Start-up bank Xinja has raised $2 million of funding on the Equitise crowdfunding platform, marking the completion of the first retail equity crowdfunding deal under the Government’s new crowd-sourced funding regime.

Seventy per cent of investors in the Xinja fund raising committed less than $1000, highlighting the accessibility of the new market. Investments of $10,000, which is the maximum allowed, made up 27.7 per cent of total investments. The average investment was $1850.

Xinja has launched a prepaid payment card and plans to launch a home loan in coming months.

The company has an Australian Credit Licence and says it hopes to receive its banking licence this year.

Xinja may be a little disappointed with the results of the fund raising, which closed on March 31. The company’s co-founder and chief executive, Eric Wilson, told The Australian in January that he hoped to raise $3 million.

Wilson said: “Crowdfunding allows us to stick true to our goal to build a bank tat is owned by its customers, run by its customers and built around its customers’ problems.”

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 Financial Services, Big Start, Billfolda, Global Funding Partners (operating as Enable), IQX Investment Services (operating as Capital Labs) and on-Market Bookbuilds.

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.