Birchal, the largest securities crowdfunding platform in Australia (called crowd-sourced funding in the country), has published a report following five years after online capital formation in its present form was legalized.
Matt Vitale, CEO and co-founder of Birchal, states:
“We’re five years in. The industry has facilitated over $248m across over 327 successful CSF offers, with 28 offers greater than $2m. Approximately two-thirds of these have been hosted by Birchal.”
Vitale notes that Australia is the 2nd largest investment crowdfunding market on a per-capita basis – topped only by the UK.
Like some other markets, securities crowdfunding has been impacted by the stumbling global economy. Investment in online securities offerings in Australia has declined 26% in the 12 months ending in June 2023.
At the same time, investment crowdfunding has surpassed ASX IPO activity for the first time – at least by the number of issuers, according to the report.
The report quotes University of Colorado Professor Andrew Schwart,z who states that the regulatory regime in Australia tops all others around the world. He has recently published a book on investment crowdfunding testifying to his belief that rules are better down under, adding that he predicts a bright future for the industry.
Birchal has tallied the following numbers for the entire investment crowdfunding industry (as of June 30, 2023):
- $248 Million raised
- 327 funded offerings
- An average deal size of $763,000
- The estimated total market cap of successfully funded companies now stands at $4.17 billion
- 1/4 of all deals in 2023 topped $1 million
- Birchal has led the way with 212 successful funding rounds raising $164 million
- Birchal funded 57 securities offerings in fiscal 2023, followed by Equitise, which completed 13 successful deals. OnMarket was in third at 5 funding securities offerings.
Some anecdotes from the report indicate there are signs of a maturing industry as more established private firms benefit from online capital formation.
In November 2021, Biome Australia became the first crowdfunding firm to become a public company trading on the ASX. Several other firms are also working on public listings.
The report, available here, provides an excellent snapshot of the investment crowdfunding ecosystem in Australia. Vitale sums things up nicely:
“In Australia, we need to level the playing field for retail investors so they can enjoy the same incentives that wealthy investors do. We also need to improve liquidity options for investors in early-stage businesses. And frankly, the government needs to do more to support entrepreneurs.”