Best Performance Track Record: Funding Societies
- Default rate: approximately 1%
- Raised over S$800 million for approximately 1 million loans
- Optimal Incentives: Management invests with clients
Funding Societies' platform is a leader when it comes to investing in crowdfunded SME loans and invoice financing. The platform boasts the best track record with great returns and low default rates. For instance, its all-time default rate of about 1% is closer to those of high quality commercial banks than those of P2P lenders, which are typically considered to be riskier. Funding Societies has also closed the most deals in Singapore of all crowdfunding platforms.
Furthermore, Funding Societies is unique in that its founders and employees invest in the same opportunities as investors, which aligns their incentives with retail investors and ensures their investment portfolio is closely filtered. Finally, Funding Societies' is accessible to all types of investors given that its minimum investment requirements are lower than almost all other platforms.
Best Short-Term Crowdfunding Investing Platform: Minterest
- Competitive Investor Fee: 15% of interest earned
- Low Default Rate: 0.68%
- Short-Term Investments: Up to 12 months
Minterest stands out as a great, low-fee crowdfunding platform for investors in Singapore. The platform, which specializes in short-term investments, charges a low investor fee than many of its competitors (15% of interest earned). Minterest also has attractive opportunities, with a default rate of just 0.68% in 2018 and 97% of its deals funded within 1 day.
Best No-Fee Platform: KapitalBoost
- No Investor Service Fee
- Ethical investing: avoiding funding environmentally harmful or vice-related SMEs
- Repayment security due to Asset Purchase Financing
KapitalBoost is an Islamic crowdfunding platform that offers the added benefits of and stringent ethical standards. Additionally, Kapital Boost's Asset Purchase Financing is safer for investors because it indicates that the borrower has a specific financing need to acquire specific equipment. Kapital Boost is also the only crowdfunding platform in Singapore without an investor fee. Together, these factors provide investors with a great platform for investors that wish to invest in SMEs while pursuing high returns without investor fees. Additionally, the minimum investment required is also among the lowest of all platforms.
Best Equity Crowdfunding Investment Platforms
Equity investments present investors with the exciting prospect of owning a share of a potentially high-growth startup, which entail both high risk and high return relative to debt investments. Here, we review two of the best options for crowdfunding equity investment platforms in Singapore.
Early-Stage Equity Crowdfunding Platform: FundedHere
- Invest in equity in early-stage startups for as little as S$5,000
- Invest in bonds of publicly listed companies (SGX) without brokerage fees
FundedHere allows investors to invest in equities of early-stage startups or in debt of publicly listed companies. For as little as S$5,000, investors have the rare opportunity to purchase equity in early-stage startups. The platform also requires startups to meet revenue and operational requirements, which gives investors a stronger set of investment options.
Finally, FundedHere's ListCoBond allows investors to invest in bonds for publicly listed companies on the Singapore Exchange (SGX) without brokerage fees.
Late-Stage Equity Crowdfunding Platform: Fundnel
- Invest in early to late stage startups via equity, convertible bonds, revenue sharing or debt
- Highly selective: Only 3% of business applicants receive funding
Fundnel allows investors to invest in a curated set of startups, ranging from early to late stage, via Equity, Convertible Bonds, Revenue Sharing, or Bond/Debt Structure. Fundnel subjects startups seeking financing to a highly selective application process; only 10% of applicants are accepted and only 3% receive funding. This gives investors a pool of competitive businesses to consider. Fundnel has completed 22 deals totaling more than $100 million (USD).
How to Compare Crowdfunding Platforms
Proper research and analysis is required for choosing between crowdfunding platforms. When comparing platforms it is important to consider factors that impact expected returns. First, investors should understand the potential risk and return profile associated with the types of investments offered by each platform. For example, lower risk investments, such as invoice financing and asset purchase loans, tend to offer lower returns than riskier opportunities, such as equity investments.
Investors may also find it helpful to review statistics detailing the performance track record of each platform. For example, the best platforms offer default rates as low as 0 - 3%. Prospective investors may also want to also compare the percentage of on-time payments and total number and volume of deals completed. It is prudent to invest with platforms that openly provide information about their performance on their website or from their customer service teams. Fees are another important factor to consider, as they can significantly decrease your net returns. Some platforms charge no fees, others charge 1 - 8% on all repayments received or 18 - 25% of interest earned.
We gathered information available online for as many crowdfunding platforms as possible. Below is a list of companies that we considered in our analysis of the best crowdfunding Investing Platforms. We gathered data that would be most relevant to potential investors: platform performance (default rates, total completed loans), investor requirements (investor fees, minimum investment, net worth, annual income) and estimated returns. If you are looking for information on crowdfunded business loans, see our Best SME Loans page