From funding lifesaving operations to the development of the latest “must-have” travel gadget, crowdfunding has become a part of modern society. Southeast Asia is very much part of this ever-growing trend and is predicted to continue to grow at twice the rate of the rest of the world.
Until recently, financing for businesses was almost entirely conducted through restrictive banking and financial institutions, but with the dawn of the fintech era, angel investors and crowdfunding, finding capital to get your business idea off the ground is more accessible than ever.
The increasing use of crowdfunding in Singapore and the surrounding nations is opening up new opportunities for people to bankroll their crazy inventions or sound ideas. It also allows entrepreneurs the chance to test the market for their products. If there is an excellent response to the concept, the funding garnered from the campaign can get production rolling. If the money or support is not rolling in, it gives the company a chance to pivot or iterate.
In a world of constant flux, being afforded the space to ideate and create with very little capital ensures creativity and ingenuity has a home. Time is of the essence for many projects, therefore, being able to tap into a quick stream of cash to give it a starting point means that more people are willing to take a risk on developing their ideas.
Different types of crowdfunding
When it comes to crowdfunding platforms, the type required depends on the project planned. Small, charity fundraising or individual projects are perfect candidates for donation-style platforms such as GoFundMe, while bigger projects or startup companies hoping to find investors need to use peer-to-business lending platforms.
Using crowdfunding platforms to fund the development of a business negates the need to cut through the red tape of traditional capital investments. That said, this method of subsidising entrepreneurial growth is not without its own rules and regulations. It is also often a busy playing field, and the initial pitch needs to stand out above the others clamouring for investment.
Startups tell us if crowdfunding is right for your business
Taking the business of funding the new ventures and ambitions of others into their hands, crowdfunding startups are springing up all over the world. Rather than relying on the established companies, some enterprising companies in Southeast Asia have decided to take a similar model and create their own.
Let’s take a look at some of the players who are aiming to fund the dreams of others in the region and globally.
Japanese-founded Air Funding set up its Malaysian branch in Kuala Lumpur in April 2019 to help community and individual projects find funding. With projects ranging from helping to feed the homeless, to paying for musicians to travel to gigs on other continents, it aims to assist funding in countries all over the world.
It may be a fledgeling company, but Air Funding has big plans to disturb the crowdfunding market globally.
Indonesia’s answer to GoFundMe was established in 2013 and has helped fund over 13,000 social causes since it began. Based in Jakarta, the company has over 50 employees and upholds the belief “that humans are innately good and the internet is the perfect medium to connect and amplify kindness.”
With this attitude and one of the biggest markets in the world at its fingertips, Kitabisa is sure to continue to thrive.
With a different motive in mind, Crowdo aims to assist in providing equity and low-interest loans to entrepreneurs and SMEs. Its peer-to-business lending platform takes much of the red tape out of financing by the use of simple contract templates.
With upwards of 38,000 current members, spanning Singapore, Malaysia and Indonesia, it is one of the region’s most prominent players in the burgeoning crowdfunding fintech fields.
As the global market continues to expand, the desire to create local opportunity also increases. With crowdfunding platforms offering a way to access money to develop business ideas, social projects or fund the dreams of others, there is a feeling of a community, unlike in traditional financing circles. When people believe in you, support you and fund you, it becomes almost personal. Early adopters and loyal users of products, fans of up-and-coming artists, and lifesavers are born on crowdfunding platforms. And these connections often last long after the close of the campaign.
So far, in 2019 alone, $5,650.1 million USD’s worth of transactions have occurred in the sector with an annual growth rate of 16.3% expected for the next three years. This will bring the transaction value up to $10,319.1 million USD, almost doubling the business done in this manner. It is less than a decade since this trend of community funding online began, and while initially, Southeast Asia lagged behind the rest of the world, now crowdfunding in Singapore and the surrounding region is on the verge of taking the throne on a global scale.
Long live the crowdfunding kings and queens.