Singapore MAS-licensed P2P lender Crowd Genie launches ICO

• Granted a MAS ‘Dealing in Securities’ license in March 2017
• One of the ICO features is a quarterly coin buyback using 80% of distributable profit

CROWD Genie Financial Services Pte Ltd (Crowd Genie) operator of a Peer-to-Peer (P2P) lending platform licensed by the Monetary Authority of Singapore (MAS), looking to build an Asia-wide exchange of financial assets, announced the launch of its Initial Coin Offering (ICO) public sale., through its related entity CGSPV Pte Ltd (CGSPV).

Under its ICO, it is offering 60 million Crowd Genie Coins (CGCOINs) for sale at the price of one Ethereum for 400 CGCOINs. Aiming for a soft cap of US$5 million (RM19.44 million), the public sale is from Feb 1 to 28, 2018.

Bonus CGCOINs, between an additional 5% and 25%, will be given out for early buyers who make purchases within the public sale period.

Preceding the public sale was a pre-sale period that started from Nov 21, 2017 during which a 50% bonus was offered for CGCOINs purchased. Crowd Genie has to-date, raised close to US$2 million (RM7.78 million).

Upon completion, the CGCOIN will be listed on several coin exchanges. Holders of CGCOINs can use it to invest in loans on Crowd Genie’s platform which offers potentially higher yields than many banks. Alternatively, they can trade it at the exchange.

At the end of every calendar quarter beginning July 1, 2018, 80% of CGSPV’s distributable profit will be used to buy back CGCOINs at the market price, thus providing support to the price of CGCOINs.

Crowd Genie’s business

Crowd Genie is a licensed and fully operational P2P lending platform that is focussed on giving Small and Medium-sized Enterprises (SMEs) access to loans from individuals and companies instead of financial institutions, which require longer approval processes.

It was granted a “Dealing in Securities” license by the MAS in March 2017 and is one of a few P2P lenders in Singapore with this license.

The platform has been operational for approximately 20 months. Crowd Genie has a track record of full repayments with no defaults since inception.

Apart from being compliant with MAS regulations and having a strict system of Know Your Customer (KYC) checks and due diligence performed for all users, Crowd Genie is the first P2P platform in Singapore to introduce a provision fund.

Named GenieShield, the fund offers buffer protection for lenders from delayed payments and defaults. It is the only platform in which Crowd Genie directors make a co-investment for every loan listing on the platform and the platform also requires all loans to be backed by the personal guarantees of the borrower company’s director(s).

In addition, to safeguard the interests of the participants, Crowd Genie works with a regulated escrow agent in Singapore, so it does not handle, hold, or accept any monies or assets.

Founder and chief executive officer of Crowd Genie, Akshay Mehra said, “The fact that traditional financial institutions have not been able to fully meet the funding requirements of many SMEs has created a demand for online alternative financing from this ‘underbanked’ business segment. As a result, the market for alternative finance platforms like P2P lending is huge.

“In Singapore alone, If P2P lenders contributed to the same proportion of total lending as in the UK, the market size would be more than S$1.35 billion (RM3.98 billion). Crowd Genie is proud to be one of few MAS-licensed P2P lenders in Singapore and compared to most ICOs which do not have an operating history, we have a strong operating track record of 20 months.”

Integrating blockchain into the Crowd Genie platform

To bring the capabilities of the Crowd Genie platform to a higher level, Crowd Genie will integrate Ethereum blockchain technology into its platform.

Blockchain technology enables transactions between lenders and borrowers to be done in a cost-efficient way as it removes the need for multiple layers of transactions in between, and ensures a more robust and transparent system due to the accessibility of the blockchain ledger to the public.

Hosting the platform on Ethereum blockchain facilitates the use of CGCOINs in the operation of Crowd Genie’s lending platform.

To invest in loans on the platform, lenders need to purchase CGCOINs and transfer them to borrowers, who can then convert these coins into actual currency.

Each party will have a unique ‘Digital Passport’ that contains information for a KYC verification process that is faster and yet more rigorous due to the capabilities of the blockchain technology.

At the same time, the fractionalisation of assets on the Crowd Genie platform is made possible by blockchain technology which keeps track of transactions, and allows the use of CGCOINs to invest or trade any asset in any fraction, supporting higher liquidity in the platform.

“As part of our vision, we aim to dramatically expand capital flows within the Asian region with our blockchain-enabled platform. One of the biggest issues we are addressing is the costliness of current processes due to the need for financial intermediaries.

“Using blockchain technology, the Crowd Genie platform will be able to replace complicated and time-consuming processes, such as due diligence and compliance, that intermediaries are currently offering at substantial fees.

“With the ability to fractionalise any asset and the use of CGCOINs, we are confident of widespread adoption among borrowers and lenders, leading to the formation of a potentially powerful financial ecosystem,” said Mehra.

An additional feature of the system involves the ability of borrowers to earn CGCOIN credits through delivering on-time repayments.

By rewarding SMEs with CGCOIN credits and other benefits like enhanced borrower’s reputation coupled with lower interest rates and access to higher loan amounts in the future, Crowd Genie has an in-built system to incentivise prompt payments within its platform.

Crowd Genie was founded by Akshay Mehra and Bikash Saha in 2016.

Akshay has more than 17 years of working experience in new growth advisory, seed investing and operationalizing start-ups and has been an author for the ‘Innovation Blog’ for Forbes India and co-authored ‘Lessons from success and failures of MNCs in Asian market’ and ‘5 lessons from 5 years in India’.

Bikash has over 20 years of banking experience and has been the chief operating officer of Standard Chartered Capital Korea. They are supported by a panel of advisors who include David Drake, founder and chairman of LDJ Capital, a family office managing US$1.5 trillion (RM5.84 trillion) in assets globally, as well as Petter Sehlin, founding partner of global angel fund True Global Ventures and active ICO-advisor and investor since 2008.

Use of proceeds

Crowd Genie plans to use the proceeds from the issue of CGCOINs of approximately US$5 million (RM19.44 million) in the following ways:

• 45% to be used in investment of loans on the Crowd Genie loans platform with a minimum investment of US$2 million (RM7.78 million)
• 30% to be used in team expansion, which includes establishing development centres in India and Singapore, and growing the business development team with an aim to increase user base of the Crowd Genie ecosystem
• 10% to be used to cover regulatory compliance, legal, and cyber-security costs
• 15% to cover business development and overheads such as rent and server costs