Online capital-raising platform Capbridge received a licence earlier this week that allows it to help high-tech companies secure funding from global capital markets.
The capital markets and services licence from the Monetary Authority of Singapore lets the firm connect investors seeking alternative investment vehicles to high-tech companies aiming to raise at least US$10 million (S$13.5 million).
Capbridge targets firms with valuations of between US$100 million and US$300 million in healthcare, infocomms and communications technology, and other high- tech industries.
It has a pipeline of about 35 companies but will target only four to five this year and more next year.
Through its partner Healthios, an American healthcare online capital-raising platform, Capbridge has access to 366 global institutions with a deployable fund size of US$409 billion. Healthios is an investor in Capbridge.
Co-founder and chief executive Steven Fang told The Straits Times that there is a gap for fast- growing, high-tech start-ups trying to get funding.
The American exchange Nasdaq caters for firms valued from US$5 billion but smaller high-growth tech companies do not have anywhere to go to raise funds from the capital market. They can approach venture capital firms but to land a deal they would have to talk to hundreds of companies, an arduous process, he added.
On the other side, investors are looking for investment instruments that provide better returns.
“Globally, investors have not been able to get the returns they want from blue-chip stocks and properties,” said Dr Fang. “Capbridge can access these investors and public institutions want to look at the global private market space.”
Citing statistics from leading investment adviser Cambridge Associates, he said venture capital firms that invest in high-tech companies get 10.3 per cent returns, compared with 7.7 per cent on the S&P 500 index.
High-tech companies can go to Capbridge to raise US$20 million to US$50 million at various stages of development so as to expand quickly. Capbridge, founded about a year ago, is one of more than 160 fintech start-ups in Singapore.
The Singapore Exchange (SGX) gave a $1.5 million grant to Capbridge to develop its platform. The start-up then raised another $2 million for business expansion and manpower.
SGX head of SME development and listings Mohamed Nasser Ismail told The Straits Times that increasingly companies need funds at earlier stages of development.
“The growth of companies depends on scale, how big they can grow. This becomes a priority and they need access to capital faster than before,” he noted.
“This is where Capbridge will play an important role, especially in high-tech companies that are driving disruption and creating innovations not seen before.”
To qualify for Capbridge help, a company must have a lead investor who has done due diligence.
Capbridge chief operating officer Frederick Reichenbach said: “The lead investors are usually the domain experts. They would have checked the company properly.
“When they come to Capbridge, they are essentially saying to other investors, ‘I’ve done the due diligence, I’m confident it’ll work, come co-invest with me’.”
Capbridge will also have a team to go through the documentation, he added, and find lead investors for companies that do not have one.
Dr Fang said Capbridge will also work with government agencies to attract high-tech customers to locate research and development activity and regional offices here.