Best P2P Crowdfunding Platforms for Investors 2018

Crowdfunding, raising money from a large number of investors, is an emerging financing method for many companies. It allows companies to avoid the time burden, financial costs, and other limitations of traditional financial institutions. We've reviewed several online P2P crowdfunding platforms in Singapore, to allow investors to compare returns, fees, and features of the most distinguished set of offerings.

Best P2P/Crowdfunding Investing Platforms

Investors in SME crowdfunding markets have the opportunity earn high returns by lending to small businesses that were traditionally only serviced by financial institutions. Often, these investments have the potential to combine great yields with relatively low risks. Below, we highlight three of the best platforms for SME crowdfunding investing.

Best Performance Track Record: Funding Societies

Consider this if you prefer a platform with strong performance record, high asset quality, and low fees and minimum investment requirement

Investor Service Fee 18% of interest earned
Typical Returns up to 12 - 25%
Min Investment Requirement S$50
Investment Horizon 1 - 24 months

In our view, the Funding Societies platform offers investors one of the best crowdsourcing options for SME loan and invoice financing investments. Funding Societies boasts the highest asset quality and the best track record. For instance, its default rate of 1.3% is closer to those of high quality commercial banks than those of P2P lenders that are typically considered to be riskier. Funding Societies has also closed the most deals in Singapore of all P2P crowdfunding platforms. Additionally, for investments yielding less than 15% with durations shorter than 6 months, Funding Societies' fee of 18% of interest earned is lower than MoolahSense's fee of 1% of all repayments received.

Graph showing the Minimum investment per financing campaign requirement of five major P2P platforms in Singapore. Funding Societies has the lowest required investment per campaign of S$50

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. Additionally, Funding Societies' fee, minimum initial investment, and minimum investment per campaign are lower than almost all other platforms, allowing all types of investors to participate.

Highlights

  • 89% on time payments
  • Default rate: 1.3%
  • Raised over S$110 million for 2,100+ loans
  • Returns (Effective Interest Rates): 16 - 30%
  • Highest transparency in terms of data it provides to investors
  • Management invests with clients
  • Read Our Full Review

Best No-Fee Platform: KapitalBoost

Consider this if you are interested in collaterally-backed asset purchase investments, while pursuing strong returns and avoiding costly fees

Investor Service Fee None
Typical Returns 15 - 24% based on profit
Min Investment Requirement S$500
Investment Horizon 1-12 months

KapitalBoost is an Islamic P2P SME crowdfunding platform that offers the added benefits of and stringent ethical standards. 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.

Highlights

  • Repayment security due to Asset Purchase Financing
  • No Investor Service Fee
  • Ethical investing: avoiding funding environmentally harmful or vice-related SMEs
  • Read Our Full Review

Best Long-Term Crowdfunding Investing Platform: MoolahSense

MoolahSense

Consider this if you are interested in SME crowdfunding investments without costly fees and large minimum investment requirements

Investor Service Fee 1% on all repayments
Typical Returns up to 12 - 24%
Min Investment Requirement S$100
Investment Horizon 1 - 24 months

MoolahSense is one of the best crowdfunding investing platforms for SME business loans and invoice financing due to its low fees. The platform charges a 1% investor service fee on all repayments received, which is among the lowest in the crowdfunding market. This is especially the case for medium to long-term investments (loans 6 months or longer). For long term investments that tend to yield 12-24% of return, Moolahsense's fee is lower than even that of Funding Societies.

Column chart comparing the Investor Service Fee (as a percentage of investment)  given a 15% annualized rate of return. MoolahSense's fee is cheaper than Funding Societies' fee with durations of 6 months year or longer

Its minimum starting investment and investment per campaign are also among the lowest available, which gives many individuals the opportunity to invest. One drawback, however, is that Moolahsense's default rate of 3.48% is a bit higher than Funding Societies'.

Highlights

  • Lowest investor service fee of 1% on repayments
  • Low minimum investment per campaign: S$500
  • Default rate: 3.48%

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

Consider this if you prefer investing in early-stage startups or list-co bonds

Investor Service Fee Unknown for equity, None for list-co bonds
Typical Returns Unknown
Min Investment Requirement S$5,000, must be an accredited investor (net personal assets > S$2 million, annual income > S$300,000) or approved professional investor (S$100,000 annual income & suitability test)
Investment Horizon Unknown

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.

Highlights

  • 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

Late-Stage Equity Crowdfunding Platform: Fundnel

Consider this if you are interested in equity investments in a select group early - late-stage startups

Investor Service Fee Unknown
Typical Returns Unknown
Min Investment Requirement Must be accredited investor (net personal assets > S$2 million, annual income > S$300,000)
Investment Horizon Unknown

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).

Highlights

  • Invest in early to late stage startups via equity, convertible bonds, revenue sharing or debt
  • Highly selective: 10% of applicants are accepted and only 3% receive funding

Best Real Estate Crowdfunding Platform: Investacrowd

Consider this if you want to invest in real estate

Investor Service Fee Unknown
Typical Returns 8 - 18% / 20 - 40%+ IRR
Min Investment Requirement S$100,000, must be accredited investor (net personal assets > S$2 million, annual income > S$300,000)
Investment Horizon 3 - 36 months

Real estate investments allows investors to invest in tangible assets with longer term investment horizon. For investors who are interested in investing in real estate, Investacrowd is the best crowdsourcing platform. According to our research, Investacrowd is the only crowdfunding platform in Singapore that provides access to short and long-term debt and equity real estate investments with competitive rates. It also presents real estate investment opportunities in developed markets around the globe, like New York, London, Sydney, Hong Kong, and Singapore.

Highlights

  • Investment opportunities in real estate around the globe
  • Debt investments earn annual rates of 8 - 18%
  • Equity investments in real estate companies earn IRR of greater than 20 - 40%
  • Read Our Full Review

Summary Table

PlatformHighlights
Funding Societies
  • Lowest default rate
  • Strong performance track record
  • Platform shares incentives with investors
MoolahSense
  • Low fees
  • Low minimum investment per campaign
KapitalBoost
  • No investor service fee
  • Security/collateral required
FundedHere
  • Invest equity of early stage startups
  • Invest in list-co bonds without brokerage fees
Fundnel
  • Highly selective pool of early - late stage startups
Investacrowd
  • Real estate equity or loans at competitive rates

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 1 - 4%. Prospective investors may want to also compare 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 - 20% of interest earned.

Methodology

We gathered information available online for as many Singaporean P2P/Crowdfunding platforms as we could find. Below is a list of companies that we considered in our analysis of the best P2P/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

William Hofmann

William is a Senior Research Analyst at ValuePenguin Singapore, focusing on banking and SMEs. He previously was an Economic Consultant at Industrial Economics Inc.

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