By SHAHEERA AZNAM SHAH / Pic By RAZAK GHAZALI
PITCH Platforms Sdn Bhd, the operator of crowdfunding platform pitchIN, expects to apply for an initial exchange offering (IEO) to the Securities Commission Malaysia (SC) by the second quarter of 2020.
Its CEO Sam Shafie (picture) said the application allows pitchIN to assess companies intending to raise funds via a digital token sale and provide an IEO platform.
“The IEO framework is already out and we plan to apply for it, so companies will have another option to raise money.
“This way, companies that had raised money in exchange for equity in the past can switch to digital token,” he said at pitchIN’s Equity Crowdfunding (ECF) Report 2019 review in Kuala Lumpur yesterday.
Catering to the digitalised offering, Sam added that pitchIN expects to strengthen its operational processes or form collaborations to serve the IEO market.
“Our track record speaks volume in terms of our ability, and Malaysia is among the few countries that have legalised this.
“If a company wants to do an IEO, they need to come to a platform or body approved by SC. SC will screen through the offers in terms of proposition and technologies as digital tokens such as initial coin offering (ICO) and IEO require blockchain technology.
“PitchIN has experience in company assessment because we have a strong due diligence process, but IEO involves enhanced technologies,” he said.
Although its nature is relatively new to the local market, the IEO is estimated to grow five times larger than the local ECF market, said the Pitch Platform chief strategy officer Kashminder Singh.
“If Malaysia starts the IEO, it will be an entirely new market. According to SC’s guidelines, ECF’s ceiling is capped at RM3 million for the first year, but the IEO could go to RM100 million if they want to,” he added.
Kashminder said should the crowdfunding platform’s application be approved by SC, pitchIN expects to launch its IEO platform between late 2020 and early 2021.
In January, SC published the requirements for digital token offerings.
SC sets out that a company which is seeking to raise funds via IEO must be a locally incorporated company with a minimum paid-up capital of RM500,000, with its main business operations in Malaysia.
Meanwhile, Sam said pitchIN expects to conduct 24 deals with companies which intend to raise more than RM30 million this year.