SINGAPORE (July 31): FundedHere, the Singapore-based crowdfunding platform, on Tuesday launched FundedX, a secondary broker platform that facilitates the trading of shares in high-growth startups and privately-held companies in Southeast Asia.
FundedHere established this platform with the aim to transform the Southeast Asian private market by creating new opportunities for investors and providing much needed liquidity for shareholders of privately-held companies in the region.
In typical fragmented secondary sales market, investors are required to go through a tedious process to buy and sell shares, as they have to connect directly with intermediaries, company secretaries and share registrars.
With FundedX, these friction are removed by supporting the end-to-end process from connecting companies to a global investor base, to assessing shareholders and interested buyers, to taking on administrative burdens, and providing the transaction framework.
FundedX will allow legacy shareholders, such as ex-employees and early investors to monetise their returns. Employees with stock options may also submit verification of ownership to participate on the exchange and seek partial liquidity.
Interested investors can then submit requests to buy these shares, which will be processed through FundedX’s algorithm to match transactions.
Once the shareholders and investors are paired on the platform, the company, whose shares are being transacted, will then need to approve the sale and deal terms for the transaction go through. This whole process is aimed to be completed within two weeks.
Unlike a private stock exchange, the platform is merely one where buyers and sellers can register their interests to buy or sell a particular company stock at the pre-determined price set by FundedX. The buyers and sellers will not be able to negotiate on the share price of the company, which means that there is not a process of price discovery and formation on the FundedX platform.
Each transaction that takes place is ad-hoc and no continuous trading happens on the platform, making it somewhat of a matching platform.
Furthermore, smart contracts powered by blockchain technology may also be featured in the platform for safer and more cost-efficient trade.
In a media release issued on Tuesday, the company says that it intends to go live with its first transaction within three months.
Daniel Lin, co-founder and executive director of FundedHere says, “FundedX is a game changer that will help to bring much needed liquidity to the private market. We see this new platform as a complementary and natural extension of FundedHere’s current offering that will support yet another key stage of the funding cycle for emerging companies.”
Update on Aug 2 : FundedHere has clarified that FundedX is not a "private stock exchange" as claimed by certain media outlets.
In a statement issued to the press on Thursday, FundedHere said: "The Monetary Authority of Singapore (MAS) has brought to our attention that the articles published by the press, containing the words 'private stock exchange' and 'bourse', may cause the markets to have a misconception that FundedX is a market operator and therefore has a licence as either an approved exchange, a Registered Market Operator (RMO) or an Exempt Market Operator (EMO).
"FundedHere wishes to clarify that the platform is merely one where buyers and sellers can register their interests to buy or sell a particular company stock at the pre-determined price set by FundedX."
FundedHere noted that buyers and sellers will not be able to negotiate on the share price of the company. "This means that there is not a process of price discovery and formation on the FundedX platform.”