Best equity crowdfunding year in Australia – $86m!

Aussie equity crowdfunding has hit a new high, with $86 million raised from more than 43,000 investments in FY22 making it the biggest financial year.

The findings are from crowd-sourced funding platform Birchal, the triple Hammer Award winners in the consecutive years at Pause Awards, reporting on the sector’s performance during the last financial year.

According to the ‘Birchal’s Funded!’ report, they maintained its leading position in the crowd-sourced funding industry during FY22, completing 68 of the 98 successful offers (70% of the total) and facilitating $62.4 million of the total raised during the year.

The platform was followed by Equitise (responsible for 13 raises securing $11 million for Australian companies) and OnMarket (which facilitated the raise of $8 million for 12 companies).

“I think the jolt of energy that a company gets from a successful equity crowdraise can help from many different angles – it helps double down on growth, it awards a company with a new, passionate base of investors, and it gains a company extra attention both from the media and the broader public.”

David Swan, Technology Editor, Australian

Top funders

Some significant milestones were achieved in FY22. ZeroCo became the first company to raise $5m in a single offer in less than seven hours, the maximum that can be raised under the crowd-sourced funding regime. 

And Montu became the biggest raiser, completing a successful $3.5m follow on round bringing its total raised to $5.5m across two offers.

Birchal itself was hot on the startup’s heels – securing $3 million from 595 investors in a raise that seemed to happen in less than three minutes.

Other companies that made up the Top 10 offers for FY22 were Neutrog ($3 million from 782 investments), Our Cow ($2.6 million), Black Hops ($2.2 million) and Kester Black ($2.2 million).

Numbers by State

Funding activity has increased across the country with most States achieving significant increases in successful deals and funding volume.

Victoria had the most successful companies, with 35 offers completed raising $28.4 million. New South Wales followed with 30 companies that raised $400,000 more than their southern counterparts.

In Western Australia, $12.5 million was raised across 12 offers, and in Queensland $11.5 million was raised across 17 equity crowdfunding initiatives. South Australia contributed with $4.6 million raised across four offers.

By company stage

Growth Businesses (with greater than $1m in reported revenue) represented the highest proportion of successful offers for the first time in FY22, representing 34% of all successful offers, and an increase of 112% in FY21.

The proportion of successful offers saw a significant decline in FY22, with just 21% of the total compared to 38% of all offers in FY21. 

Pre Revenue Businesses offers for businesses that reported has grown considerably in FY22, with 22 of the 98 (or 22.5%) successful CSF offers reporting positive earnings at the time of their CSF offers, an increase of 102% on FY21.

Sector by industry

The food and beverage companies dominated – with 33 successful offers raising a total of $29.5 million – representing 34% of all funds raised through crowd-sourced funding platforms.

Beer and alcohol-related business made up 50% of the total food and beverage investments during the year, with 12 campaigns raising a total of $15 million for companies including Black Hops, DrinkWest, Bridge Road Brewers, Sobah Beverages and more.

1. Food and Beverage $29.5m funding; 33 deals; 13,036 investors
2. Sustainability $13.2m funding; 9 deals;  8,202 investors
3. Health Care $7.8m funding; 6 deals; 3,292 investors
4. Agriculture and Farming $7.8m funding; 8 deals; 3,383 investors
5. Financial Services $7.5m funding; 6 deals; 2,246 investors

Sustainability was the next most invested category, raising $13.2 million – $5 million of which went to crowd-sourced funding darling ZeroCo Other companies that completed raises in this category included Hero Packaging, Line Hydrogen, Plat Protector Packaging and Indigo Power.

Other popular industries were Health Care ($7.8 million in funding volume), Agriculture and Farming ($7.8 million in funding) and Financial Services ($7.5 million in funding).

“The crowd-sourced funding industry continues to go from strength to strength, bringing with it strong media interest as businesses and brands that have not been able to secure financial backing from. Investors that backed these companies have achieved tremendous growth in the value of their investments, albeit on paper at this stage.” 

Matt Vitale, Co-Founder, Birchal

Looking ahead

For FY23, Birchal has reported $5.7 million has already been raised on the platform in the first two weeks of July, which is the great start of a new year.

This includes a $2.2 million raise completed by t-shirt maker Threadheads, $1 million raised by fashion company Citizen Wolf, and memobottle completing a $408,000 raise.

West Australian distillery and bar Republic of Fremantle today announced it achieved a total investment of $1 million today from 449 shareholders, with the largest investment placed in the final four seconds of the raise facilitated by Birchal.

If you’d like to download the report, head over to Birchal’s website.