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InVent, the venture capital arm of InTouch Holdings, has invested in a pre-Series A financing round for PeerPower, a digital crowdfunding and peer-to-peer lending platform that connects businesses with investors.
PeerPower is the first company in Thailand to issue crowdfunding bonds approved by the Securities and Exchange Commission.
"In 2019, small and medium-sized enterprises [SMEs] made up 43% of GDP and 85% of employment, based on data from the Office of Small and Medium Enterprises Promotion," said Narongpon Boonsongpaisan, head of InVent. "One of the challenges facing SMEs today is timely access to financing."
InVent saw an opportunity to solve the financing gap for SMEs through the use of technology and product innovation, empowering business owners to strengthen their capabilities and grow their business, said Mr Narongpon.
Crowdfunding bond issuers provide quarterly financial updates to investors, facilitated by PeerPower. Recent crowdfunding bond issuers on PeerPower include businesses involved in media, food production, software and a rock climbing gym.
PeerPower will continue to provide financing access to business owners, including high-growth and mid-cap companies. Eligible businesses can raise funds through PeerPower's crowdfunding platform with interest rates ranging from 6%-22%, depending on their PeerPower assessed credit grade.
"At the heart of PeerPower's mission is to finance the creation of equality," said Vorapon Ponvanit, chief executive of PeerPower. "Last year, 2.3 trillion baht in unrated bonds were issued in Thailand. This presents a significant opportunity for SMEs. In the past, bonds used to be accessible only to large companies. Now SMEs can issue crowdfunding bonds through PeerPower."
PeerPower will use funds from InVent to invest in product development and broaden the digital financing services it offers.
"In this digital era, business models are rapidly evolving over time," said Oranuch Lerdsuwankij, chief executive of Techsauce Media, a bond issuer on PeerPower. "PeerPower is meeting the changing demands of a new generation of business owners, with proprietary credit models, tech platforms and responsive customer service."