Crowdfunding history in Malaysia
Recently, crowdfunded projects are on the rise.
Crowdfunded companies, crowdfunded products and crowdfunded games are common occurrences, especially in the tech industry. Obviously, these trends started in the west, in Silicon Valley of the United States. But how does this apply to Malaysia? Did the trend already reach Malaysia? Since this involves the movement of funds, how does the government monitor it? Is it available in Malaysia in the first place? Let’s take a look at the current climate of crowdfunding in Malaysia.
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When did it start?
First, it should be noted that crowdfunding in Malaysia is regulated. It first made the news in 2015, when the Deputy Finance Minister during that time passed a bill which allows crowdfunding services in Malaysia, pioneered by six local companies. At that time, it was the first country in ASEAN country that allowed such a business model. As a reference, Kickstarter launched on April 28, 2009.
What happened since then?
Since then, to put it plainly, crowdfunding has grown steadily in Malaysia. More and more crowdfunding platforms have emerged in the country, like the ones listed in our old article here. Here are some important data points from 2015 to 2019 showing the growth in popularity of crowdfunding:
- 2016 June: 100% Project, a crowdfunding platform focused on funds for schools and students, have raised around RM 355,177 for almost 27 schools in Malaysia.
- 2016 Sept: Kakitangan.com, a Human Resource (HR), has been funded with RM1 million, collecting 5 times the initially targeted fund of RM 200,000.
- 2017 Apr: The securities commission of Malaysia has announced that in less than a year, 6 equity crowdfunding service: FundedByMe (Alix Global), Ata Plus, Crowdonomic, Eureeca, pitchIN and Crowdplus has funded RM10.4 million to 14 companies.
- 2017 Oct: The Malaysia Venture Capital Management Bhd (MAVCAP) has invested around RM2.95 million in SimplyGiving.com.
- 2018 June: After the first historic government turnover, the people of Malaysia gathered USD 2 million in just 24 hours to resolve the government’s debt.
- 2019 March: Fintech has made research, stating that between 2016 and 2018, the equity crowdfunding in Malaysia has raised around RM 48.87 million.
Challenges of crowdfunding
One might say that the greatest challenge of crowdfunding is the stigma of the crowdfunding “scheme”. In the first place, the culture of buying things online is quite recent, albeit booming in the country very recently with sites like Lazada.
Also, crowdfunding in its core is to ask money from someone else. Some even consider crowdfunding as “Online Begging”. It it true? Well it is up to all of us to decide. Crowdfunding is a tool, and like tools are, for example a hammer, you sometimes need it to knock a screw into a wood, but you might need other tools to do screwing or cutting.
In the end it is up to us to use the cards dealt to us the right way.