South-east Asian crowdfunder eyes mortgage market

Prior to listing on the ASX this week, crowdfunding platform CoAssets told Mortgage Business about its plans to disrupt the Australian lending space.

The Singaporean company connects property developers and SMEs to those looking to earn a return by lending to them, claiming to be the leading debt crowdfunding platform in south-east Asia.

Australia is a key part of its ambitious expansion plans. CoAssets raised $6.55 million in an IPO and debuted on the ASX on Monday valued at $66 million.

Given the recent lending restrictions imposed on certain borrowers by the big banks, Mortgage Business asked CoAssets founder and CEO Getty Goh if the platform could become an alternative for property developers.

“We have seen projects coming to us from Australia. As far back as two or three years ago we saw this trend with people looking for alternatives,” Mr Goh said.

“All developers are business people. Being the savvy business people that they are, they are always out to look for cheaper alternatives — cheaper materials, cheaper construction costs and cheaper funding.”

The move towards alternative lending platforms like CoAssets is a growing trend that Mr Goh is confident will continue. The Singaporean entrepreneur says moving into mortgages “makes sense” for crowdfunding platforms, though the company has no plans to do so just yet.

“There are some considerations of whether crowdfunding could slowly move over into the space of providing mortgages to people who need them. When you think about it, it is a very natural progression,” he said.

“I wouldn’t say it is something we are actually pursuing, but as a thought it makes a lot of sense. These are just some of the considerations we have.

“We envisage not only CoAssets but other platforms, alternative funding spaces like ours coming in and ultimately giving the end users and consumers more say in terms of the type of interest rates they want and really let it be driven by the market.”

The company specialises in debt crowdfunding for real estate and SMEs looking to fill the S$100,000 to S$5million funding gap.

The actual crowdfunding is done via a unique facilitation platform, which allows developers and businesses to list investment opportunities online and for registered users to have the ability to view, research, and ultimately invest in real estate or SME debt instruments.

The group’s Perth-based executive director, Daniel Smith, explained that working with intermediaries — mortgage brokers, accountants and financial planners — is something CoAssets decided to do quite early on, both in Singapore and in Australia.

“Rather than us going out and employing 10 or 20 business development managers and trying to drum up flow from both borrowers and lenders, we realised we should be going to mid-tier accounting firms or financial planners or mortgage brokers,” Mr Smith said.

He added that CoAssets has already held discussions with online SME lending engine Valiant Financial and major aggregator Vow Financial.

[Related: Is the mortgage industry ready for disruption?]

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