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SGX signs pact with crowdfunding firm to reach out to startups, SMEs

SINGAPORE (NewsRise) -- Singapore Exchange has tied up with crowdfunding platform Crowdo as part of its efforts to engage smaller companies that are not yet ready to list or which prefer to stay private.

The memorandum of understanding with Crowdonomic Media Pte Ltd., which runs Crowdo, includes information-sharing as well as educating companies and investors about the various channels for fundraising in Singapore, SGX said in a statement.

"As a market operator, we believe our established infrastructure and network can support and improve access to capital for early-stage companies," said Mohamed Nasser Ismail, head of capital market development at SGX.

Crowdo, which has a full securities crowdfunding licence from the Monetary Authority of Singapore, is a regional lending and equity crowdfunding platform with operations in Singapore, Malaysia and Indonesia. The platform has been used to finance around 2,000 projects as at end-March 2017, according to SGX.

The Singapore bourse operator already has an alliance with CapBridge, which matches institutional and accredited retail investors with mid-to-late stage startups, and provides depository services for bonds issued by firms that have raised money on FundedHere, another crowdfunding platform.

Unlike CapBridge and FundedHere, which cater to well-heeled investors,

Crowdo focuses on ordinary savers for its peer-to-peer lending platform.

Robson Lee, a partner at international law firm Gibson Dunn's Singapore office, said SGX's strategy of working with Crowdo and FundedHere reflects its need to engage a larger variety of companies and investors, given the emergence of new competitors to traditional stock exchanges.

"There are now alternative venues for fundraising, from crowdfunding and private platforms to the large PE (private equity) firms, that offer large amounts of liquidity without the compliance cost of listing," he said.

SGX has been trying to broaden its appeal beyond the property and energy-related sectors, its mainstays. Its attempt to attract listings from technology firms and other startups also ties in with the government's efforts to develop and nurture promising technology companies from around the world as part of a plan to drive economic growth in the next decade.

In February, SGX issued a consultation paper outlining its plans to allow dual-class shares, which are popular with U.S. technology firms as they give business owners greater voting rights, allowing them to retain control.

The bourse operator could see its first financial technology listing in the coming quarter when Ayondo, which provides social trading and brokerage services, lists after acquiring a small Singapore-listed property developer.

Besides the MOU with Crowdo, SGX on Friday also inked an agreement with PwC's Venture Hub, a unit within the firm that advises entrepreneurs, investors and other players involved in venture capital funding. The areas of collaboration between the two include jointly promoting Singapore as an attractive venue for startups and investors.

--Kevin Lim

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