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Singapore crowdinvesting startup CoAssets has poured cash into Chinese crowdfunding startup Da Xian Bing, the company announced yesterday, buying a 10 percent stake for US$146,000.
The deal gives CoAssets access to Da Xian Bing’s over 300,000 users who are well versed in crowdfunding.
CoAssets CEO Getty Goh tells Tech in Asia the company selected Da Xian Bing because of the latter’s strong presence in Southeastern China and ties to major sponsors. “We have done our due diligence and assessed that their user base is very similar [to ours]. Hence, they can easily cross over and become investors on CoAssets’ China platform,” he says.
It’s one way for CoAssets to gain a larger foothold in China.
A significant difference is that CoAssets is a platform for users to invest into real estate and small businesses. Da Xian Bing, on the other hand, is much more product-focused, like western websites Kickstarter and Indiegogo. It also offers a personal finance product.
Even so, Getty is confident CoAssets can entice users to its own service. Whether it’s through user experience (enabling dual signups for people who visit both platforms) or through a marketing push (letting users know about CoAssets and how it ties up with Da Xian Bing through newsletters and blog posts) the company wants to make it as easy as possible for people to check it out.
CoAsset’s EPIC series of conferences – the acronym stands for Expo for Property Investing and Crowdfunding – also plays a major part. The November 2016 conference in Fuzhou, China, featured the local startup in a big way, highlighting the warmer relationship between the two companies.
From February 2017, the two services will start sharing technology as well.
The deal is one way for CoAssets to gain a larger foothold in China. The company also entered into a joint venture with Chinese real estate development company Fujian Yaosheng Zichan in November 2015. CoAssets owns a 40 percent stake in the joint venture, which lets the Chinese firm put CoAssets’ platform to use for its property developments in Fujian and neighboring provinces.
“Our strategy for China is constantly evolving due to the huge market size and dynamic landscape,” Getty says.
Screenshots of Da Xian Bing’s website.
Opportunity knocks
Crowdfunding is considered a young space in China, although the market opportunity is huge. The World Bank reported in 2013 that funds raised in the country would reach US$50 billion by 2025.
Some of China’s largest players dabble in crowdfunding, like Alibaba’s Yulebao (part of the Taobao marketplace) and Coufenzi by arch-rival JD. Other crowdfunding sites include veteran Demohour and a multitude of crowdinvesting services.
In such a competitive market, CoAssets will have to work hard to build traction. Getty believes this starts with trust – especially after a spate of scandals in the country.
Last year a US$7.6 billion online loans startup turned out to be a Ponzi scheme, rocking China’s crowdinvesting market and resulting in the government cracking down on fintech startups in which people are asked to invest their cash.
“By positioning ourselves as a regional player that is listed in Australia, the trust in our platform is significantly higher,” Getty opines.
The company’s reliance on analytics to match users to potentially interesting deals is also one way he feels CoAssets can stand out.
CoAssets listed on the Australian Securities Exchange in September, raising US$5 million. It reports over 70,000 registered users, of whom over 56,000 are in Singapore, around 12,000 in China, and over 2,000 in Australia. It’s not revealed how many active users the startup has. Getty says the company registered a 16 percent growth in its Australian user base over the last quarter.
Converted from Chinese RMB. US$1 = RMB 6.8
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