Australian crowdfunding platform Equitise has entered administration after failing to secure new funding necessary to sustain its operations, according to a filing lodged with the corporate regulator seen by The Australian Financial Review. It was reported earlier this year that Equitise had lost its license to operate in New Zealand.
The company appointed administrators from Olvera Advisors late last month, but further details of the engagement have not been disclosed.
Equitise was an early entrant into investment crowdfunding, which enables entrepreneurs to raise capital from retail investors without the need for expensive investment bankers. It often focuses on pre-revenue start-ups.
Since equity crowdfunding was permitted in Australia in September 2018, the company claims to have facilitated approximately $94 million in investments across 167 deals, positioning itself as a significant player in the country’s burgeoning crowdfunding sector.
The appointment of Olvera Advisors signals substantial financial challenges for Equitise. Olvera, which describes itself as an adviser to high-net-worth individuals, has previously administered failed technology companies, including Big Un in 2019 and fintech firm Spitfire Corporation in 2020.
The involvement of Olvera suggests that Equitise is undergoing a significant restructuring or wind-down of its operations.
The FMA stated that Equitise had failed to file its financial statements before the deadline, marking the third consecutive year the platform missed the filing. The infringement notice required Equitise to pay a NZD 7,500 penalty.
The regulatory body emphasized that as an equity crowdfunding service provider licensed since December 2014, Equitise is mandated to file audited financial statements by October 30 each year.
Subsequently, on April 3, 2024, the FMA canceled Equitise’s crowdfunding license. The cancellation added pressure to the company’s operations, potentially affecting investor confidence and its ability to facilitate new deals.
Equitise’s regulatory troubles in New Zealand may have contributed to its financial difficulties in Australia.
Founded in New Zealand, Equitise expanded into the Australian market following legislative changes that enabled online capital formation. The company was among the first to offer crowdfunding services and claimed to have raised over $63 million from 82 offerings since its inception.
It was not immediately clear if these figures included both markets. At the time of entering administration, two securities offerings on its platform were marked as “coming soon,” leaving their status uncertain.
Equitise had also leveraged its own platform to raise funding for its operations, highlighting the engagement and sophistication of its investor base.
However, the inability to secure fresh capital underscores the challenges faced by crowdfunding platforms in maintaining financial viability while navigating regulatory landscapes.
The company’s collapse raises questions about the sustainability of equity crowdfunding platforms, especially those operating without the backing of traditional financial institutions.
Equitise’s situation may prompt regulators and industry participants to reassess the frameworks governing such platforms to ensure better compliance and financial stability.
