Fundnel Unveils Sustained Demand for ECF Deals Amidst Global Economic Headwinds and Reports Growing Interest in Revenue-Sharing
- Over 240 Malaysian SMEs sought Fundnel's expertise for fundraising, surpassing the industry's average deal activity
- In 2019, Fundnel secured US$120 million for startups, private companies and venture capital funds in the region
- Revenue-sharing structure offers investors a way to support their favourite brands while providing a clear pathway for exit
KUALA LUMPUR, Malaysia, July 17, 2020 /PRNewswire/ -- Fundnel Malaysia today announced its performance for 2019, signalling sustained demand for alternative investments and lending. Over 240 Small and Medium-sized Enterprises (SMEs) sought the private investment platform's expertise for fundraising, surpassing the industry's average deal activity; four fulfilled Fundnel's stringent requirements and have collectively raised RM5m. Across its five country markets, Fundnel secured US$120 million in essential funding for startups, private companies and venture capital funds, rendering 2019 its best year yet.
These fundraisers hail from various industries, from Food and Beverage (F&B) to Fintech. Amongst them, two SMEs -- Celmonze The Signature, a one-stop beauty heaven with result-oriented face and body treatments, and CapBay, a multi-bank Supply Chain and Peer-to-Peer financing platform -- were able to tap on the Malaysia Co-Investment Fund scheme by the Securities Commission Malaysia, which provided an additional boost for the businesses to pursue their next stage of growth. Majority of the funds raised were channelled to operating expenses for expansion and technology development.
Building Next-generation Private Capital Markets
Wan Mohd Firdaus, Country Director of Fundnel Malaysia, who is humbled by the ability to lend a hand to local SMEs, said, "the ultimate goal of most businesses is to generate profits. What sets exceptional businesses apart from the others is a desire to fulfil altruistic pursuits, such as a commitment to zero carbon emission or inclusive hiring."
Fundnel is making strides toward its vision: building next-generation capital markets to enable the efficient distribution of capital that will create jobs, spur economic growth and build nations. "When we witness our work with these SMEs manifest itself in the form of new outlets, which provide gainful employment for Malaysians, or improved products or systems for the betterment of society, we are inspired to devise creative ways to reach more entrepreneurs and private companies", he added.
Revenue-sharing: New Use Cases for a Proven Structure
In 2016, Fundnel introduced a revenue-sharing deal structure that allows a business to receive non-dilutive funding from a group of investors. In return, the business would share a part of its revenue with these investors for a fixed period of time until the principal and investment multiple has been paid up. In 2019, after years of research and implementation with numerous investors and fundraisers in the region, Fundnel officially debuted its revenue-sharing product in Malaysia.
Revenue-sharing offers a new realm of opportunities for investors. It paves the way for an investor to support a brand that resonates with personal values while providing a clear pathway for an exit within 12-24 months. Union Roastery, a speciality coffee roaster and cafe, was the first in Malaysia to raise funds through revenue-sharing from 15 individual and corporate investors, all of whom have received their principal investment along with above-expected returns. The F&B chain is currently raising a second campaign with Fundnel.
The Next Chapter for Southeast Asia's Largest Private Investment Platform
Fundnel has five other SMEs in its pipeline that seek to launch fundraising campaigns in the weeks ahead. From evaluation to pre-launch preparation, the team was able to lay the groundwork for these deals despite the country's movement control order -- a testament to Fundnel's digital-first approach to alternative investments and lending.
These SMEs span various industries and will be offered to investors in an array of structures. Companies of note include Enya, a digital period care company with a vision to provide affordable organic options to women; and Morganfield's, an award-winning American-style diner with outlets across Malaysia, Singapore and Shanghai, China. Through an industry-agnostic approach and bespoke deal structuring, Fundnel ensures that it fulfils varied investor preferences while balancing the requirements of fundraisers.
In 2020, Fundnel will continue to enhance its platform to serve more Malaysian SMEs and help investors find and support everyday companies and essential services with growth potential that they care about.
Any fundraising campaign by Fundnel, including such revenue-sharing offers, are subject to its respective terms, conditions, and risks. There can be no assurance that any target rates of return will be achieved with respect to any of the fundraising campaigns, and actual results or performance of a future fundraising campaign may differ materially from the Union Roastery campaign. This press release has not been reviewed by the Securities Commission Malaysia.
About Fundnel - fundnel.com
Fundnel is Southeast Asia's largest private investment platform.
At the core of its deal-making expertise lies a proprietary engine, underpinned by artificial intelligence and machine learning technologies. The algorithms automatically screen each investment opportunity to assess business and funding viability. Deals that fulfil Fundnel's stringent requirements are thereafter syndicated to investors with corresponding mandates.
Fundnel is headquartered in Singapore with a growing presence in 5 countries across Asia Pacific. Since inception, Fundnel has curated US$6 billion worth of deals for over 13,000 investors.
In 2019, it secured US$120 million in essential funding for private companies and private equity and venture capital funds.