The investment-based crowdfunding industry in Singapore got a boost today when Song Fa Bak Kut Teh announced it had raised S$500,000 (US$370,000) through the business financing platform New Union.
The deal’s significance does not lie in the money — S$500,000 (US$370,000) is no longer newsworthy for crowdfunding campaigns — but rather the brand partaking in this investment strategy.
For those unaware, Song Fa is a brand widely recognisable throughout Singapore. Its legacy stretches back to a pushcart on Johor Road in 1969 and it has six branches across the city today. Even the bellwether entree — bak kut teh — is seeped in the history and tradition of Singapore and Malaysia.
Having a food and beverage (F&B) company with a long history, a strong reputation and a stable business cast an eye towards investment crowdfunding accords a certain validation that the strategy can cross into what laymen might consider the ‘established’ industries.
The restaurant is hoping to expand both locally and internationally and the investment is part of Song Fa’s need to raise growth-stage financing.
“The funding will also enable us to leverage on technology to upgrade our supply chain IT all the way from procurement to point of sales. This will upgrade our productivity and build the business to optimal efficiency,” said Yeo Hart Pong, the Managing Director of Song Fa and second-generation owner, in a statement.
While traditional F&B companies are always keen to on-board the latest back-end software, or introduce tablets for ordering, Song Fa is an early adapter in using technology for investment purposes.
And for New Union, besides the aforementioned validation, it diversifies the crowdfunding platform’s user base, which at this point consists mainly of real estate contractors, SME owners looking to boost inventory and trading companies in need of working capital.
As of publishing, New Union has facilitated about S$897 million (US$662 million) worth of investments through its platform regionally and over S$38 million (US$28 million) in Singapore.
New Union was established in 2013 and has a presence in Cambodia, China, Singapore and Taiwan.
On a macro-level, for the investment crowdfunding industry, today’s announcement comes weeks after the city’s Central Bank, the Monetary Authority of Singapore, released updated regulations to ease the barrier-to-entry for crowdfunding platforms. But, it also stated that operators would require a Capital Markets Services license.
“This is a good move for the crowdfunding industry as there will be a clear framework for platform operators to follow. We are already in the process of the CMS license application. Once we get it, we will be in a much better position to support the fundraising needs of local SMEs,” said New Union Group CEO Eddie Lee in a statement.
Today, e27 reported that another loan crowdfunding platform, Funding Societies, temporarily shut down its loan terms in a proactive measure to avoid disciplinary action while it applies for the license.
So this evening, as the family sits down for some ‘meat bone tea’, pause for a moment and recognise that even the trade of stewed pork can integrate technology into a future-forward business.
Photo courtesy of New Union.