The global digital technological revolution which is leading humanity towards Industry 4.0 has taken place at a most opportune time for Southeast Asia (SEA). As a region which is undergoing rapid economic development, the developing economies in SEA have ample room to accommodate the onboarding of the global digital technological revolution. According to statistics collected by global management consulting firm Bain & Company, the amount of equity capital invested in Southeast Asian technology-based companies rose from 20% in 2014 to 40% in 2017. 

In terms of big name market players, SEA has since 2012 given birth to 10 unicorns (i.e. private startups which has a financial valuation of more than US$10 billion) with a combined market value of more than US$34 billion. The top two largest unicorns in SEA are Grab and Gojek which is located in Singapore and Indonesia respectively. With SEA’s top two largest unicorns being startups which leverage mobile applications for the provision of ride-hailing services, the funding prospects for technology-based startups in the region is shining bright indeed. Moving forward, the prospects for SEA’s venture capital market, in general, is looking even brighter with the region projected to give birth to at least another 10 new unicorns by 2024.

Pitching In towards Malaysia’s Crowdfunding Space

When it comes to the crowdfunding space in SEA, a name which rings a bell with most industry players is that of Malaysia-based pitchIN. Although Malaysia only played host to US$6 billion worth of equity in venture capital investments as of December 2018 in contrast with Singapore which venture capital equity volume stood at US$19.2 billion as of the same date, Malaysia is slowly but surely catching up with its neighbouring island nation. Who else would be more suitable to lead Malaysia’s charge in this connection than pitchIN which has often been described as the country’s national crowdfunding platform?

The track record of pitchIN speaks for itself. In 2017, pitchIN became Malaysia’s top equity crowdfunding (ECF) platform by recording an all-impressive 100% success rate involving 12 deals over the course of that year resulting in pitchIN holding a majority market share of 60%. In the following year, pitchIN upped the ante even further by increasing its market share to three-quarters (i.e. 75%) of the ECF market in Malaysia in addition to maintaining its 100% success rate. Throughout the course of achieving its success, pitchIN has established an extensive industry network encompassing the startup community in Malaysia as well as a close working relationship with the country’s regulators and government agencies. Prospective investors can rest assured with regard to the integrity of pitchIN’s business model and the accountability of its ECF platform as it is approved by the Malaysian Securities Commission (SC) to operate as a Recognized Market Operator (RMO) in the country. 

With regard to pitchIN’s business model, it is based on the ECF framework which offers individuals the opportunity to invest in companies which are in the early stages of development in return for a direct equity stake in the company. Under an ECF investment structure, entrepreneurs would offer a slice of their company’s equity for a set period of time. Individuals who are confident with the growth prospects of the company can subscribe for the size of investment block which they are comfortable with. Upon the completion of the exercise, the investor is registered as a shareholder of the company with all the associated rights and benefits. The use by pitchIN of the rewards-based ECF model has enabled it to capitalize on Malaysia’s growing startup scene to become the country’s leading crowdfunding platform but the best may have yet to come.

With the Malaysian government having made clear its intention to undertake its national digital transformation agenda, the innovative use of digital technologies such as blockchain is likely to feature prominently in the country’s startup segment. Given its experience in facilitating funding rounds for notable local blockchain companies such as LuxTag, EPC Blockchain (BESC), Orygene and Finterra, pitchIN is in pole position to be the platform of choice for future technology-related fundraising exercises in Malaysia. As an extra boost for the future prospects of pitchIN, it has expanded the financing options for investors in December 2019 by accepting Bitcoin and NEM Tokens for fundraising campaigns hosted on its platform. 

pitchIN: The Way to Go for Prospective Crowdfunding Investors

pitchIN has come a long way since it was first established in 2012. Fast forward to 2019, pitchIN’s impressive business credentials and wide financing options render it to be the prime crowdfunding platform for those who are looking to cash in on the government’s drive for digital transformation by venturing into Malaysia’s startup scene.

References:

1. Bain & Company, Investing in Southeast Asia: What’s Behind the Boom (13 November 2018). Accessible at https://www.bain.com/insights/investing-in-southeast-asia-whats-behind-the-boom/
2. Preqin, Markets in Focus: Private Equity & Venture Capital in Southeast Asia (September 2019). Accessible at https://docs.preqin.com/reports/Preqin-Markets-in-Focus-Private-Equity-and-Venture-Capital-in-Southeast-Asia-2019.pdf
3. pitchIN, Equity Crowdfunding Report 2018. Accessible at https://res.cloudinary.com/watchtowerandfriends/image/upload/v1547560967/pitchin-ecf/miscs/2018_PITCHIN_EQUITY_CROWDFUNDING_REPORT.pdf
4. pithchIN, About pitchIN. Accessible at https://equity.pitchin.my/about-pitchin
5. pitchIN, What is ECF?. Accessible at https://equity.pitchin.my/equity-crowdfunding#angel-tax-incentive
6. The Star, PitchIn Accepts Bitcoin, In Addition to Fiat Currency, for ECF campaigns. Accessible at https://www.thestar.com.my/tech/tech-news/2019/12/10/pitchin-accepts-bitcoin-in-addition-to-fiat-currency-for-ecf-campaigns

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