As of 6 p.m. on Monday, Marine Techno, a cosmetics company that specializes in products made from marine collagen, successfully gathered 76 million won ($64,000) from retail investors on the nation’s first crowdfunding portal, which had opened earlier in the day.
A total of 13 investors, including angel investors, the government-led Creative Economy and Innovation Fund, and other retail investors contributed to the biotechnology firm based out of the Jeonnam Creative Innovation Center in Yeosu, South Jeolla.
Created in 2014, the start-up produces cosmetics by recycling marine byproducts. It owns as many as 30 patents for collagen-producing technologies.
The company’s success on the crowdfunding platform meant it reached 110 percent of its investment target.
“I was wondering about this, but we unexpectedly ended up with a good result,” said Hwang Jae-ho, founder of Marine Techno. “We rolled out investor relations activities at many events, and that’s what has led to the good result today.”
Hwang said the new funds will be used to expand production facilities to meet growing demand.
Individuals who want to invest in new promising businesses can log in to www.crowdnet.or.kr, operated by the Korea Securities Depositary, to connect with one of the five intermediary firms registered with the Financial Services Commission, the nation’s top financial regulator.
The five intermediaries that can broker deals with the start-ups online are Wadiz, Ucanstart, OpenTrade, Yinc and Wealth Funding Management.
On the first day, 18 start-ups, including Marine Techno, attracted investments through the intermediaries.
The FSC introduced the crowdfunding system as part of its efforts to support the creative economy and financial technology initiatives. The regulator revised the nation’s Capital Market Act in July to provide start-ups with better access to financial resources, hoping to boost the fintech industry and create more jobs for young people.
Crowdfunding platforms have become increasingly popular, with the U.S.-based Kickstarter attracting as many as 270,000 online investors in just two hours to raise 10.9 billion won for Pebble, a smartwatch maker.
If they have a crowd funding account with any of the 18 securities firms offering them, retail investors can invest up to 2 million won in a single firm, and up to 5 million won a year. Start-ups are allowed to receive up to 700 million won in total every year through the crowdfunding portal. If a company fails to reach 80 percent of its target by the deadline it has set, the funding will be nullified.
“There is some concern that the investment limit is too small, but we plan to support the regulator’s move to heat up the mood,” said Kim Young-soo, an executive at Korea Venture Business Association.
Marine Techno was the only company that surpassed its goal on Monday, with crowdfunding still a foreign concept to many. On the homepage for Yinc, a message reading, “Please be my first investor,” was still flickering at around 5 p.m.
Still, large financial groups are joining the trend. KB Financial Group launched a matching service for investors and start-ups on Monday. It began to attract investors by using the crowdfunding platform of OpenTrade to help fund four promising start-ups chosen by the group.