Sinwattana Crowdfunding Corporation sees long-term growth potential for the local crowdfunding market in future decades, expecting a 10-year capital gains tax exemption for investments in Thai startups under 12 target industries to motivate entrepreneurs and investors.
As Thailand's leading crowdfunding portal, the company aims to leverage the levy exemption to attract foreign investment to Thai small and medium-sized enterprises (SMEs) and startups.
The firm is also preparing for the launch of Global Investor Exchange Forum in March 2023, where up to 350 small business participants are expected from 20 countries.
The cabinet approved on June 20 a royal decree to waive capital gains tax for investment in startups associated with 12 targeted industries.
The targeted industries comprise modern automotive, electronics, tourism and health tourism, agriculture and biotechnology, food processing, industrial robots, aviation and logistics, biofuels and biochemical, digital and comprehensive medicine, defence, people development and education.
The Digital Economy and Society Ministry expects this tax exemption will incentivise foreigners and locals to invest in SMEs and startups, causing funding for Thai startups to surpass 320 billion baht by 2026.
The ministry projects growth in the startup market to increase job opportunities for both direct and indirect employment, strengthening the country's economic system.
THE POWER OF SMALL
According to Sinwattana Crowdfunding Corp, more SMEs are seeking to raise capital to support their growth and expansion both locally and internationally via equity and debt crowdfunding portals. The company receives numerous requests daily from startups and SMES in active sectors like food, health and technology, said chief executive Hong Sin Kwek.
Ms Kwek said the company gained strong support from various industries, as well as successful experience offering its advisory services and support to several SMEs the past few years.
She said Sinwattana recently worked with SMEs that have good track records, profits and a promising growth rate.
More SMEs are considering crowdfunding as part of their financing to beef up their industry engagement and explore international market spaces, said Ms Kwek.
In addition to entrepreneurs, she said increased demand for crowdfunding is spurred by investors interested in alternative finance who enjoy taking part in shaping the future economic landscape, even if they only have a tiny share.
Sinwattana's success helps all SMEs and gives investors satisfaction and pride in their investments, said Ms Kwek.
SUCCESS STORIES
According to company data, more than 15,000 users have registered for services on the portal, of which 3,000 are active investors and 700 are high net worth and very active investors.
Since its inception in 2013, the company has served as a crowdfunding portal for six successful funding projects worth a total of 87.8 billion baht, including a project with EATLAB, a marketing strategist for SME restaurants that uses artificial intelligence (AI) technology, worth 17.2 million baht.
Another project was with Jaka Corporation, a trading company of game consoles, game CDs and game accessories, worth 5.2 million baht.
The other projects are with an upskilling hub; Wealthi Techfin, AI-based alternative micro-finance service provider on mobile; Harrison Butcher, a professional butcher shop in Bangkok; and Wisible Company Ltd, a sales intelligence platform.
Ms Kwek said eight projects are in the pipeline and the company aims to wrap up 16 projects worth a total of 1-2 billion baht for 2022.
She said one of the biggest upcoming projects is with 88 Cannatek, a licensed cannabis business founded by an industry expert and advisor to the Public Health Ministry on cannabis and hemp.
The company has a farm in Chiang Rai that completed its third harvest and is approaching the fourth, with a strong network of more than 25 contract farmers across the country.
88 Cannatek also partnered with the Department of Thai Traditional and Alternative Medicine for the oversight of extraction factories and sales of extracted CBD oil and wellness hemp products.
HOPEFUL SEEKERS
Another firm seeking fundraising through the portal is CMW Foods Support, a provider of on-demand meat cutting and supplying services aimed at reducing food waste.
Also looking for funding is eatsHUB, a superapp that collects food order data and lifestyle choices to design ads using a variety of data technologies. The company is backed by the Digital Economy Promotion Agency under the "National Delivery Platform Development Project" to go regional.
Bakeologist, a bakery factory with its own brand called "Shiba Jung" that produces a twisted bread with ice cream or cream fillings, is aiming to seek crowdfunding.
Another entry in the pipeline is Factorium, a global leader in mobile CMMS software and machine and facilities maintenance management systems. It uses machine data integration and analytics that effectively address machines' availability to cut downtime and save on costs for factory owners.
The company has more than 200 clients, including local factories and multinational companies in Thailand. Factorium is planning to expand to Indonesia, Malaysia and Vietnam.
Famme Works, an AI-enabled cloud-based automated pressure injury prevention system with high-end medical sensor technology created by a Thai doctor, was recently adopted by few chain hospitals in Thailand. The system has won several awards nationwide and the company is also seeking funding via the portal.
House of Dev Technology, a software house specialising in enterprise resource planning (ERP) systems, has provided various customised systems for both governmental organisations and private enterprises. The company is developing its own product line covering all ERP technologies.
House of Dev's first product is VERSCAN, an asset tracking software with large corporate customers such as the Electricity Generating Authority of Thailand. The company is also seeking to raise crowdfunding.
World Reward Solutions (WRS) is an innovative solutions platform for high-end loyalty and privilege programmes servicing top corporations in Asia. WRS Group is a corporate group of businesses that has helped affluent clients and corporations source and manage services for more than 15 years.
The group is planning to expand to Malaysia, Indonesia, Cambodia and Vietnam by 2023 and is eager to raise funds via the portal.
UPCOMING EVENT
Sinwattana is planning to host the Global Investor Exchange Forum in March 2023 and expects 200 to 350 SMEs and startups from 20 countries around the world.
"There will be more information on the forum released in the coming weeks and months as we work towards finalising our partners and supporters," said Ms Kwek.
"This is an exciting event where we welcome collaboration between all SMEs, startups and investors, both locally and internationally."
The company is also launching "$investors Club", a platform for investors providing a curated list of SMEs with high potential for growth and international expansion.
The platform aims to help investors by offering exclusive previews on investment opportunities, while developing a strong investment terrain for Thai SMEs to go global, she said.
Services on the platform are free of charge.
