After its year-long nationwide roadshow, the Securities and Exchange Commission (SEC) reported that it was able to successfully introduce the capital market as an accessible funding source for small businesses, thus generating millions in capital for hundreds of small businesses in the Philippines.
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According to the SEC, 1,584 companies have since registered as issuers with licensed crowdfunding intermediaries such as Investree Philippines, SeedIn Technology, Inc., and Eastern Securities Development Corporation (Round One).
Of this total, 333 have successfully raised capital totaling P1.94 billion for 1,143 projects. This comes just three years after the first crowdfunding license was approved by the SEC in December 2020.
Raising capital through crowdfunding
In 2023 alone, 146 companies have raised capital totaling about P427 million for 1,114 projects through crowdfunding.
Of this year’s issuers, 37 companies were participants in the recently concluded 2023 Roadshow on Capital Formation for Micro, Small and Medium Enterprises (MSMEs) and Start-ups.
Meanwhile, 314 more companies have expressed interest in raising capital through crowdfunding, after participating in the roadshow spearheaded by the SEC Office for the Advancement of Strategic Investments in SMEs (OASIS) in Baguio, Tarlac, Manila, Legazpi, Cebu, Iloilo, Bacolod, Tacloban, Davao, Cagayan de Oro and Zamboanga.
“The SEC transformed the capital market into a more accessible financing oasis for small businesses, as our year-long nationwide roadshow proved to be a success in attracting MSMEs and startups toward innovative fundraising options,” SEC Chairperson Emilio B. Aquino said.
“This is just the beginning, as we have also launched Call-a-Friend and Engage with SEC, a channel for roadshow attendees to connect with crowdfunding intermediaries and exchanges to discuss the most appropriate financing option for them. This way, the SEC makes sure that small businesses grow and thrive amid the challenging environment in the modern age,” Aquino added.
SMBs that have successfully tapped crowdfunding for expansion
One of the small businesses that have successfully tapped crowdfunding to finance their expansion is Tipaklong Sustainable Mobility Corporation (TSMC), a bike-sharing company. Tipaklong Founder and President Arnold Bufi noted how its introduction to Round One’s crowdfunding platform had been pivotal in realizing the company’s vision of providing sustainable mobility to Filipinos.
“After several months of pitching, both online and off-line; attending roadshows; and hand-holding our early investors, we were able to reach 100% of our target on December 4,” said Mr. Bufi.
“The capital raised from crowdfunding will supplement the capital raised from Tipaklong’s private placement efforts,” Mr. Bufi further stated, noting how the funds will be able to help them launch a new project in 2024.
Michelle Van Gardose, owner of the one-person corporation MVGardose Trading OPC, also shared how crowdfunding opened up more avenues for her to grow her business. “Investree is now like the backbone of our business, as it has played a huge part in our operations by widening my financial capacity, which has helped me generate more transactions and reach more clients,” she shared.
For makeup company Ellana Cosmetics, crowdfunding helped it gain access to capital and was a source of financial guidance in expanding its business.
“[SeedIn] provided excellent financial guidance, helping us to access more than P80 million of financing support. We highly recommend them to any company looking for financing,” said Diego Buanaflor, chief executive officer of Ellana Cosmetics.
Other alternative financing options
Aside from crowdfunding, the nationwide OASIS roadshow highlighted financing options through the Philippine Stock Exchange (PSE) as part of the Commission’s 888@88 goal. Under this goal, the SEC targets to have at least 888 companies tap the capital market in time for its 88th anniversary in 2024.
The roadshow generated a total of 10 new leads for listing in the PSE, promising a healthy pipeline of capital-raising activities next year.
Following the success of the roadshows, the SEC also launched Call-a-Friend and Engage with SEC (CAFE SEC) program. This program will serve as a channel for participants of the roadshow to reconnect with their crowdfunding intermediaries and the PSE for inquiries that pertain to their financing needs, as well as for additional information on capital market-based products and services.