Equity crowdfunding platforms Birchal, Equitise and OnMarket have completed fund raising transactions under the new crowd-soured funding rules, and there are plenty of deals in the pipeline.
The Sporting Globe, a pub in Plenty Valley on Melbourne’s outskirts, raised $1.2 million on the Birchal platform. In addition to receiving shares in the company, investors will be entitled to become part of a club offering discounts and specials.
Banking startup Xinja raised $2.4 million on the Equitise platform. The offer attracted around 1319 investors, who invested an average of around $1800.
Xinja has an Australian Credit Licence and says it hopes to receive its banking licence later this year. It has launched a prepaid payment card and plans to launch a home loan in coming months.
Energy retailer DC Power raised $2.4 million on the OnMarket platform, with 17,581 investors buying shares. The company deals exclusively with households equipped with solar panels.
The CSF regime was launched in September last year, providing a retail funding opportunity for small public companies.
In January, the Australian Securities and Investments Commission announced that it had licensed seven companies to operate as intermediaries under the new rules.
The seven companies are Equitise, Birchal, OnMarket, Big Start, Billfolda, Enable, Capital Labs.
A number of them have current trasactions posted on their websites.
Under the new rules, small investors are able to invest up to $10,000 per company per year via an intermediary platform.
Platforms can only be operated by licensed intermediaries that have specific authorisation to provide a crowdfunding service.
Unlisted public companies can use crowdfunding platforms to raise up to $5 million a year by issuing ordinary shares. To be eligible they must have less than $25 million in assets and annual revenue.
Investor protections include a 48-hour cooling-off period, a prohibition on offers of financial assistance to enable investments in offers, and a requirement to obtain a risk acknowledgment prior to accepting an application.
Platform providers must act as “gatekeepers” – checking company details and investment information before placing the offer on the platform.
The Government has legislation in place to extend CSF to proprietary companies, which is a much larger group of businesses.