The Lion City Roaring: Is Singapore leading the way in Asia with crowdfunding innovation?
By Crowdfund Vibe Staff Writers
Crowdfunding is more developed in Europe, North America & Australia/NZ, than it is in Asian countries. This situation is changing rapidly in Singapore. Crowdfunding activity has ramped up significantly in the Lion City over the past 12 months.
Like many parts of the world, various overseas crowdfunding platforms such as Kickstarter and Indiegogo have been available to residents of Singapore for some years. More recently they have been joined by the Australian-based global platform Pozible. Indiegogo has upgraded its service to support funding in the local currency which has enhanced its appeal.
There has also been a flurry of new Singaporean crowdfunding platforms together with some notable fundraisings. The Singaporean public is starting to take a keen interest in this new business concept. It would seem Singapore may now be the trend-setter in Asian crowdfunding.
To illustrate this growing interest there have been a number of notable crowdfunding campaigns in Singapore over the past year.
On Kickstarter Singapore firm Pirate3D passed its original goal of US$100,000 within the first 10 minutes for its Buccaneer desktop 3D printer. It eventually raised US$1.44 million. They started shipping their first printers to their backers in January this year with the last batch going out in April. The printers are now on sale to the public.
- Another, Project Silverline, sought to improve the lifestyle of senior citizens with reconditioned smart-phones. It developed a range of apps to enhance the social, emotional and physical needs of Singapore’s elderly population, and provide assistance within the quickest time possible. This campaign also hit its goals quickly and raised a total sum of US$54,001 on Indiegogo by the end of the campaign.
- Earlier this year Earth Hour, the WWF global community environmental event, partnered Singapore platform Crowdonomic to raise funds for a portfolio of global environmental projects. A number of the funding goals were ambitious. Interestingly, and despite the pulling power of the Earth Hour brand, only one of these was fully funded, which seems to show that Asian-based platforms still have a long way to go before they can mobilise high levels of global funding.
Putting this aside, the city-state’s leading crowdfunding platform, Crowdonomic reported through the Business Times late last year that money raised by Singapore-based rewards crowdfunding was doubling on a monthly basis since its founding in January 2013. This is consistent with worldwide trends. There are also a number of niche platforms emerging which are using crowdfunding in some interesting ways.
New Crowdfunding Platforms
Crowdtivate, a platform recently set up by Singapore’s second-largest telco StarHub, aims to help Asia-based entrepreneurs. Through it they aim to tap into a continuous source of innovative and creative ideas from local inventors, and help them grow as a future business or incorporate them into StarHub’s service platforms. It is an invitation only website, so entrepreneurs have to be screened before they can crowdfund through it.
CoAssets is South East Asia’s first real estate crowdfunding platform. With over S$6.7M invested since it started in May 2013 and more than 2500 registered investors, it has had 15 successfully funded projects. It is currently listing property investment opportunities in Singapore, Malaysia, Hong Kong, Vietnam, Australia and New Zealand.
Billed as the ‘Kickstarter for authors’, Publishizer is a crowdfunding platform that solicits pre-orders for books from the community to gauge demand for an author’s work. It works by pre-selling books through a crowdfunding campaign. Publishizer was the winner of the Singapore Echelon Satellite for 2014. It most successful campaign to date has been for Scott Bales’ book Mobile Ready which raised US$28,865, well over its goal of US$10,000 and nearly four times the previous campaign record on the site.
Reflecting the shopping tradition of the Lion City, there are two platforms that focus upon crowdfunded retail products. CliqueFund sells crowdfunded products sourced from social enterprises based in Singapore. It aim is to to promote these to a wide audience. Another platform Haystakt has just entered the crowdfunding market and added a twist. It bills itself as the world’s first crowd-pricing platform which helps makers commercialise their creative products at crowd-determined prices. Their system works like a traditional all-or-nothing crowdfunding, although it differs in that a project’s price drops with every order made after the minimum order goal has been hit, according to a pre-established price curve set by the project maker.
There is no law in Singapore that permits or prohibits equity crowdfunding. It is not completely clear whether this form of fund raising does in fact violate the Singapore Securities & Futures Act. Indeed the Singapore Finance Authority appears to exempt offerings of up to S$5m (US$3.9m) within a 12-month period as long as they are not advertised.
Perhaps conservatively, Singapore based crowdfunding platforms do not permit fundraising for investments to avoid the risk that equity-based crowdfunding could trigger an “offer of securities”, which must then comply with the regulations under that Act. To provide clarity, the Singapore Government announced in its Budget earlier this year that it was looking to establish a suitable regulatory framework for equity crowdfunding. This would be the first in Asia.
Crowdonomic is interested in equity crowdfunding. It is now focusing on rewards-based funding for medium to large companies. It is adding new social features and tools to its platform whilst looking ahead to the full legalisation of equity crowdfunding. Co-founder Leo Shimada says they are working with regulators to help them shape suitable crowdfunding regulations.
Swedish-based platform FundedByMe, a major European business-focused crowdfunding platform that also supports equity crowdfunding, set up in Singapore earlier this year. It chose the city as its first Asian hub because of it’s status as a financial centre, the stability of the government and its high usage of social media and technology. Founder Daniel Daboczy has stated that “the next step will be to get an exemption, but our model works with or without [it].” At this stage FundedByMe is working to attract Asian based investors to European companies listed on its platform. Down the track it will aim to bring early-stage Asian companies to an international audience.
Nicola Castelnuovo, the other co-founder of Crowdonomic, believes that “a lot of education still needs to be done in Asia to explain crowdfunding to the professionals and the companies.” That doesn’t appear to be holding back a lot of interesting crowdfunding activity in this advanced South East Asian nation. Drawing upon its high level of technological literacy, advanced start-up networks and well-accepted online payments systems, Singapore does seem to be leading the way with crowdfunding in Asia.