Australia’s crowd sourced funding (CSF) has closed out the financial year with a record June quarter, as equity crowdfunding (ECF) activity doubled to $47m — a 620% increase on the year prior period.
The data was highlighted by Birchal, the platform behind 70% of Australia’s CSF activity, as part of its Funded!2021 report.
And Birchal said it shows that despite the continuing impact of COVID-19, funding volumes have doubled in the 12 months to June 2021.
Financial services were the most invested industry in FY21, with 13 successful CSF offers raising $14.7 million, 31% of all funds raised through CSF for the year.
The three largest campaigns were fintech company Thrive which set a record of raising $3 million in three days, Coinstash at $2.8 million and Unhedged with $2.3 million.
Those three raises accounted for 55% of the total in the financial services category.
The food and beverage industry came in second raising $8.7 million, followed by software at $7.1 million and Health Care businesses at $6.5 million.
Breaking down the numbers
Since the start of Australia’s crowd sourced funding industry in 2018, more than 144 Australian businesses have raised $100 million to fund their enterprises in exchange for shares, Birchal said.
Those funds have been raised from a collective group of more than 68,000 investors.
The average deal size was $690k, with an average investment per investor $1,461. The biggest investor to date was confident enough to invest $1 million in Shebah Rideshare in 2019.
Birchal Co-founder and Managing Director Matt Vitale told Stockhead equity crowdfunding had fast grown to become the go-to funding source for Australia’s promising small businesses and startups.
“Early-stage businesses need to raise capital to expand, and CSF is proving to be an opportunity for them to increase their audience of people interested in investing,” Vitale said.
“For investors, CSF is an opportunity to get exposure go a new and exciting asset class and it’s become the go-to funding source for Australian early-stage enterprises.”
While the final quarter of FY19/20 was affected as the repercussions on the global economy of the COVID-19 pandemic was coming to light, Vitale said CSF was proving its resilience in difficult economic circumstances.
And he said historical evidence points to the effectiveness of CSF during periods of economic disruption.
“The most mature CSF market is in the UK, and that emerged out of the Global Financial Crisis 2008 as a new innovation during a period when securing early-stage funding was more difficult,” Vitale said.
While there were many more players in the early days of the CSF market in Australia, activity has continued to consolidate towards the major platforms – Birchal, Equitise and OnMarket.
Vitale is confident the industry will continue to achieve strong growth. Already the FY21/22 year is off to a solid start with 10 successful CSF offers raising $7.8 million on Birchal in July so far.
“The UK equity crowdfunding industry facilitated investments of approximately $400 million in the 2020 calendar year, and looking forward we have expectations of achieving similar growth relative to the size of our local economy,” he said.