The platform behind 75% of Australia’s equity crowd sourced funding (CSF) activity, Birchal, announced today it has reached a major milestone for the industry – the first platform to reach $100m in total funds raised. To mark the occasion Birchal announced it will legitimise SMEs and Startups by building Australia’s first equity crowdfunding ecosystem.
This move will establish these entities as a mainstream asset class and will facilitate secondary trading and best in class stakeholder engagement, features that will attract even more retail and sophisticated investors to Australia’s exciting startup landscape.
What is Birchal’s crowdfunding strategy?
Birchal will run an equity crowdfunding campaign on its own platform, a first for any CSF platform in Australia, and the first time retail investors can buy shares in the company.
“The timing for Birchal to achieve $100m in raised revenue on behalf of its clients couldn’t happen at a more perfect time than announcing our plans to establish an equity crowdfunding ecosystem,” said Matt Vitale, Co-Founder and Managing Director of Birchal.
“There is currently no organised marketplace for retail investors to trade securities in startups and SMEs – so we’ve decided to focus on providing a range of solutions to solve this.”
“Effective secondary trading solutions will reduce binary ‘win/lose’ outcomes for founders of startups; and also provide opportunities for investors to realise returns on their investments.”
“The first step is Birchal Trade, a technology solution for companies to manage the operation of a ‘Low Volume Market’ in Australia, which can facilitate up to 100 transactions and $1.5 million within a 12 month period, available to retail investors, without the need for a market licence. This service has been built, with plans to offer the first pilot in 2022.”
What is Birchal’s market network like?
The company’s numbers are looking good. Birchal has also developed a unique relationship network with Australia’s largest group of dynamic early stage businesses and their investors
- $100m raised (amount realised 17 March, 2022)
- a market-leader (with 75% share) of rapidly scaling Australian crowd-sourced funding industry growing at 70% CAGR (2018-21), estimated to be circa $500m by 2024.
- Achieved $2.2m revenue for six months ended 31 Dec 2021, with 42% operating margin.
- 28 average inbound company prospects per week.
- This is on the back of a very successful 2021 when Birchal achieved a 160% increase in funds compared to 2020. The platform completed 59 deals (66% market share), raised $53.5m (75% market share), and worked with 31,800 investors (85% market share).
“Birchal’s market position has given the company an opportunity to leverage what it has built to add more value to its stakeholders and entrench itself as market leader,” said Matt Vitale.
“We are pleased to announce startup investors like Dom Pym have thrown their full support behind Birchal, underpinning the confidence the market has in the future of the business.”
What does Birchal’s crowdfunding move mean?
One early stage Birchal investor committed to the upcoming Birchal raise is the co-founder of neobank Up which was recently acquired by Bendigo and Adelaide Bank, Dom Pym, who has previously invested a few hundred thousand dollars via his family office made these remarks.
“Although equity crowdfunding has only just started in Australia, it’s been around for a while overseas, and I’ve been following it globally. I am an investor in Seedrs and Crowdcube (two major platforms in the UK) and I’m also a participant in AngelList in the US, so I have seen how impactful businesses like these have been to startup communities over there.”
“Using equity crowdfunding platforms, I’ve invested in heaps of fintech and environmentally focused businesses globally, so was thrilled when I could do this in Australia as well.”
“I believe equity crowdfunding can be a core piece of financial infrastructure in Australia, helping Aussie founders get the capital they need to fund their ambitions,” concluded Pym.
Expression of interests opening from Tuesday 22nd March.