StartEngine, a leading US based investment crowdfunding platform, held a webinar today to discuss the performance of its business. Hosted by co-founder and CEO Howard Marks, he shared some updated financial metrics on platform performance. StartEngine is in the midst of a Reg A+ securities offering seeking growth capital and the presentation was designed to provide investors and potential investors with an opportunity to better understand how StartEngine is performing.
Marks shared that total revenue during 2021 for the first six months has topped all of 2020. In comparing to 2021 H1 results, StartEngine has generated $13.4 million in revenue and a net income of $2 million. This contrasts to the same period year prior when StartEngine booked $5.4 million in revenue and a net loss of $390,702. Profitability is obviously a key metric but StartEngine was quick to point out the past performance is no guarantee of future results as it pursues an aggressive growth strategy.
Gross margins improved as well jumping from 71.9% in 2020 to 83.77% in 2021.
Operating expenditures rose dramatically to around $9 million – largely due to a rapid rise in new employees. StartEngine said that since the beginning of 2021 it had hired 61 new employees. Marks shared that the pandemic has accelerated the transition to remote operations – a change that has made it easier for them to hire employees beyond its Los Angeles base. StartEngine is now a virtual company that hosts four annual in-person meetings to gather the troops.
Of note is the expansion into other asset classes including Real Estate and Collectibles. StartEngine has been filing multiple Form 1-As as it adds more esoteric investment opportunities for its investor base. Marks mentioned Wine specifically – an offering that apparently sold out in 20 minutes. StartEngine has recently hired a VP of Assets – a role that will help define which other asset classes in it may want to pursue in the future.
As for international expansion – Marks said for now it is not in the cards as the US market is huge.
Regarding crypto/NFTs, Marks voiced his opinion that NFTs are securities and should be treated as such. That being said, StartEngine is discussing digital assets/crypto with the regulators so if they enter the space it will be with the blessing of policymakers.
As of today, StartEngine has raised $8.4 million in a Reg A+ securities offering with a maximum raise of $55 million.
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