This article first appeared in The Edge Financial Daily on June 3, 2019

KUALA LUMPUR: CIMB Bank Bhd has inked a memorandum of understanding (MoU) with Singapore firm, CapBridge Pte Ltd, to facilitate capital raising and trading of shares for private companies via the CapBridge investment platform and the 1exchange (1X) private securities exchange.

Under the MoU, CIMB Bank will collaborate with CapBridge to offer its customers in Malaysia, Singapore, Indonesia, Thailand and Cambodia access to private capital and liquidity through CapBridge’s private capital eco-system, the bank said in a statement yesterday.

The bank describes the tie-up as a wide-ranging partnership that provides “a unique value proposition” to CIMB’s small and medium enterprise (SME) and mid-corp clients looking to raise capital and have part of their shares traded, while remaining private and in full control of their businesses.

The CapBridge investment platform is a private capital raising platform for growth stage and pre-initial public offering companies, according to the bank. 1X, meanwhile, is a trading platform which facilitates a buyer-seller match for private securities listed on the exchange by using blockchain infrastructure, specifically Ethereum’s network, to register and track the shareholdings of investors who trade on the platform.

“1X investors with digital wallets can thus directly check their real-time shareholdings without going through a trust administrator. The exchange can also potentially connect to the millions of digital wallets actively seeking regulated and tradable private equities, thus linking companies to a truly global liquidity or capital pool,” the bank said.

CIMB Group chief executive officer (CEO) of group commercial banking, Victor Lee Meng Teck, said the collaboration with Capbridge is an “exciting” one that will help both CIMB’s SME and mid-corp clients access an alternative source of capital from global investors.

“As the main banker for companies wishing to raise funding on CapBridge’s platforms, CIMB is even better-positioned to help its SME and mid- corp customers access the capital they need to grow their business.

“In line with Forward23, CIMB’s next mid-term growth plan, this collaboration with CapBridge also further strengthens our refocused SME proposition to help them grow through technology-driven end-to-end solutions, and by transforming our customer journey,” said Lee.

CapBridge founder and CEO Johnson Chen, meanwhile, said private companies will get a fully integrated private capital solution within the CapBridge eco-system. “They can gain access to both growth capital through primary fundraising, as well as enable partial liquidity via secondary trading of private securities on 1X subsequently.”