Equity Story IPO: Why it’s ‘the best investing advice business no one’s heard of’ – and how it plans to go global
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CEO Trent McGraw says funds from the Equity Story IPO will supercharge the company’s rapid growth after finding such strong traction in its established Australian market.
Among its many unexpected disruptions, a headline by-product of the COVID-pandemic has been the undeniable surge of intergenerational and worldwide interest in independent trading and investing.
Here in Australia, one platform accelerating from the direct exposure to that tailwind is Equity Story – the education and investment advice company that’s established a strong base in the Australian market.
A loyal community of subscribers: happy to pay and keen to learn
Having built up a loyal community of paying subscribers to its platform, Equity Story is now eyeing the ASX boards as it scales up for its next phase of growth.
After leading a disciplined approach to capital management, that’s driven growth to a sustained target threshold, CEO Trent McGraw told Stockhead funding from the group’s pending equity raise will help Equity Story, “release the shackles” as it scales up in Australia, with an eye on the US market.
A prospectus full of pinched pennies
“One aspect of our business is that if you look at our m/m ad spend at the moment, we’re spending around $10,000 per month total on marketing the business,” McGraw said.
“And as per the use of funds in our prospectus, we’ve got a commitment to spend $1.8m on advertising and marketing. So you can see how that should really have a positive impact on being able to get the word out.”
“We feel that we’re the best quality investment advice business that no one’s heard of.”
The Equity Story, story
Equity Story’s roots go back to 2007, when founder – and current head technical analyst — David Tildesley began fine-tuning a technical trend model which he recognised as the bones of a simple, effective and successful trading platform.
Following a multi-year period of development, the company formally opened its doors in 2014 – but only when Tildesley was satisfied his trading system was strong enough to begin offering broad and encompassing general equities advice.
McGraw leapt on board in 2016 as a private investor, when the business was pitching for its next round of growth funding.
“Through that due diligence process, I determined that David was really good at what he does,” McGraw said.
“And he was just all about helping any investor at any level – his goal was to provide meaningful assistance, regardless of how much money an investor had.
A virtual investor Uni
Equity Story continued growing its general advice business before adding an education centre platform in 2019, starting with two-day in-person workshops.
With the early success of its education model, the company quickly pivoted to virtual workshops once Covid hit.
“The company is now heading towards its “18th straight sold out event”, McGraw said.
“And we limit attendees, to make sure everyone gets full engagement with our analysts during the session.”
Adjacent to its existing platforms, the company also responded to strong demand to build a seperate, boutique funds management business which kicked off in late-2020.
In late-2021, the team consolidated its advice, education and funds management platforms under one umbrella to get ready for a public listing.
For Equity Story subscribers, the crux of its value-add is a company valuation model that offers a proprietary combination of technical and fundamental stock analysis.
Tildesley maintains his role as Head Technical Analyst, and works alongside Head Fundamental Analyst Peter Kopetz.
That makes the platform “unique” in its delivery method, McGraw says, with “a blend of technical and fundamental analysis that investors can’t find anywhere else”.
Equity Story’s core service is delivered through a daily video format which combines the
respective strengths of Tildesley and Kopetz.
When the charts align
“It’s the way they work together that people tune in for day in, day out,” McGraw said.
“It’s only when the charts and the fundamental analysis align that something comes out of Equity Story to its members.”
“We talk to analysts all the time and a lot of them have never looked at a chart. It’s a model that’s proven to be quite successful and it’s unique as well,” McGraw said.
And he added that the proof is in the company’s high level of of customer engagement.
“From a recent survey, nearly 90% of our members who participated were watching that video at least 3 times a week, with 60% of them never missing one,” McGraw said.
Equity Story has established strong recurring revenues through its membership subscription model which offers two core options; Trader Pro, and the expanded Trader X that includes investment analysis for US stocks.
And with that existing traction, the company is seeking between $4.5m and $5.5m at IPO to scale up in both domestic and global markets.
For McGraw, the most important factor – over and above Equity Story’s member numbers – is “the time spent building what we consider the best reputation in the space”, he said.
“So now we want to leverage that hard work to drive subscriber growth with our existing adviser model, and an expanded education offering.
Along with its significantly enhanced marketing drive, McGraw also flagged a strategic focus on M&A as one of Equity Story’s key rationales for listing.
The company’s existing subscriber base – which now numbers more than 1,000 customers – is complemented by an expanded database of around 40,000 Australian investors who have registered their interest with the platform over time.
“So that’s an opportunity where if we introduce new services through acquisitions, we can convert those customers because they are in the investing space and did show interest in our services at some point,” McGraw said.
Speaking of addressable markets, the company is also eyeing off a global expansion for its platform post-listing.
“Right now, we’re actively talking to a US licensing advisor which would ideally see us secure SEC investment advisor licensing and registration,” McGraw said.
Obviously Australia is comparatively a drop in the ocean compared to the US and we’ve got the expertise. We can mirror what we do here and leverage results we’ve achieved from US general advice recommendations we’ve already put out.”
Lastly, ES will look to accelerate its growing funds management vertical, with a focus on millennial investors – the key target demographic for its expanded marketing spend.
As part of its goal to establish a competitive advantage, the company has set up a feeder structure to make sure retail investors “can get access to fund managers they normally wouldn’t”, McGraw said.
“We’re exploring options to create a ‘fund of funds’ model, which will provide access to some of the most well established long term global fund managers for Australian retail investors,” he said.
It adds up to an exciting period of growth for the platform, where a public listing will help the executive team pursue their goal of establishing a platform that offers “a full suite of services in the investment space,” McGraw said.
And he reiterated that it’s all built off the reputation Equity Story has established in the market through 10+ years of hard work.
“That’s what we pride ourselves on above anything else — our reputation,” McGraw says.
“Our team gets in front of the camera every day and puts their reputation on the line. They make calls and they don’t sit on the fence.”
“So to sustain a business for this long and still have one of the strongest reputations in the market says a lot about the type of service that we deliver.”