SINGAPORE: Homegrown crowdfunding platform CoAssets made its debut on the Australian Securities Exchange (ASX) on Monday (Sep 5), becoming the first of its kind to go public in Australia.
CoAssets, which was previously listed on the National Stock Exchange of Australia (NSX) in 2015, raised S$6.72 million from its public offer of shares at S$0.41 per share. The listing builds upon an initial S$4.8 million raised from other private placements, allowing the company to raise more than S$10 million over the past 12 months.
At the offer price, CoAssets, which describes itself as one of Southeast Asia's largest crowdfunding platforms, is estimated to have a market capitalisation of S$67.73 million.
Co-founder and chief executive Getty Goh told Channel NewsAsia that the move from Australia’s secondary board to the main ASX board was about taking “the company to the next level” amid growing demand for alternative capital-raising methods in the region.
“Getting listed has done us very well because the cost of capital from the market is much cheaper,” the 38-year-old entrepreneur said. “If we had gone to a private equity, the cost of capital would have definitely been much more expensive so from a responsible stakeholder standpoint, moving to the main board was something that is good and positive.”
While the team did consider a listing back home, they eventually decided to remain in Australia due to the ASX’s track record of listing tech start-ups.
“We did consider Singapore but all things considered, the Australian market has a precedent of tech companies doing well,” said Mr Goh, raising the example of Malaysia’s iProperty Group which was acquired by its Australian counterpart REA Group for more than S$700 million in February.
“As much as I would love to list in Singapore, unfortunately, there is no such precedent, and so I thought a listing in Australia would make more sense for us.”
Australia has long been favoured by tech start-ups in the region as a place to list, due largely to factors such as lower listing fees and the presence of an investor community that appears to be more savvy and receptive to technology stocks. Even as regulators Down Under mull stricter rules for early-stage technology firms, Mr Goh said he believes that Australia will likely remain a hotspot for technology listings.
“Clearly, investors in Australia support and understand tech, and they want to be involved in tech investments. The regulator wants to make sure that the quality of investments that go through the door are of a certain standard. I don’t see these two as being mutually exclusive.
“If anything, I think the industry will become even more vibrant because only the good companies can get through the door now, and that will help investor confidence. So I see it as a positive reinforcing loop and activity in the stock market, specifically in the tech sector, will pick up,” Mr Goh said.
A screengrab of CoAssets' website
“WE WANT TO BE THE ONE-STOP SHOP FOR CROWDFUNDING”
Since its launch in 2013, CoAssets, which connects investors to companies seeking alternative financing via its online platform, has crowdfunded more than S$45 million for over 75 business projects in Asia, with an average return of between 7 to 15 per cent per annum.
For 2016, the company’s full-year unaudited revenue surged to S$2.182 million, up a cool 167 per cent from the previous year’s S$816,411. CoAssets also managed to raise more than S$11 billion from undisclosed investors, according to Mr Goh, which he attributes to not just a strong investment interest in the Singapore-based firm but also the speed at which the crowdfunding trend in Asia is gathering pace.
Some growth-boosters for CoAssets come in the form of a growing acceptance among investors and companies in this part of the world, said Mr Goh. In particular, Asian governments such as Malaysia, China and South Korea have grown to acknowledge crowdfunding, which pools funds from a large number of investors via the internet, as a legitimate fund-raising method. Others such as Australia are considering the enactment of legislation to improve the environment for investment crowdfunding.
And Mr Goh sees further growth opportunities amid weak economic sentiment regionally.
“Businesses right now are in need of funds, but banks have limited or restricted lending due to their cautious market outlook,” he said, adding that it is important to note that companies that have failed to obtain loans from traditional lenders may not necessarily be non-performing companies.
“This gives us the window of opportunity to cherry-pick these good companies,” he added.
To tap on these opportunities, the homegrown firm has branched out from its initial specialisation of real estate crowdfunding to work with businesses, mainly small and medium-sized enterprises (SMEs), from other sectors looking to fill the S$100,000 to S$5 million funding gap.
“We have broadened our offerings and I think this is a natural progression,” Mr Goh said. “Just like how banks offer all forms of mortgages and loans, we feel that in the long run, we want to be the one-stop shop for crowdfunding shop.”
Moving forward, it is also eyeing continued expansion geographically such as Malaysia where it is awaiting the results for its application for a debt crowdfunding license. It is also hoping to add Indonesia into its operating markets in the near term.
Even in China – a market that Mr Goh previously had concerns about due to stiff competition – the company is now raring to go following its first step into the southeastern city of Fuzhou late last year.
Thus far, CoAssets has crowdfunded several mainland projects within the highly-competitive country and response has been “very positive”, he said.
“We have a very good partnership with Linca Group who is also our cornerstone investor in this IPO. Through them, we have access to the Chinese market and that’s why we are not only excited to offer them our technological abilities but work with them as a partner in China,” Mr Goh said.