ECF Startup LandX Eyes Quality SMEs to Get Alternative Funding

Startups equity crowdfunding (ECF) LandX targeting more quality SMEs to obtain alternative funding other than applying for loans to banks. This year the company is targeting between 30 and 50 SMEs which can be facilitated with funding from public investors.

In a press conference held by the company yesterday (4/5), LandX Co-Founder & COO Romario Sumargo explained, although the number of SMEs targeted was not large, he wanted to ensure that every SME recruited had quality business with good prospects. Because this is also related to investor protection for the funds entrusted to LandX.

“Though it sounds a bit because of based on What we have done, on average, SMEs have managed to raise more than IDR 5 billion in funds. Once penetrated at Rp10 billion. Based on the nominal, we are targeting this year to reach Rp150 billion-Rp180 billion, which could be the number one ECF in Indonesia," said Romario.

LandX has actually only been operating for about four months, since it received a permit from the OJK on December 23, 2020. Although still new, the company claims to be able to control 65% of the market share of the ECF industry in Indonesia in Q1 2021 based on nominal funding.

As of May 4, 2021, LandX channeled 11 SMEs to raise funds with a total value of IDR 52,09 billion. On average, SMEs raise funds in the range of IDR 5 billion to IDR 7 billion. The total registered investors reached 35.139 people with an average investment of IDR 10 million.

Romario said that SMEs that use LandX are engaged in various industries, such as: facility service management, restaurants, boarding houses, coal fertilizer factories, and cloud kitchen. To attract quality SMEs, basically these SMEs are already in the form of a PT, understand financial reports, and can make business projections.

“To find a good business, our strategy goes back to the manual. Look for a branch that is always busy, then go to the owner, or get a referral from the community.”

Within this year, continued Romario, LandX plans upgrade license to be SCF (crowdfunding securities) in the upcoming Q3 in order to capture wider business potential. The issuers of shares allow not only to offer stock securities, but also to offer debt securities, sukuk, and others.

Meanwhile, to explore secondary markt, since the SME portfolio has not yet reached one year, the plan can only be realized next year. "Around July we will start the licensing process at OJK for upgrade to SCF."

As of now, there are four ECF players who have obtained a business license from the OJK. They are Santara, Bizshare, CrowdDana, and LandX. Meanwhile, in membership at Indonesian Crowdfunding Service Association (ALUDI), already has 22 members. Among them, FundEx, danasaham, Byznis, Prodana, Seed Bersama, Greenfund, Urunmodal, Udana, Shafiq, and others.