A just released report on equity crowdfunding in Australia shows the industry has surged 60% in the last two years, with total raised increasing from $28.3m to $41m in 2021.
The Equitise Equity Crowdfunding Industry Report 2021 highlights the industries seeing the biggest equity crowdfunding success and future trends based on changing business models.
The Equitise Equity Crowdfunding Industry Report
Equitise co-founder and managing director Jonny Wilkinson says the pandemic has changed many aspects of everyday life – how we shop, access to our food and how we do business.
“We have highlighted the four biggest industries to watch in this space in the last few months of 2021 are direct-to-consumer and online shopping, sustainable food alternatives, telehealth and craft breweries or low to no alcohol alternatives,” says Mr Wilkinson.
“E-commerce is on a growth trajectory, as the pandemic changes how we shop.”
“D2C contributes about 10% of retail in Australia, compared to the 20% – 30% of the overall retail level overseas set to reach $4.5tn by the end of this year globally,” Mr Wilkinson says.
“Activity in the e-commerce space is rapidly growing, with companies such as adult acne disrupter tbh skincare currently running equity crowdfunding campaigns.”
“Both digitally native companies are seeing exponential growth as Tbh skincare has turned over $798k in the last 18 months and baresop has sold over 3000 units since launching.”
“Another area is plant-based meat which looks set to disrupt the global meat industry.”
Last year venture capital invested $1.5 billion in alternative proteins with the market expected to increase from $3.6 billion in 2020 to $4.2 billion by the end of this year.
By 2040 plant-based or cultured meat products will account for 60% of all meat sales.
“Companies like Beyond Meat have experienced exponential growth with its IPO being the best performing by a major United States of America company in almost two decades.”
“Your Food Collective is creating traction in its equity campaign through its branding around online grocery penetration, sustainable supply chains and better eating habits.”
Since opening nearly four years ago, the company has grown on average 135% year on year, with a revenue of $1.7 million, on track to be tripled this year.
They source from over 100 growers and producers and facilitate a 44% reduction in food-related carbon footprint for some 10,000 people that they service across the country.
“Consumers love sustainable foods and are willing to make that extra effort to shop for them.”
The health industry is transforming from in-person care to virtual delivery in real time fast tracked by the pandemic as patient adoption of telemedicine jumped 33% in the first quarter of 2020 compared to 2019 with the market predicted to reach $185.6 billion by 2026.
“Funding activity in this space will start to dominate like Eucalyptus, who own and operate several digital healthcare companies closing out a $30 million funding round.”
“With 83% of patients expected to use telemedicine after the pandemic resolves, there’s no doubt that this trend is here to stay.”
Highlights of the Equitise crowdfunding report
The equity crowdfunding report also highlights which industries have been strongest to date since the change of legislation in 2017 with Fintech, alcohol and food being the top sectors.
- Fintech: 24 Fintech ECF raises totalling $19.5m.
- Alcohol (covering beer, wine, spirits): 14 alcohol ECF raises totalling $9.9m.
- Food: 13 Food ECF raises totalling $6.74m.
“With increased technology and consumer expectations plus the Royal Commission‘s spotlight on the financial services industry, fintech startups are turning to the crowd to raise capital.”
“Two standout sectors in the broad fintech industry have been neobanks, such as Parpera and Thrive, as well as cryptocurrency apps such as Qubix and Coinstash.”
“In 2020 alone there were 49 new blockchain-related startups. With a mission to democratise currency, it also works well with equity crowdfund’s mission to democratise investing.”
“The drinks industry, in particular craft beer and craft distilling, also has a strong crowd funding track record in Australia. Investors get the opportunity to support the brands they enjoy and resonate with while also receiving great investor rewards.”
“Look at Batch Brewing Co. which closed a $1.5 million equity crowdfund in less than two days being public. Batch leveraged its deep community ties resulting in a record-breaking campaign whilst welcoming its customers to join its growth journey into more venues.
“We expect to see a continued increase in crowd funding for craft beer and craft distilling as these industries continue to experience significant growth.”
“We already have another offer live on the site and are in discussions with more breweries.”
