1 May, 2016
Founded in 2015, Singapore-based fintech startup CapBridge was formed to address the gap in the market for high-tech companies which need funding but do not meet the valuation requirements of traditional capital markets. It aims to provide a platform for high-growth, high-tech companies, particularly with market-disrupting technologies, which need funding in the earlier stages of their development and need to take advantage of scale, to connect with investors.
Target Companies
CapBridge targets companies with valuations of between US$100 million and US$300 million in the healthcare, infocomm and communications technology, and other highOtech industries, and who are seeking to raise funds of at least US$10 million.
Typically, such companies would otherwise be required to approach venture capital firms for funding, and go through the arduous process of talking to hundreds of firms to land a deal. CapBridge offers the opportunity to short-cut this process through its online platform and connections with 366 global institutions with a deployable fund size of US$409 billion.
Itself a start-up, CapBridge has already raised around $3.5 million in funding to-date, including a $1.5 million grant from Singapore Exchange to develop its platform. With its recently-secured Capital Markets Services Licence from the Monetary Authority of Singapore, CapBridge is able to access a wider pool of investors for start-up companies participating on its platform.
How It Works
A company wishing to raise funds on the CapBridge platform must first identify a lead investor who has done due diligence on the company, and who sets the terms for the fund-raising round. This aims to shorten the time needed to raise funds as it avoids lengthy re-negotiations. If the company does not have a lead investor, it can use the CapBridge platform to find one, in which case it will be labelled as “Seeking Lead” to identify it to potential lead investors on the platform.
When a company is accepted by CapBridge to fundOraise on its platform, the company makes certain key documents available on the platform, such as its pitch deck, capitalization table, and term sheet prepared by the lead investor. Investors who are interested in participating in the round may use the platform to find out more about the company, or to commit to the round.
All funds committed by potential investors are held in escrow. Only when all legal documentation is executed and shares are issued will funds be transferred from escrow to the company’s bank account. If the campaign is unsuccessful, funds are returned to the investor without any charge.
The CapBridge platform appears to have been well received by both investors and technology companies. A press release published on CapBridge’s website in June 2015 quotes Philip Lim, CEO of the commercialization arm of A*STAR as saying:
“The launch of this platform is timely as it will help investors to be involved in companies with exciting technologies and great potential. We look forward to having our A*STAR spin-off companies to be onboard the CapBridge platform. We are confident that A*STAR’s R&D portfolio will continue to build a strong pipeline of Singapore companies that will be attractive to investors.”
For further information, please contact:
Joyce Tan, Partner, Joyce A Tan & Partners
