The Securities and Exchange Commission (SEC) has approved the country’s first crowdfunding portal, one that will be operated by a joint venture between Gotianun-led conglomerate Filinvest Development Corp. and financial technology Investree Singapore Pte. Ltd.
The local entity, called Investree Philippines Inc., was authorized by the SEC to operate a crowdfunding platform that would connect small and medium enterprises (SMEs) with banks and other lenders.
The registration of Investree as a crowdfunding intermediary and funding portal would be valid for one year, subject to a review by the SEC of its actual operation in the first 11 months for possible extension.
Investree, which was originally founded in Jakarta in 2015, connects SMEs with individual lenders seeking alternative investments and peer-to-peer lending marketplace. Backed by entities such as MUIP, a unit of Japan’s Mitsubishi UFJ Financial Group and Indonesia’s BRI Ventures, Investree had been planning to set up shop in other Southeast Asian markets, including the Philippines and Thailand.
Crowdfunding refers to a fundraising activity typically conducted through an online platform for startups and SMEs. It basically involves three parties: the entrepreneur or project initiator, the supporters or those willing to fund the business idea or project, and the platform or moderating organization that brings the entrepreneur and supporters together to realize the business idea or project.
Crowdfunding may be donation-based, where supporters pool their resources to support a charitable cause; or reward-based, where supporters give money in exchange for a “reward,” usually a product produced by the project initiator.
This type of fundraising may likewise be lending-based, where supporters lend money to the entrepreneur and receive his/her legally binding commitment to repay the loan at predetermined time intervals and interest rate; or equity-based, where supporters invest in shares sold by the entrepreneur and receive a share of the profits in the form of a dividend or distribution, subject to the entrepreneur’s discretion.
Investree is the first crowdfunding intermediary and funding portal registered with the SEC since the rules and regulations covering crowdfunding took effect in July 2019.