Three FinTech Australia members – Birchal, Equitise and OnMarket – were first out of the blocks to take advantage of the Australian Government’s commencement of legislation supporting the equity crowdfunding of public companies.
The three companies were among seven that the Australian Government announced on 10 January had been licensed by ASIC to offer a crowdfunding intermediary service.
The companies immediately began to offer, or intend to shortly offer, crowdfunding opportunities in a diverse range of companies. These include a new digital bank, a new real estate tech platform and a company offering caffeine strips to provide an energy boost to professional athletes.
Matt Vitale, the Co-Founder and General Counsel of Birchal said: “Birchal is thrilled to be among the first cohort of platforms licensed to operate equity crowdfunding platforms in Australia.”
“The potential benefits to the Australian jobs and the economy more broadly are significant, as many of the businesses on the Birchal platform have highlighted employing staff as one of the key areas that funds raised will be spent.”
Birchal has a range of live and upcoming campaigns on offer, including Next Address (marketed as Australia’s first property tech platform), Oscar (which delivers premium shavers and shaving products) and Pelikin (a FinTech Australia member and global money and travel app).
Equitise co-founder Chris Gilbert said, until now, early stage investment was only available for high net worth investors or venture capitalists.
“This groundbreaking change means Australians can now put their money behind what could become the next Atlassian or Canva and support early stage local companies raising up to $5 million,” Mr Gilbert said.
“We have led the charge to change this legislation for the past three and a half years to give all Australian investors the opportunity to invest in early stage companies.”
Equitise’s initial offering is neobank Xinja, which is seeking to become Australia’s first 100 per cent digital bank.
OnMarket has flagged that one of its upcoming crowdfunding opportunities will be Revvies, which makes innovative caffeine strips to support the nation’s athletes. OnMarket is also in discussions with a leading Medicinal Cannabis company to raise over $2 million via equity crowdfunding.
OnMarket founder and CEO Ben Bucknell said the approval marked a significant milestone for Australian businesses and retail investors alike.
“It’s time all Australians had a fair go and access to Australian businesses of the future. Previously, investing in businesses like Revvies would only be accessible to angel investors or venture capital firms but through equity crowdfunding investment democratisation is here to stay,” Mr Bucknell said.
“Equity crowdfunding is an innovative way to fund someone else’s dream.”
Mr Bucknell pointed out that equity crowdfunding is already worth $US2.6 billion in the United States, and is proving popular in the United Kingdom and New Zealand as a way for entrepreneurs to succeed. Equity crowdfunding was only established in the UK in 2013 and last year had grown to £272m in the UK.
Equity crowdfunding enables Australian retail investors to contribute as little as $50, or as much as $10,000 in a business. The awarding of the new licenses follows the approval of legislation in the Australian Parliament in March 2017.
However, at this time, crowdfunding in Australia is limited to unlisted public companies.
The process of becoming a public company continues to be a significant time and cost barrier to companies wanting to raise funds.
FinTech Australia has been pushing for a crowdfunding regime for Australia for the last two years. Indeed, crowdfunding was part of the original policy paper that FinTech Australia put to the Australian Government in early 2016.
FinTech Australia continues to lobby for Australia’s crowdfunding regime to be extended, as soon as possible, to private companies – which make up 99 per cent of Australia’s companies. Legislation is currently sitting in the Australian Parliament on this issue.