In 2018, investment crowdfunding rules were improved after years of debate and discussion between industry leaders and politicians. Frequently referred to as “crowd-sourced funding” in Australia, in brief, the rules now allow for an issuer to raise up to $5 million in an online offering with retail investors being capped at $10,000 per company per year. Sophisticated investors may invest as much as they want.
Now, 18 months in, it appears that online capital formation is gaining traction.
Since January of last year, 40 companies have raised $30 million supported by approximately 30,000 individual investments. Leading the charge is crowdfunding platform Equitise.
According to a release, Equitise has completed 54 successful raises totaling $25 million from 8,000+ investors through equity crowdfunding offers, wholesale offers, and IPOs. Equitise has completed more deals in the first half of 2019 than all of the year prior. There are currently 6 offerings live and expectations are for that number to top 40 by the end of the year.
Equitise reports a 75% success rate on its platform and an investment database of 30,000 potential investors, Equitise notes that it receives on average $3,100 per investor across its various investment channels.
According to the platform, so far they have experienced the following:
- An investor split of 75% male and 25% female,
- The most popular sectors are Fintech, food and beverage and consumer interest.
- Investors’ age between 18-87 years with the most active being between 30-40 years.
- Each raise has an average of 500 investors who overwhelmingly live in Sydney and Melbourne.
Co-founder of Equitise, Jonny Wilkinson says the industry is growing and maturing:
“Equity crowdfunding in Australia has made significant strides since legislation passed in 2017. When we first launched there was doubt that equity crowdfunding would work and now its an early disruptor that’s raised over $9 million for 8 companies, no small achievement for a new fintech,” says Wilkinson.
Wilkinson adds that they are providing an alternative avenue to funding for a diverse range of founders and investors.
“We’re not just challenging VC firms but also giving early-stage companies a channel to engage further with their customers, users and future brand advocates. Data from our various raises shows that alcohol brands on the platform have a 100% success rate, raising over $2 million from 962 investors. This shows us that there’s a particular appetite for investing in consumer brands in industries that investors are passionate about. They also generally have more of a following which helps with traction in the initial stages of the campaign.”
Since platform launch in 2014, Equitise has self crowdfunded raising $3.6 million with plans for a Series A in motion raising up to $3 million.
Equitise offers support before, during, and after a funding round to ensure businesses have the best opportunity for success. Issuers are highly vetted companies.