The fifth equity crowdfunding (ECF) operator to launch its platform in Malaysia, pitchIN has announced the first four issuers it will list on its platform, looking to raise an estimated MYR7 million ($1.73 million) collectively.
KRU Academy, a vocational college specialising in skills related to the creative industry and entrepreneurship, intends to raise MYR3 million to introduce a new faculty.
Aquaculture business Aqua Genesis is looking to raise a similar amount, as it grows its fish nursery, hatchery and fish distribution business.
KakiTangan, a free human resource system used by over a thousand companies in Malaysia, is targeting around MYR500,000 to MYR600,000 funds raised through pitchIN. The company has just launched its secure payroll system.
Public Bike Share, started by a group of avid cycling enthusiasts to create a culture of cycling for transport among Malaysians, may raise a similar amount as KakiTangan, pitchIN chief operating officer Naysan Munusamy said.
In addition to these issuers, baby food supplier Gastro Baby will also be listing on the ECF platform, but only after it runs a rewards crowdfunding campaign on pitchIN to validate its business idea.
Previously, alternative news portal KINIBIZ had sounded an interest to raise $470,000 on pitchIN, however, the news portal shut down in February.
The issuers will go live from mid-April, although the platform operator noted that Public Bike Share may only do so at the year-end, after signing some agreements.
“Rather than putting them up immediately, we are going to use about a month to talk to investors who could possibly become lead investors even before they go live. So when it’s open to the crowd, hopefully there are some names (of the lead investors) whom they are familiar, and they would know that not only has pitchIN done the due diligence on these issuers, but the lead investors as well,” chief executive officer Sam Shafie said of building confidence in the crowd for its issuers.
pitchIN has 11 lead investors on board, namely Segnel Ventures, Captii Ventures, Kosciuszko Holdings, VLT, Marna Capital, RHL Ventures, Nexea Angels, and Axiata Digital Innovation Fund (ADIF),and angel investors Azrul Reza Aziz, Dr Sivapalan Vivekarajah and Ben Lim.
Prior to introducing its ECF platform, pitchIN has already established itself as a rewards-based crowdfunding player since 2012. Its rewards crowdfunding platform has raised MYR300,000 raised for around 40 projects thus far.
Shafie said the company had always harboured a vision to launch its own ECF offering, calling it a natural progression in providing more alternative funding services to the Malaysian market.
He shared that pitchIN is aiming for eight to 10 issuances this year, offering investors a selection of issuers from varied industries.
“We don’t just list tech businesses, we are looking at any types of SMEs, even traditional businesses. We are quite sector agnostic,” he told reporters.
What makes the cut for businesses to raise on pitchIN’s ECF platform, Shafie said, is based on the capability of the entrepreneur, already generating revenue and a scalable business model.
“ECF is a long-term investment, investors can either exit through a trade sale or IPO. Although, there is also a possibility for a secondary market to trade in. We, the operators, are talking to the Securities Commssion (SC) but we are still figuring out this potential exit option, whether on our own or together,” he said.
A secondary platform will require the SC’s approval, and has been mentioned by several other operators in the market.
Currently, Malaysia has six licensed ECF operators, which Shafie believed to be a bit crowded.
“It’s a challenge, but I think what the SC wants to see is that the fittest will survive. The one who knows how the ecosystem works will survive, and I think we have a fighting chance, relying on our know-how. We’re have been here for a long time, we have always wanted to position pitchIN as an alternative funding fintech company,’ he said.
Shafie added that pitchIN may look towards other offerings as well, including peer-to-peer (P2P) lending, debt venture and debt equity.