Equity crowdfunding is the Hotel California of fundraising in Malaysia -

A new legitimate alternative to traditional investments in the country, ECF is regulated and brimming with the promise of a real connection with consumers. But there's one big drawback—No Exit. Out of 80 fundraising campaigns in four years, three have managed an exit so far

Malaysia has been on the forefront of alternative financing, as it was the first country in Southeast Asia to regulate equity crowdfunding

As of December 2019, ECF has helped 77 companies in raising a total of US$17 million since 2016

However, awareness and participation from retail investors remain rather low. Many don't know ECFs exist

On April 16, the Malaysian capital market regulator finally announced a regulatory framework for a secondary platform to boost liquidity

96 investors. Eight days. RM1.04 million (US$320,000). That’s how much Biztory—a Malaysian software-as-a-service (SaaS) startup—raised through equity crowdfunding (ECF) this January.

The company had gone the ECF way with a RM700,000 (US$161,000) target—about half the amount it ended up with.

Fresh from becoming profitable in June 2019, Biztory chose to tap into its customer base via ECF “for capital and synergy” to try and scale further, said founder-CEO Bryan Soong. “I’m not a very sociable person, and with my limited connections [within the venture capital space], it’s hard for me to go out there and fundraise.

AUTHOR

Ka Kay Lum

Based in Kuala Lumpur, Ka Kay covers investment activities, aka following the money, across Southeast Asia and in-depth stories on the often-overlooked Malaysian startup ecosystem. She was previously a regional writer for Nikkei-owned DealStreetAsia.

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