First asset-based P2P platform debuts in January


MALAYSIA’S first asset-based peer-to-peer (P2P) financing platform, CapSphere is expected to go live this January, to fill the country’s underserved crowdfunding market.

CapSphere Services Sdn Bhd business development head Jeshua Choong said the company plans to assist up to 80 small and medium enterprises (SMEs) raise funds to acquire assets such as equipment in the first 12 months after the debut.

Unlike other equity crowdfunding platforms, Choong said CapSphere provides a debt crowdfunding service for SMEs to buy revenue-generating assets in a more disciplined manner.

“I do not want investors to be putting in money and that money goes to paying someone else’s salary or someone’s utility bills. For us, when SMEs want money, they have to tell us what they are going to do with that money. So, there is an underlying basis behind the raised cash,” he told The Malaysian Reserve at the LSE Recode Tech Conference 2019, organised by the London School of Economics Alumni Society of Malaysia (LSE ASM) in Kuala Lumpur yesterday.

CapSphere facilitates the financing process for issuers who want to raise funds for the purchase of assets, while securing the asset as collateral which provides investors with greater assurance and transparency.

Choong said the company targets to issue about 80 notes by the end of 2020, which could translate into 80 SMEs for funds between RM50,000 and RM1 million each.

CapSphere, he said, prefers to aid raising the capital for asset purchase by businesses in healthcare, fitness and automotive sectors.

The company is also aiming the renewable-energy sector, particularly in solar industry although challenges are expected as the fundraising activity would depend more on consumers than business organisations.

“For all P2P, we are required to help SMEs raise funds and not individuals. Solar would be a little bit challenging as the market is heavy on individual consumers. Therefore, we are currently talking to the industry players on how we can assist the SMEs in that market,” he said.

Choong said the P2P financing development in Malaysia is growing despite challenges persist due to lack of public awareness and acceptance.

CapSphere received its licence from the Securities Commission Malaysia (SC) in May along with four other P2P lending platforms which are CapitalBay, Crowdsense, Micro-LEAP and Money Save Capital. Meanwhile, three equity crowdfunding players — 1337 Ventures, Ethis Ventures and MyStartr — received their licences in the same month.

In total, there are 21 market-based financing platform operators approved by SC thus far. As of June 2019, nearly RM377 million was raised via the entire P2P financing industry, which has benefitted more than 1,100 SMEs in the country.