Singapore-based crowdfunding platform CoAssets has listed on the National Stock Exchange of Australia (NSX), Australia’s second largest stock exchange, and will trade on the NSX under the symbol “CAX”.
The NSX is a secondary board in Australia and the second largest listing market in the country after the Australian Stock Exchange (ASX). 130 firms are listed on the NSX; approximately 80 per cent of new listings are foreign companies. The NSX listing of CoAssets will support growth and increase investment potential.
Launched in July 2013 as Southeast Asia’s first property crowdfunding platform by Seh Huan Kiat and Getty Goh, CoAssets crowdfunds residential and commercial properties in Asia, Australia, the UK and the US. It claims to have membership in excess of 11,000 individuals to date across Southeast Asia.
CoAssets primary function is to serve as a multi-sided platform linking developers, agents and property owners seeking alternative funding sources with investors keen on co-developing projects and co-purchasing property units.
CoAssets is also expanding service offerings this year to include peer-to-peer (P2P) lending for businesses outside of the real estate sector. This offering targets businesses looking for short-term trade financing of more than S$100,000 and can utilise CoAssets’ online platform for crowdfunding within a maximum period of one year.
The listing will raise capital and support expansion into other regional nations. “We are looking to grow our presence in Malaysia. We also have several potential partnership deals with companies in China and Indonesia. These are exciting markets to enter due to their large populations,” explained Seh, who serves as the CTO of CoAssets.
Australian IPO snapshot
According to the Surf’s up: 2015 IPO Report by Deloitte and Mergermarkets, 2014 was a robust year for Australian initial public offerings (IPOs), with A$26 billion equity listed through 74 floats, according to a snapshot of the IPO market. This is in comparison to 56 IPOs in 2013 which delivered equity of A$11.9 billion.
While early indicators suggest 2015 will be another strong year of Australian IPOs, with seven companies having already floated on the ASX in 1H 2015, returning 22.8% to investors as of the end of February 2015. According to the report, 2014 year-end IPOs delivered average returns of 17 percent, significantly outperforming the S&P/ASX200 index. These delivered overall returns of 1 percent.
In 2014, 42 IPOs reached a market capitalisation exceeding A$75 million and generated a combined market capitalisation of A$24.9 billion, compared to 27 IPOs with market capitalisations above $75 million in 2013 generating a combined market cap of A$10.9 billion.
Healthcare and financial services firms accounted for 59 percent of all 2014 IPOs, while energy and resources IPOs declined from 30 percent of total listings in 2013 to 14 percent of listings in 2014. For 2015, healthcare, technology and financial services sectors are predicted to remain the key performance leaders for IPOs.
However, despite this strong performance, Deloitte corporate finance partner Ian Turner has noted that “…under-performance of certain IPOs and re-pricing of others toward the back end of last year, does raise the question of whether the 2014 wave is sustainable.”
CoAssets down under
Commenting on the IPO, co-founder and CEO Getty Goh said, “Being globally recognised, the NSX listing boosts our plans for internationalising CoAssets. Listing on the Australian board also further supports our outreach to crowdfunders by providing us with more exposure to the market. The Australia property market has performed very well over many years now and crowdfunding for real estate is new in Australia.”
The property segment of the crowdfunding sector is a nascent vertical with significant growth prospects. The regulatory framework for the sector is still evolving, with significant growth opportunities present that can be capitalised upon.
Explaining the decision to list in Australia rather than their base of Singapore, Goh explained: “While Singapore has a good start-up ecosystem, more support is needed for certain growth stage companies. With the limited market size here, not many venture capital (VC) funds are in the one to two million dollar funding space, in comparison, the Australian stock market and investors are more receptive of technology businesses.”
Goh also added that the greater due diligence and auditing required across two countries was beneficial, saying “Stakeholders’ confidence is important for our business. The NSX regulatory obligations – two-year trading track record, minimum market capitalisation of A$500,000 (S$519,000) and a Nominated Adviser – are measures of our accountability to our customers and investors.”
Goh noted, “For example, our financial accounts are audited twice – in Singapore as well as in Australia, by two separate auditors. By subjecting ourselves to rigorous third party assessments, it demonstrates that we conduct our business with a high level of transparency.”
Expanded service offerings
CoAssets has already successfully funded pilot projects outside the real estate industry, as part of an expansion into the business financing segment (i.e. business crowndlending).
In June 2015, a short-term loan exceeding S$200,000 was crowdfunded on the platform by 36 investors for Social Media Enterprise. Pulse Tan, a director of Social Media Enterprise said, “The results from the P2P lending feature have exceeded our expectations. This is actually our first foray tapping onto the crowdfunding platform; we will definitely work with CoAssets again.”
CoAssets will also introduce a real estate project in Singapore by a local private developer for the first time in July 2015 – a cluster bungalow development located within the landed housing enclave of East Coast value in excess of S$30 million. The developer is targeting to raise S$500,000 via CoAssets’ platform to trial the alternative financing option.
“Projects that have been listed on CoAssets so far have been based overseas and we have worked mainly with foreign developers. With a limited duration of one year, Singapore-based real estate crowdfunding projects may appeal to those who are more conservative in their investment appetite. As this is the first Singapore real estate project, it will be interesting to see what the response for this project will be like,” said Goh.
2015, will also see CoAssets host EPIC (Expo for Property, Investment and Crowdfunding), an annual event kickstarted in 2014. EPIC 2015 will be held on 10th and 11th July, at Marriott Hotel, Singapore.