KINIBIZ became the first local company to announce plans to go for equity crowdfunding under Securities Commission guidelines through an approved platform operator. The exercise is expected to commence later this month or early next month.
KINIBIZ operates a subscription business news, views and issues portal and publishes a fortnightly full-colour magazine focusing on Malaysian business.
The fundraising will be for its expansion in the next few years, particularly to promote the magazine, increase online presence and look into regional diversification, its CEO and founding editor P Gunasegaram said. It is currently in discussions with platform operator pitchIN to finalise the terms and conditions.
Broadly, the equity crowdfunding will involve the issue of new shares in KINIBIZ which will be capitalised at RM2 million before the issue. The public will have the choice of subscribing in multiples of RM1,000 through a crowdfunding platform to be operated by pitchIN.
The Securities Commission had earlier in the year approved six companies to operate platforms for equity crowdfunding in Malaysia. Under the guidelines, small start-ups and business ventures will be allowed to raise up to RM3 million from the public.
They are allowed to go back to the market for a further RM2 million, to make a lifetime maximum of RM5 million.
Retail investors are allowed to invest a maximum of RM5,000 each in the offering while sophisticated investors don’t have a limit. The latter are defined as those individuals or institutions with a nett worth of over RM3 million by self-declaration.
Angel investors, those funds which help budding entrepreneurs and start-ups, can invest up to RM500,000 over a 12-month period.
Gunasegaram (
photo
) said that
KINIBIZ
found equity crowdfunding a suitable way to raise funds by appealing to a wide cross-section of the public to raise relatively small amounts of money. Also, he added, it does not stop larger investors to come in as well if they choose to do so.
“On top of that, this form of equity crowdfunding helps us to keep our independence by spreading our shareholding among a number of investors and enables the original shareholders to maintain majority control,” he explained.
Sam Shafie, CEO of pitchIN, said that KINIBIZ’ plan to raise capital through equity crowdfunding was very exciting news.
“We are delighted that KINIBIZ plans to reach out to investors through equity crowdfunding. KINIBIZ has created history by being the first company in Malaysia to announce its intention to raise money from the public using such a platform.
“Equity crowdfunding is an exciting and viable option for privately held businesses to raise capital. It enables companies seeking capital to reach out to a very wide spectrum of investors, an option previously possible only for IPOs,” he said.
He added that this coming exercise will give readers of KINIBIZ and other investors who are keen to invest in the fast-growing sector of online media business the opportunity to take up stakes in KINIBIZ at no transaction cost to these investors. He hoped that as many people as possible will seize this opportunity when it goes live.
KINIBIZ is currently 60 percent owned by Gunasegaram while the other 40 percent is owned by the country’s most popular news website, Malaysiakini. KINIBIZ is operated as a separate news portal focused on business and big picture politics with its own editorial team.
Many exclusives since launch on Feb 19, 2013
KINIBIZ online started on Feb 19, 2013 after staff were assembled on Jan 2 that year, giving a lead time of just over one and half months. Among its many exclusives was the first major investigative article anywhere into 1MDB carried out in March 2013.
This involved an extensive, eight-part report on those behind 1MDB, how it employed dubious fundraising methods that caused the country billions, how it overpaid for assets and how the board was not held accountable for its actions.
KINIBIZ went on to report and investigate a whole lot of other issues including a veiled patronage project - the government’s RM27 billion private finance initiative, the RM40 billion high-speed rail project to Singapore, and the complexities involved in Malaysia Airlines’ turnaround programme, among others.
The main aim of KINIBIZ online is to combine the current breaking and exclusive news with in-depth analysis and commentary - and it is unique in terms of that in Malaysia. The revenue is to come from subscriptions and advertising. KINIBIZ online went on subscription in May 2013, charging RM300 a year.
In April this year, KINIBIZ started publishing the fortnightly KINIBIZ magazine, extending its range of media products to the realm of print. As a magazine, it incorporates the more timeless articles from online into an attractive print format, the idea being to reach the reader through his or her preferred format, whether online or print or both.
Gunasegaram said: “We think the ideal distribution format for news is online but there are those who want analyses and comments as well in the same format. There is a demand for more timeless articles to be in print. We can move between both as necessary.
“We offer one attractive combo package which offers both at just RM318 a year.”
Equity crowdfunding is fundraising that allows start-ups or other smaller enterprises to obtain capital through small equity investments from relatively large numbers of investors, using online portals to publicise and facilitate such offers to crowd investors.
- KINIBIZ
