Singapore start-up Capbridge will soon roll out its online capital-raising platform to help high-tech companies secure funding - after crossing a key regulatory hurdle.
Co-founder and chief executive officer Steven Fang said the firm won a provisional capital markets and services licence earlier this week from the Monetary Authority of Singapore (MAS).
The licence will allow Capbridge to match accredited investors with high-tech companies, he told The Straits Times yesterday.
About 30 high-tech firms, including many from the United States, some 150 global venture capital firms as well as local and foreign financial institutions have expressed interest in joining the platform.
The companies include pharmaceutical firm Novum Pharma and nanotechnology company Liquidia Technologies. Well-known foreign investors include the Bill and Melinda Gates Foundation, Canaan Partners and De Novo Ventures.
Previously, investors could miss opportunities, but now they can follow what's available. This is especially useful for foreign investors interested in Asian investment deals.
DR STEVEN FANG, co-founder and chief executive officer of Capbridge.
Before it launches its service, Capbridge will have to fulfil MAS requirements, including putting up a minimum paid-up capital of $2 million, hiring a compliance officer and providing adequate training for its investment experts.
"We can meet all these requirements. In fact, we're already in the process of putting many of them in place," said Dr Fang.
Capbridge's digital platform is able to provide speedier investment transactions at lower cost.
It is also a "window" into a deal flow comprising both Asian and foreign high-growth firms, said Dr Fang.
"Previously, investors could miss opportunities, but now they can follow what's available. This is especially useful for foreign investors interested in Asian investment deals.
"Because we're global, companies can look for investors around the world who can help them with business expansion," he added.
Capbridge was founded about a year ago and has raised about $3.5 million. The Singapore Exchange (SGX) put in $1.5 million to support the development of the digital capital-raising platform. US investment firm Healthios, local tech incubator Clearbridge Accelerator and Dr Fang himself came up with the rest.
High-tech firms in life sciences, software, engineering and other fields are welcome on the Capbridge platform. They would also need to be high-growth companies registering double-digit compound annual growth rates.
Only accredited investors, including financial institutions and ultra-high net worth individuals, are eligible to participate on Capbridge.
Mr Chew Sutat, SGX head of equities and fixed income, said that Capbridge "serves the growing funding needs for entrepreneurs, specifically for those companies that may not be ready to go public yet". With capital-raising taken care of, they can focus on building businesses that will make them tomorrow's billion-dollar firms, he said.
Healthios co-founder and Capbridge chief operating officer Frederick Reichenbach said the average capital sum raised is likely to be around US$30 million (S$42 million). "Companies listing on SGX Catalist can raise roughly US$10 million. Usually, they would be valued at over US$100 million. Institutional investors would typically invest US$20 million to US$60 million in each of these companies. So I think the average sum raised on Capbridge here will be about US$30 million."
Healthios led many roadshows in the US and Europe to investigate opportunities for a digital capital-raising platform like Capbridge. Much interest was garnered, notably at investment bank JP Morgan's recent healthcare meeting.
Said Dr Fang: "The life sciences companies were interested because of Asia. They want to expand here and are searching for investors with business connections in the region to help them do so."
Mr Reichenbach explained that many life sciences firms do not fit in a stock exchange like Nasdaq in the US which is popular with high-tech companies. These are mid-sized firms roughly valued between US$150 million and US$300 million each, he said. "They are mid-scale companies, too small for Nasdaq which typically lists companies worth billions of dollars."
Capbridge has attracted overseas companies because Singapore has a strong reputation as a financial hub, especially with its network of venture capital and investment firms. It also has Temasek Holdings which boasts a strong investment reputation and whose executives are known as good board members, added Mr Reichenbach.
Dr Fang said: "Our aim is to help the companies we help to fund, list on the SGX. In this way, Singapore can be a hub for mid-sized high-tech listed companies."