United Overseas Bank has teamed up with Israeli start-up OurCrowd to give its clients access to equity crowdfunding opportunities around the world. The bank says it is the first collaboration between an Asian bank and an equity crowdfunding platform.
UOB is making a US$10 million (S$14 million) investment in OurCrowd, the bank said yesterday. The size of its stake was not disclosed.
For a start, only a few thousand accredited UOB clients who meet the minimum income or asset requirements will be able to invest with OurCrowd.
But Mr Jonathan Medved, founder and chief executive of OurCrowd, said the partnership is a huge step into the Asian tech ecosystem for OurCrowd.
"We will further strengthen our activity here. Over time, we plan to hire teams that will be working in this market and getting full licences from the Monetary Authority of Singapore for OurCrowd going forward," he said at a media conference at UOB Plaza.
The collaboration also deepens UOB's support network for start- ups and small and medium-sized enterprises in the region, said Ms Janet Young, UOB group head of channels and digitalisation.
UOB can refer companies from its tech incubator and accelerator programmes to OurCrowd to be considered for fund-raising, and the OurCrowd team will make the final decision on its portfolio companies.
While a handful of platforms offer debt crowdfunding in Singapore, equity crowdfunding - in which firms exchange equity or shares in their company for funding - is relatively new.
"Equity is absolutely essential for a start-up in the technology area because when a start-up gets going, the product's not ready. Who's going to loan you money when you don't have a product? You have to go out and seek venture capital," said Mr Medved.
And while borrowing gets tougher in times of economic uncertainty, when banks watch their loan books more carefully, equity crowdfunding is expected to grow.
Great companies are built in downturns, noted Mr Medved.
A three-year-old start-up, OurCrowd has invested more than US$200 million in 93 companies and made four exits so far, including the listing of Israeli tech incubator Trendlines on the SGX Catalist board last year.
OurCrowd had 11,000 accredited investors around the world as of January, and about 100 new investors join the platform each week.