Australia: Crowdfunded Companies Top $1 Billion in Market Cap in 2021

In Australia, the market cap of all crowdfunded companies topped $1 billion in 2021, according to the leading securities crowdfunding platform Birchal.

The report states that the value of all crowdfunded companies doubled in 2021 in comparison to 2020.

In Australia, securities crowdfunding is labeled crowd-sourced funding (CSF). Birchal has published its annual CSF Yearbook 2021.

Birchal leads the industry by volume hoovering up 75% of Australia’s equity crowd-sourced funding activity.  Birchal states that 2021 was the largest yet for the industry, posting a 140% increase on the prior year with 89 successful CSF offers completed, raising over $71 million from more than 37 thousand investors.

Matt Vitale, co-founder and Managing Director of Birchal, commented on the report:

“Despite the obvious challenges we all faced during 2021, there were so many milestones achieved during the year that it really should be one to remember, and not forget. The industry is getting bigger, fast. The total value of CSF companies broke $1b in 2021, and as the industry matures, we’re seeing more companies come back for second and third follow-on CSF offers, 20 so far, with an average uplift in value of 114%, which is tremendous.”

Vitale said that another indicator that the industry is maturing is the first issuer listed on the Australian Stock Exchange (ASX), Biome Australia Ltd (ASX:BIO), makers of ‘Activated Nutrients’ probiotics, which completed a successful securities offer in 2019.

Vitale added that they have also observed a marked increase in professional investor participation in investment crowdfunding offers, challenging a widely-held myth in Australia that raising through crowdfunding might make a company uninvestable for professional investors down the track.

“The most notable example being Square Peg’s $6m investment in Zero Co, alongside their record-breaking $5m CSF offer in October 2021. This is a significant moment for CSF in Australia, and consistent with our observations of the UK equity crowdfunding industry at a similar stage in its development.”

Birchal reports that Food and Beverage was the most invested industry in 2021, with 21 successful campaigns raising a total of $16.64 million (or 23% of the industry). Craft beer-related businesses represented the majority of funds raised for food and beverage businesses, which is a significant achievement after 2020 when no craft-beer businesses raised successfully through CSF.

Financial Services was the second most invested industry in 2021 with 9 successful campaigns, raising a total of $12.59 million, followed by Sustainability and Software, which raised a total of $8.97 million and $8.07 million respectively.

Top 10 securities crowdfunding offerings in 2021 include the following

 

 

Since Australia updated its securities law, over 207 Australian small and medium businesses have raised over $146 million to fund their businesses in exchange for shares. There are over 93 thousand investors that have participated in CSF offers.

89 successful offerings were completed in 2021 (an increase of 82% versus 2020) and a total of $71 million was raised across all offerings in 2021, representing a 140% increase versus 2020.

ZeroCo set a record raising $5 million in less than 7 hours in October 2021, the largest and fastest offering to date.

The top three platforms include Birchal, Equitise and OnMarket.

Birchal led having hosted 66% of all successful offerings (59 in total), raising 75% of all funds raised ($53.5m) and facilitating 85% of all investments (31.8k) across the CSF industry in 2021.

Birchal reports that it achieved its best quarter ever in December 2021, facilitating over $20.9 million of investment across 24 successful offerings.

The yearbook is available here.