I had first founded a digital marketing firm, Alix Global, in 2014, which was later granted a license by the Securities Commission Malaysia to operate as an equity crowdfunding platform. We then joint-ventured with the Swedish equity crowdfunding platform, FundedByMe, which has 250,000 registered international investors and sophisticated technical knowhow. The joint venture entity then became FundedByMe Malaysia.
In order to provide a new and comprehensive SME financing marketplace for Malaysian companies and global investors, we continued to apply P2P financing license, receiving it in 2016. This made us the only company currently licensed to operate both equity crowdfunding and P2P financing. We built a new platform, AlixCo, that mainly operates P2P financing.
How does the FinTech scene in Europe compare with Malaysia?
The market in Europe in terms of FinTech start-ups and investors is matured and ready. Generally, Europeans, from graduated students to elderly people, are mostly well educated or understand what is FinTech, how it works, and how to invest or raise funds through the mechanism. This is also due to the technological readiness ranking of the countries, where they are more open and technology-savvy compared with Malaysia.
We foresee higher adoption rate of P2P financing in Malaysia, both for issuers and investors. The financing gap of Malaysian companies is believed at around MYR80 billion, according to some sources. Early stage SMEs, for example micro-size or newly formed businesses, to macro size or high-growth, well established businesses, and conventional businesses to tech companies will be using P2P financing as one of the alternative financing methods in raising their working capital. Also, underserved or unserved sectors like start-ups, young companies, micro financing, womenrun enterprise (basically those with low finance track records), who are unlikely to access conventional financing provided by financial institutions, will find P2P financing platforms an alternate option of getting capital to develop their businesses.
When there are more and more companies able to survive at the early stage (first three to five years), it also means that there are more jobs and more opportunities for people. P2P financing is not just FinTech-related, where FinTech companies like us benefit from the trend and opportunities – it is the transformation and democratisation of the financing ecosystem for both borrowers (SMEs) and loaners (everyone).
What do you think investors should know about the start-up and crowd funding scene here?
There are three types of investors, and they should understand different things about start-ups and crowdfunding: retail or young investors need to know new and alternative investment options in their personal investment plan giving them better returns compare to conventional financial products; angel investors or accredited investors need to diversify their investment portfolio, and contribute their career/corporate experience and knowledge to local start-ups; and sophisticated or institutional investors must boost and support the bigger picture of the growth of startups and crowdfunding scene in Malaysia.
Generally, I do think everyone, from students to elderly people, should embrace and openly learn new and innovative things in this digital era, especially in crowdfunding. For the first time in history, accessing of capital and investing are now democratised through the Internet and social media. As a retail investor with limited funds, you may also participate in high-risk and highreturn investments, unlike ever before.
Understanding start-ups and crowdfunding makes people open their minds to understanding how technology and innovation gives solutions to many social and economic issues in the world. What finance technology like crowdfunding has demonstrated to us is just the tip of the iceberg on the future of how technology like AI or blockchain will reshape or disrupt the whole industry.
After four years in Malaysia, what’s next for FundedbyMe?
While we will still progress with bringing global smart funds to Malaysia’s start-ups and SMEs, we hope to see more investments go into women-run companies, which currently sees limitations in accessing financing. Our P2P financing platform (namely AlixCo) is going to launch a brand-new financing scheme to help women start or support their businesses. We look forward to see more empowered women and smart money support the movement, and together we’ll make Malaysia’s SMEs better.
TEXT FLAVIA GALEOTTI & EUGENE NG
PHOTOGRAPHY ROBIN YONG
ART DIRECTION AUDREY LIM