Singapore-based crowdfinancing platform MoolahSense mobilised $1-million fundraise, a feat it achieved in less than 48 hours, for Apple products reseller EpiCentre Pte Ltd, an unit of Catalist-listed Epicentre Holdings.
Money has just one colour, MoolahSense CEO Lawrence Yong told DEALSTREETASIA, when asked on why an unit of a listed entity chose the crowdfunding platform as opposed to other financing routes.
EpiCentre on Monday launched two fundraising campaigns, totaling $1 million, to generate funds for procuring inventory and meet general expenses. The two campaigns reached their target in less than 26 hours, said Yong. 330 investors came online to participate.
Yong said, EpiCentre is the first listed company to campaign on MoolahSense, a peer to peer lending platform, and that the online startup is “in discussions” with a few other listed firms.
“What we offer is just another … round of financing,” he said. “There are few benefits that we can provide (like) availability of short-term financing, and also, the speed in putting all these together.”
“Of course, right now, it seems a bit new, but I think, in time, it will become another avenue or channel for companies to be financed, just like what happened in e-commerce,” he continued.
Launched in 2014, there are close to 4,500 investors on MoolahSense. Yong added that registered investors pass through a proper verification process. Whenever a campaign goes live, MoolahSense sends an investor-wide email about the campaign and attract investor interest.
How does it work
At the end of the loan period, EpiCentre is required to repay the amount borrowed along with a 13.5 per cent interest per annum.
“There are many bank products,” said Yong, when asked why would a listed company come to a crowdfunding platform when it can access a bank loan.
Banks often provide secured loans whereas a peer-to-peer platform like MoolahSense is often unsecured, he added.
Furthermore, the funding is not always guaranteed. “In a financial institution, only if credit officer approves does the bank provides the credit. Over here, the funding is crowdsourced and it’s up to each member (to lend). That would be the risk.”
For EpiCentre’s loan, for example, once the note is funded, the amount will be disbursed the next day, according to Yong.
In a statement to The Edge, Yong said, banks sometimes adjust their credit portfolio to adapt to changes in the market. If and when tightened, this could affect companies receiving loans.
Impact on the industry
For Yong, having a listed company crowdfund on MoolahSense ” is a validation that this is a viable means of raising finance.”
“Secondly, it also shows that there is demand or interest on both the issuer and lender’s sides to support this type of campaign,” he added.
On Thursday, EpiCentre launched a third campaign to raise another $500,000, and is said to have plans to secure “up to $2 million”, according to the report.