Crowdfunding emerged at a critical moment in time when businesses and people started to seek out alternative financing sources and conventional options, such as banking or equity investment had dried up.
It’s been less than a decade since crowdfunding was born. And now, it’s hard to imagine this world without it. For business extension and democratized access to funding.
Bay McLaughlin, co-founder of Brinc, a global, ultra hands-on IoT accelerator based in Hong Kong – Asia started adopting crowdfunding from the West, says in his article for the Forbes.
You have probably heard of companies like Kickstarter and Indiegogo and maybe you’ve even backed a campaign or two. Except that, few people know how big a phenomenon crowdfunding has become, especially in Southeast Asia.
Kickstarter and Indiegogo have now set up shop in Asia. They are offering diversification and competitive strategies for crowdfunding that can support both Asian and Western founders and backers alike. I have lived in both the eastern and western hemispheres. In that time I’ve gained a unique perspective on how crowdfunding differs across the world.
China and Other Asian Countries Deliver Their Take on Crowdfunding
On the heels of the Western brands setting up early-mover advantage, many of other crowdfunding platforms have launched worldwide. From those that focus on jumpstarting budding musicians to medical fundraisers and app development campaigns.
JD.com is one of the more eminent crowdfunding platforms to rise in China. This company may not sound familiar to you, because a Chinese corporation known as the Jingdong Group has launched and nurtured this wellspring, for now only for the Chinese market.
In China, enterprises are above all else. It’s practice to have enormous companies partner with smaller ones to increase mass appeal and market entrance. This is likewise a prime example of how China copies Western ideas – and after that enhances them!
Larger platforms are currently coming to Asia to take their share of an increasingly lucrative market. The open door for Asia and crowdfunding emerged when Western companies were not able to satisfy orders guaranteed to their sponsor.
Asian business people, particularly in the hardware or Internet of Things (IoT) verticals made the simple choice to launch their own platforms and make the products they needed locally. Funny right? A lot of the products you now see on the Western crowdfunding platforms are actually Asian companies, often manufacturers, disguised as Western startups.
But delivering the hardware that Western founders cannot is not the only story here in Southeast Asia. An article for Crowdfund Insider noted the significant growth of equity crowdfunding in Southeast Asia stimulated by government administrative changes. These progressions have opened the doors to help the growing areas of small-medium enterprises (SMEs), among these eleven countries, defeat the present funding gap.
The Southeast Asian countries with the most development in crowdfunding incorporate Indonesia, Thailand, Singapore and Malaysia. CrowdCrux additionally noted many Chinese sites with this purpose that are starting to appear in addition to JD.com. Among them are DemoHour, AngelCrunch, Dreamore, Fundator and CTQuan. Korea has also passed crowdfunding regulation and entered the scene in 2015 with Tumblbug.
The Power and Influence of Asian Crowdfunding
To illustrate how powerful Asian crowdfunding platforms have turned into, let’s look at a few statistics on Kickstarter and Indiegogo. When Indiegogo started in 2008 it had $56.5 million in venture capital dollars and Kickstarter mentioned $10 million. JD.com has raised $491 million. It’s essential to say that the way Chinese companies fund, back, and launch businesses are totally different than the West. JD.com is open, invests into other businesses and also raised a $1 billion USD financing fund to help, among other things, startups! In short, the crowdfunding playing field is going from the little leagues to the big leagues… FAST!
With reasonable alternatives now available in Asia, it it outlines what development crowdfunding can achieve in this region. And shines a light on why the larger Western crowdfunding brands are trying to enter the Asian markets. The idea is that these Western brands want to attract Asian founders to cross-list their products on their platforms.
Asian crowdfunding companies are additionally attempting to deal with how they can attract western creators and backers for their platforms. However, it remains difficult, especially post delivery, to oversee and support backers as the cultural gap between the East and the West is still huge.
Exciting Opportunities Ahead
Different sorts of sites have launched, including RocketHub, GoFundMe, Razoo, Crowdrise, and Crowdfunder and at my company, Brinc.io, we effectively test each platform we can. While it is hard to anticipate the future for these Western crowdfunding platforms in Asia, the general forecast is that they will do well. Particularly in the more Western-influenced countries, such as Hong Kong, Singapore, and Japan. What is clear is that the financial needs of new products and startups will keep on pushing the financial sector forward. I firmly believe we will see a gigantic adoption of equity crowdfunding after another year or two of growing pains and that Asia will be the biggest market by a genuine margin.
I will keep following this and am always happy to connect and talk more about Asia to SF, startups, investing, Hardware and IoT, says Bay McLaughlin.