Saturday, June 22, 2024

SEC says 146 start-ups, SMEs used crowdfunding to raise P427M in 2023

The Securities and Exchange Commission (SEC) said it successfully introduced the capital market as a funding source for small businesses during its year-long nationwide roadshow, generating millions in capital for small businesses.

A total of 1,584 companies have registered as issuers with crowdfunding intermediaries, namely Investree Philippines, SeedIn Technology, and Eastern Securities Development Corp (also known as Round One). Of the total, 333 have raised capital totaling P1.94 billion for 1,143 projects.

This comes just three years after the first crowdfunding license was approved by the SEC in December 2020. This year alone, 146 companies have raised capital totaling about P427 million for 1,114 projects through crowdfunding.

Of this year’s issuers, 37 companies were participants in the recently concluded 2023 Roadshow on Capital Formation for Micro, Small and Medium Enterprises (MSMEs) and Start-ups.

Meanwhile, 314 more companies have expressed interest in raising capital through crowdfunding, after participating in the roadshow spearheaded by the SEC in Baguio, Tarlac, Manila, Legazpi, Cebu, Iloilo, Bacolod, Tacloban, Davao, Cagayan de Oro and Zamboanga.

“The SEC transformed the capital market into a more accessible financing oasis for small businesses, as our year-long nationwide roadshow proved to be a success in attracting MSMEs and startups toward innovative fundraising options,” SEC chairperson Emilio B. Aquino said in a statement.

“This is just the beginning, as we have also launched Call-a-Friend and Engage with SEC, a channel for roadshow attendees to connect with crowdfunding intermediaries and exchanges to discuss the most appropriate financing option for them. This way, the SEC makes sure that small businesses grow and thrive amid the challenging environment in the modern age,” he added.

One of the small businesses that have successfully tapped crowdfunding to finance their expansion is Tipaklong Sustainable Mobility Corporation, a bike-sharing company.

Tipaklong founder and president Arnold Bufi noted how its introduction to Round One’s crowdfunding platform had been pivotal in realizing the company’s vision of providing sustainable mobility to Filipinos.

“After several months of pitching, both online and off-line, attending roadshows, and hand-holding our early investors, we were able to reach 100% of our target on December 4,” Bufi said.

“The capital raised from crowdfunding will supplement the capital raised from Tipaklong’s private placement efforts,” Bufi added, saying that the funds will help them launch a new project in 2024.

Michelle Van Gardose, owner of one-person corporation MV Gardose Trading OPC, also shared how crowdfunding opened up more avenues for her to grow her business.

“Investree is now like the backbone of our business, as it has played a huge part in our operations by widening my financial capacity, which has helped me generate more transactions and reach more clients,” Van Gardose said.

For makeup company Ellana Cosmetics, crowdfunding not only helped it gain access to capital but was also a source of financial guidance in expanding its business.

“[SeedIn] provided excellent financial guidance, helping us to access more than P80 million of financing support. We highly recommend them to any company looking for financing,” Diego Buanaflor, chief executive officer of Ellana Cosmetics, said.

The SEC earlier launched Call-a-Friend and Engage with SEC (CAFE SEC). This will serve as a channel for participants of the roadshow to reconnect with crowdfunding intermediaries and the PSE for inquiries pertaining to their financing needs, and additional information on capital market-based products and services.

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