Invoice financing platform Capital Match to liquidate after years of controversy

CAPITAL Match, a Singapore-based startup that enticed investors with potentially high returns from alternative investments, is shutting its platform and entering liquidation.

An e-mail sent to investors on Thursday (May 11), seen by The Business Times (BT), said a liquidator will be appointed to manage the operations and communication with investors from Thursday.

Perun Consultants has been appointed the liquidator, BT understands from a source.

A separate e-mail sent on Monday urged investors to withdraw their funds immediately and download any investment reports they may require. Capital Match ceased offering invoice financing facilities for retail investors in March 2023, the e-mail said.

The company was put on the Monetary Authority of Singapore’s (MAS) investor alert list in March last year, after a report by Tech in Asia said Capital Match misled investors into taking on more risk than they signed up for. Millions of dollars had reportedly been ploughed into the platform.

MAS’ investor alert list comprises entities that may have been wrongly perceived as being licensed, authorised or regulated by MAS.

At least four individuals that invested on Capital Match have reported their grievances to the Singapore police, BT understands.

Capital Match was founded in 2014 as an alternative investment platform. It entered invoice factoring agreements with small and medium-sized enterprises, paying upfront cash to a company waiting to accept payment on an invoice. The upfront cash would come from investors on Capital Match’s platform, who are repaid when Capital Match has collected the payment on the invoice.

Capital Match is embroiled in a number of lawsuits, including two filed by an investor who alleged the company sold products that constituted unlicensed activities.

Capital Match has denied it required a licence to carry out the operations, according to a defence filed in court and seen by BT. The company said the investor was aware of all risks involved, as stated in the investment agreement.

The investor, Chris Vanden Berghe, also alleged in another lawsuit that the company misappropriated investor funds in new facilities in order to repay older facilities, according to a statement of claim obtained by BT. Capital Match has yet to file its defence in court.

“I am not surprised by Capital Match’s liquidation, given the documents I acquired during the discovery phase of the lawsuits. These documents revealed that the company neglected to perform even the most basic risk management and instead used new investors’ funds to cover overdue facilities,” Vanden Berghe told BT.

“Unfortunately, more than S$10 million of investors’ funds have been lost due to personal greed and pressure from venture investors. As the next step, I am commencing legal action against the founder and ex-directors for the tort of deceit.”

Another investor, who declined to be named, said he lost S$40,000 after investing via the platform from 2017 to 2019.

“Initially the process was fine as I was picking the companies I wanted to invest in. Then they launched an auto investment tool. I chose how diverse my investment should be and let it run,” said the investor.

“Later I realised they invested all (of the funds) in only two to three companies, even though the rule I applied was not more than S$3,000 to one company – and all of them defaulted.”

Capital Match’s early backers include Eduardo Saverin’s B Capital and Dymon Asia Ventures, now known as Integra Partners. The company was acquired in November 2018 by Sesami, an e-procurement platform in Singapore.

Capital Match has also been in lawsuits with companies that it accused of cheating and other activities. In February, a former director of shipbuilding company Lal Marine & Construction (LMC) was sentenced to five years’ jail after cheating Capital Match of over S$1.3 million through 10 fake invoices.

A work order between LMC and offshore builder Keppel Fels was attached to each fake invoice.

Capital Match also has an ongoing lawsuit against electronics manufacturing company Sanmina-Sci Systems Singapore, for an outstanding sum of S$10.8 million.