Equity Crowd-Sourced Funding Remains Stable Amid Major Funding Declines
New CSF Industry Report Reveals Sector Resilience
Australian crowd-sourced funding (CSF) volumes have remained stable delivering $71 million to the ecosystem across the last 12 months according to a new Industry report. This is against a backdrop of major funding declines in Venture Capital (a reported 58% drop in VC funding so far this year)* and ASX IPO’s.
Australia’s annual CSF industry report compiled by Birchal reveals that in 2023 a total of $71 million was raised over 82 crowdsourced funding offers, from over 35,000 investments, with funding volume and offers sitting at a similar level to the previous year (2022). The report covers all industry players active in the CSF regime.
Matt Vitale, Co-Founder and CEO Birchal says, “CSF activity has remained stable, which is no small feat given the current funding environment and unrest in the wider financial system. It has been another solid performance for Australia’s equity crowdfunding industry.
“Whilst the 2023 result for the industry as a whole has reported similar volumes to 2022, and system growth was flat, being able to maintain this level of funding reveals the substantial contribution of CSF to the ecosystem and is further evidence that despite persistently challenging funding conditions, equity CSF remains a lifeline and reliable source of capital for Australian startups.”
Australians are investing their money (both wholesale and retail investors) in a wide range of industries, from Software, Financial Services, Technology, Transportation and Travel, with the top three invested CSF categories comprising of; Food and Beverage with 24 successful campaigns raising a total of $21.6M (31% of the industry), Healthcare 13.3M (19%) Sustainability $7.6M (11%).
There are signs of growing maturity in the CSF industry, in 2023, 41% of all successful CSF offers were made by companies that had greater than $1M in reported revenue at the time of their offer; compared to just 16% in 2020. In FY23, 26% of all successful CSF offers were generating positive earnings at the time of their offer, compared to just 12.5% in 2020.
In 2023, Birchal, Australia’s leading CSF company raised $53M in funds from 29,000 investors across 57 successful offers and achieved an average raise size of $926k (the highest ever). Birchal completed its busiest quarter ever in Q4 of 2023, hosting 27 successful CSF offers, including Birchal’s own $2.4m raise in December, the second time the business has raised on its own platform.
The industry as a whole has delivered $289 million to the ecosystem across 380 successful CSF offers through the CSF regime since it commenced in 2018. Birchal alone facilitated over $196 million of investment into the ecosystem for Startups and SMEs, across 249 successful CSF offer from over 115 thousand investments
Popular Industries
Within the dominant industry for 2023, beer-related Food and Beverage businesses, which represented more than half of the Food and Beverage category in 2022 ($14.3m of $28m), raised only $2.7M across 2 successful offers in 2023. In stark contrast, non-beer businesses surged, contributing $19 million (the highest ever) and 38% up from 2022’s $13.7M.
Another interesting trend was in healthcare, the second most invested industry for 2023. This sector was dominated by cannabis businesses which raised $10.9M across four campaigns including Cannaponics successful $5M raise in May 2023, making them the second company to hit a 5M maximum target.
Birchal anticipates seeing future growth in both Healthcare and Technology as the CSF market matures.
Top Raises
Having raised 3 million last year via its own crowd-sourced Funding (CSF) platform, Birchal with approximately $5.39 million raised across two offers, is now among one of the biggest achievers through the CSF regime. It sits behind only Montu (at $5.5 million) for the most amount of capital raised through CSF of any company in Australia.
CSF Activity by State
Victoria accounted for the most CSF funds raised, with $22M across 23 deals (31% of all funds raised, and an 11% drop on 2022), followed by New South Wales with 19.7M (28% of all funds raised).
Western Australia achieved the most substantial year on year increase, raising $16.8M across 15 deals (24% of funds raised, and a 116% increase in 2022).
Platform performance
Activity in the Australian CSF industry in 2023 has continued to remain on the major platforms: Birchal, Equitise and OnMarket.
Birchal remains the clear market leader, responsible for 75% of all CSF funding volume ($53M) across the industry in 2023, an 8% increase on its share of funding volume in 2022.
The CSF report provides an analysis of the current state of the CSF sector, revealing trends, areas of growth, and the shifts that are starting to shape the investment landscape, entrepreneurialism, and the innovation economy in Australia. Review or download the full 2023 CSF Yearbook Report here.
*A 58% drop in venture capital funding so far this year: Data from Cut Through Ventures.
ABOUT BIRCHAL
Birchal is Australia’s leading crowd-sourced investment platform, with 75% of crowd investment taking place on our platform. As one of the first seven issued a licence from ASIC in 2018 to operate as a crowd-sourced funding intermediary, we’ve raised $196 million for Australian startups and SMEs across 249 successful CSF offers from over 115 thousand investments.
