Australia’s equity crowd funding volumes soar 89pc: Birchal

New statistics show the industry has nearly doubled compared to the same time a year ago, with investors increasingly hungry to back unlisted companies.

Australia’s equity crowd funding industry has defied what’s typically the quietest period of the year, growing by 89 per cent year-on-year in the latest quarter.

Equity crowd funding volumes exceeded $10m for the three months to March 31, representing 89 per cent growth – compared to a 57 per cent decline for broader equity capital markets – according to data from crowd funding platform Birchal.

Amid what’s traditionally a sluggish period for the industry, standout crowd funding campaigns include Gold Coast brewer Black Hops, which raised its maximum target of $2.2m at a pre-money valuation of approximately $65m, representing a valuation uplift of 261 per cent on its first campaign in January 2019.

Other highlights include Torquay-based adventure apparel brand Zorali, which returned to Birchal for a second time after completing its first successful crowdsourced funding (CSF) offer in 2019, this time raising its maximum target of $1.2m at a pre-money valuation of $12.25m, representing a 66 per cent uplift in value from its first offer.

Hot sauce brand Bunsters also returned to Birchal for a follow-on CSF offer, with the West Australian company achieving its maximum target of $1.125m in one day, supported by more than 650 investors at a pre-money valuation of $31.4m, representing a 351 per cent uplift in value from its first offer in August 2020.

Pam Yip and Jenny Le lost their jobs during Covid but now run a DIY bubble tea making kit business, and in the last 12 months have sold more than $2m worth of products. Picture: Nicki Connolly

“CSF investors that backed these companies have achieved tremendous growth in the value of their investments, albeit on paper at this stage,” said Birchal’s co-founder and managing director Matt Vitale.

“Encouragingly, businesses who have raised earlier rounds through CSF have been executing well, and driving growth in their businesses and their investors’ portfolios.”

The report comes as Birchal readies its own offering, preparing to host its own CSF offer on the Birchal platform. That CSF offer goes live on April 12.

“The CSF industry continues to go from strength to strength,” Mr Vitale said. “Total funding volumes for the financial year to date exceed $57m across 65 successful CSF offers, about double the total funding volume of $28.4m at this time last year.

“Crowd sourced funding has fast become an efficient and effective mechanism for companies to raise capital from their most passionate customers and fans. As we’ve seen this quarter, more and more companies are creating value and returning to use the CSF regime to fund their next stage of growth.

“We’re looking forward to another quarter of strong growth to cap off yet another successful financial year for the industry.”