Lai SeeCrowdfunding phenomenon is coming to Hong Kong

Hong Kong-based entrepreneurs Simon Karner and Mathias Krostewitz are poised to launch fund2.me, a crowdfunding site that will open for business on December 1.

Readers will doubtlessly have heard of crowdfunding - the new big thing for raising capital. It involves using the web to raise funds by getting relatively small amounts of money from a large number of people.

According to a report by US research firm Massolution, about US$2.7 billion was raised from crowdfunding globally last year involving more than a million projects. This year, the amount is likely to exceed US$5 billion. A recent World Bank report said that by 2025 there could be US$93 billion available annually for crowdfunding, with US$50 billion coming from mainland China alone.

Currently, most crowdfunding occurs in the US and to a lesser extent in Europe and Australia. There are a handful of sites in Hong Kong. Fund2.me, which is both the name of the company and its website address, aims to service Hong Kong and the mainland.

"We expect most ideas to come from Hong Kong and from expatriates in China looking to set up businesses there," says Krostewitz.

Not all crowdfunding sites operate in the same way. Fund2.me offers three forms of funding. The most basic is "backing", which means that in return for committing, say, US$50 to a start-up, investors receive a service from the company or a product. Typically, this form of funding is for less than US$100,000.