimed crowdfunding platforms currently operating in grey areas,” said Leo Shimada, Co-Founder and Chief Executive Officer of Crowdonomic.

Together with the registration of electronic facilities, SC is introducing guidelines and rules to enhance investor protection, establish clear disclosure rules, and clarify fundraising rules for businesses seeking financing. The Malaysian regulations adopt an inclusive approach allowing any type of investor to participate in offers with investment caps set for protection purposes. The framework is unique as it will allow businesses to raise up to RM3 million within a 12-month span, and also allow investment funds to raise unlimited amounts off the platform.

Equity crowdfunding is widely seen as an enabler for startups to flourish and further develop their innovations. There is huge potential in Malaysia where there are more than 600,000 SMEs* - comprising more than 90% of total businesses in the country. Startups are also seen to lead the way in innovation, with research** indicating that many believe smaller businesses are the ones driving innovation in Malaysia.

Shimada also said the rise of equity crowdfunding signifies the birth of a new asset class. “Equity crowdfunding is revolutionary, as it allows businesses, for the first time, to leverage the full power of social media and technology to efficiently raise capital. This is particularly important as Malaysians are known*** to be among the most active on social media on a global scale. Startups will become more empowered to efficiently raise capital and investors can now transparently access new investment opportunities,” Shimada explained.

To maximise the impact of equity crowdfunding in Malaysia, Crowdonomic is at advanced stages of forming an alliance of top-tier players across the corporate, venture capital, financial institution and entrepreneurial ecosystem. This approach further differentiates Crowdonomic from other operators which lean towards operating as standalone websites.

“We are keen to explore opportunities with everyone interested in the potential of equity crowdfunding. We are in discussions with multiple parties in Malaysia and the region and we welcome opportunities to speak to more people. When it comes to equity crowdfunding, we are not content to just copy the Western model. Instead, we will be proactively paving the way to shape a unique Malaysian model. Most assuredly, we look forward to helping stimulate the economy in Malaysia as well as pioneer this space across Asia,” Shimada said.

*SME Corporation
**GE's 2014 Global Innovation Barometer
***TNS’ Connective Life 2014 study