United Overseas Bank (UOB) says it is investing US$10 million in Israeli crowdfunding platform OurCrowd, in a bid to provide equity financing to small businesses and startups in Asia.
The partnership also marked OurCrowd's foray into the region and would provide a boost to the fintech ecosystem here, UOB said in a statement Thursday.
The Singapore bank said its US$10 million funds injection would further provide its clients an opportunity to expand their investment portfolio to include OurCrowd's crop of companies.
"Through this collaboration, innovative Asian companies with differentiated and highly scalable technology products and services will now get access to another source of funding through OurCrowd's equity crowdfunding platform," UOB said. This would enable Asian startups to source for smaller investments from a large number of accredited investors in exchange for equity or shares in their companies, the bank added.
OurCrowd's international investor network also offered a potential platform for these startups to embark on their global expansion as well as business and product development.
UOB's head of group channels and digitisation, Janet Young, said the bank had been focused on the small and midsize business (SMB) market and was Singapore's largest bank for this business segment.
"It can be challenging for small businesses to obtain financing, particularly equity financing, in the early stages of growth," Young said, adding that the need to address this and "connect smart ideas with smart money" led to the partnership with OurCrowd.
OurCrowd Founder and CEO Jon Medved said the alliance would aim to pair up entrepreneurs with suitable investors and mentors. He added that the crowdfunding platform would further enable investors in Asia to access "quality deal flow" in Israel, Silicon valley, and other global markets, while allowing Singapore startups to secure global investor support.
In August last year, local industry regulator Monetary Authority of Singapore (MAS) established a new fintech and innovation unit to oversee regulatory policies and development strategies for the market segment. These would aim to "facilitate the use of technology and innovation to better manage risks, enhance efficiency, and strengthen competitiveness" in the country's financial sector, MAS said.
Headed by chief fintech officer Sopnendu Mohanty, the business unit comprises a payments and technology solutions office, technology infrastructure office, and technology innovation lab.
MAS in June 2015 had announced plans to set aside S$225 million (US$160.6 million) over five years to support the fintech ecosystem. Called the Financial Sector Technology & Innovation (FSTI) scheme, the funds could be used to support innovation centres such as the setting up of R&D labs in Singapore, as well as institution-level and industry-wide projects.