The pitchIN 2020 ECF Report has revealed that investors continued to invest in equity crowdfunding deals despite the impact of the pandemic resulting in the platform recording its best ever annual performance.
Last year, 36 companies raised RM59.5 million on pitchIN, sharply higher than the RM22.7 million and 19 deals in 2019.
The 2020 report, pitchIN fourth annual report since 2017 also showed that larger companies were starting to raise funds through ECF. 14 companies raised RM3 million and above in 2020.
PolicyStreet took the record of Malaysia’s highest funded ECF deal when it remarkably raised RM5.28 million entirely within the first Movement Control Order restriction.
pitchIN Chief Executive Officer Sam Shafie said, “There was a moment, when the first MCO was announced, that we genuinely wondered if we would be able to report anything for 2020. But we’re happy to note that this was not the case, and for the 4th consecutive time, we’re delighted to report that the ECF industry continued to grow in 2020.
“1738 investments were made in 2020 by all classes of investors and we are happy that pitchIN has a healthy mix of retail, angel and sophisticated investors. Importantly, investors at pitchIN are investing repeatedly. The 3 most active investors on pitchIN have made 45, 37 and 30 investments respectively. They are no alone in being repeat investors; 468 investors have made 2 or more investments on pitchIN,” he added.
Kashminder Singh, pitchIN CSO added, “Another reason why pitchiN has done so well has to do with the qualities of the deals it hosts. Since 2016, pitchIN has documented the growth of the companies that came on pitchIN. As recorded in previous annual reports, the vast majority of companies have done very well. Business failures are rare.”
On the same note pitchIN has tracked the value of a model pitchIN portfolio over the years. Based on actual valuations and secondary transactions, the model portfolio increased in value in 2020. This is seen most clearly in earlier deals where companies have had time to deploy the funds raised and reap the resultant benefits.
“According to our model, RM37,473.50 invested in 2016/17 in every deal on pitchIN is worth RM101,967 today, an increase in value of 172.1%. pitchIN looks forward to continue delivering value to investors and we have great deals lined up this year,” Kashminder said.
Sam Shafie also revealed that two companies were exploring public listings, with others on track too. “Based on our interaction with founders, we understand that one company is looking at listing on the LEAP Market will another is considering an Ace market listing. When that happens, interest in ECF is bound to grow even more as those companies would prove ECF investments should be part of every serious investor’s portfolio.”
Going forward, pitchIN is on track to surpass 2020’s record performance. “We are confident that this year will be even better than 2020,” said Sam, adding, “pitchIN is currently carrying out its own fundraising exercise through a combination of an ECF campaign on Leet Capital and an institutional investor to raise RM10 million. This is our first ever fundraising and we will use the funds to roll out an integrated digital equity crowdfunding and secondary market platform later this year.”
pitchIN has also applied to operate an Initial Exchange Offering (IEO) platform and if the application is successful, the platform will be well on its way towards becoming a digital investments hub.
