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Cultivating a crowdfunding culture in Singapore

12 projects were recently launched on local telco, StarHub's new crowdfunding site, Crowdtivate, and have collectively raised almost S$19,000 so far. However, analysts say the relatively new concept will take time to gain support.

SINGAPORE: Hong Kong-based startup Ambi Labs is one of 12 startups to put their products up for funding on StarHub's new crowdfunding site Crowdtivate. It has raised more than S$11,000 for the production of its project, Ambi Climate. The smart device learns about the users' indoor climate preferences, and adjusts the air conditioning settings accordingly.

It's now at early stages of production, and Ambi Labs says rewards-based crowdfunding, where a sample of the product is sent to the investor, helps to enhance its customer reach.

Mr Julian Lee, CEO of Ambi Labs said: "If we put these in stores and sold them to consumers directly, there's always a risk that they won't understand what it is that we're doing. But crowdfunding backers are willing to support a product that they know isn't quite ready for mass production but they're excited by the technology. These beta units are currently already in production. They'll be shipping by end-September, and through the feedback we get from these testers, we want to further improve the product, and start mass production."

StarHub says the twelve were chosen from 400 applicants, and its selective approach helps to ensure the quality of the projects. "We want to ensure that the projects that come on board are of a certain level of standard. When we curate, we meet up with the project owners and communicate and engage them quite often, getting to understand them better prior to us helping them to build their campaigns and come on to the platform," said Mr Stephen Lee, Head of i3 (Innovation, Investment, Incubation) at StarHub.

Crowdsourcing as a means to raise funds has somewhat taken off in the West in the past year since the current concept was pioneered around 2008. Analysts, however, say the concept of crowdfunding is still in its infancy in Singapore, and that it may take a while to gain support.

Mr Chandan Joshi, Partner at Oliver Wyman, shared his thoughts: "When it comes to Asia, the concept of crowdfunding is very new and visionary. It also might require some business model innovations. For example, a purely rewards based crowdfunding model, which is the name of the game today, in the future might give way to equity-based models, which may be more in line with the investor expectation of returns in Asia."

Crowdfunding is estimated to have raised about US$5 billion worldwide last year according to statistics database, Statista, and it is expected to almost double in 2014. 

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