PH startups raised P2B from crowdfunding

The efforts of the Securities and Exchange Commission (SEC) to grow the country’s crowdfunding sector is gaining momentum, with total money raised reaching close to P2 billion over the last three years.

The results come as the corporate regulator embarked on a nationwide campaign to ramp up support for alternative funding avenues that smaller companies could tap in lieu of traditional bank loans and the stock market.

“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 [micro, small and medium-sized enterprises] and startups toward innovative fundraising options,” SEC chair Emilio Aquino said in a statement.

Crowdfunding, which allows businesses to raise money from a pool of small investors via online platforms, is one of the fastest-growing sources of alternative funding with about 333 successful money-raising deals worth P1.94 billion since 2020.

This was used to fund 1,143 projects, according to the SEC.

For 2023 alone, 146 companies tapped crowdfunding to raise P427 million for 1,114 project, it added.

“Of this year’s issuers, 37 companies were participants in the recently concluded 2023 Roadshow on Capital Formation for Micro, Small and Medium Enterprises and startups,” the corporate regulator said.

It said another 314 companies had expressed interest in raising capital through crowdfunding after participating in the roadshow spearheaded by the SEC Office for the Advancement of Strategic Investments in SMEs (Oasis) in Baguio, Tarlac, Manila, Legazpi, Cebu, Iloilo, Bacolod, Tacloban, Davao, Cagayan de Oro and Zamboanga.

Accredited firms

There are three registered crowdfunding firms in the country: Investree Philippines, SeedIn Technology Inc., and Eastern Securities Development Corp. (Round One).

“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,” Aquino said.

“This way, the SEC makes sure that small businesses grow and thrive amid the challenging environment in the modern age,” he added.

The SEC is accelerating efforts to introduce more products and capital-raising activities under its 888@88 target. The goal is to have at least 888 companies tap the capital market in time for its 88th anniversary in 2024, it explained.

“The roadshow generated a total of 10 new leads for listing on the [Philippine Stock Exchange], promising a healthy pipeline of capital-raising activities next year,” the SEC said without providing additional details.

Last week, the country’s largest investment bank, BDO Capital & Investment Corp., said it is readying at least six deals that could raise at P100 billion via the PSE in 2024.