Singapore-based CoAssets has successfully raised AU$6.55 million ahead of its Australian Securities Exchange (ASX) debut on Monday.
CoAssets, which focuses on real estate and small to medium businesses, will be the first crowdfunding platform on the exchange once listed. In doing so, it is exiting the National Stock Exchange of Australia (NSX) to pursue the larger market.
Company CEO and co-founder Getty Goh said CoAssets lowers the barriers to entry of property and SME investment, charging developers 3-5 percent of the total funds raised, based on a risk versus reward analysis.
Goh added that although Australia and Singapore are very similar in the way businesses operate, CoAssets chose the ASX listing over its home exchange as Australian investors tend to be more interested in tech investment.
"The level of understanding and appreciation of tech here is very different. Because of that it was a deliberate decision to come [to Australia] to list," he said.
"After the listing is done and dusted we will be putting a lot more emphasis in the market here."
Goh said the company allows those that have been turned away from banks to list their projects, but also said it has its own strict risk assessment model which results in not all projects getting listed.
"From a platform perspective, there's a huge risk to reputation if something goes wrong," he said.
CoAssets raised AU$4.8 million from various placements in the last 12 months, with the AU$6.55 million raised under the IPO giving the young company cash for expansion.
Since launching in Singapore in 2013, CoAssets has seen SG$45 million invested on its platform spread over 75 completed deals thanks to 55,000 users. The company's first crowdsourced project in Australia raised over AU$105,000 for engineering consultancy firm Stapleton & Associates in two days.
According to CoAssets, the global crowdfunding market opportunity is around $96 billion, with real estate crowdfunding in particular expected to become a $90 billion market in the next 10 years. Peer-to-peer business lending is forecast by Morgan Stanley to hit AU$22 billion by 2020.
Alongside its Australian growth, CoAssets is looking at expanding its presence in China.
"If you ask an Australian what they want to invest in, they will tell you tech; if you ask the same question to the Chinese, they will say property," Goh said.
After the ASX listing on Monday, CoAssets is heading to China to work with local authorities and businesses to pursue the Chinese market, as Goh said it is not the same as an Australian IPO.
When it comes to regulation in Australia, the federal government released a new set of draft regulations on the country's proposed crowdsourced equity funding (CSEF) framework in December which details how non-listed public companies, including startups, can access CSEF from external investors.
In March, former Minister for Industry, Innovation and Science Christopher Pyne said the CSEF laws had already made their way through the House of Representatives and were waiting in the Senate for their passage, which was since interrupted by the 2016 federal election.
Daniel Smith, executive director for CoAssets in Perth, said the legislation will not affect the CoAssets platform at this point in time as it is purely focused on debt funding.
"We are watching what the government introduces in terms of debt crowdfunding legislation," Smith said. "Ours is a pure facilitation platform and we operate under an ASIC class order exemption -- which sunsets in June next year."
"We'll have to wait and see what the government and ASIC want to do about it."