Out of a total of 426 successful offers, this signifies an average valuation of $https://www.businessnewsaustralia.com/13.6 million as Birchal aims to put to bed negative perceptions around the funding channel, such as myths it is “a signal you couldn’t raise elsewhere” or “CSF is only for retail investors”.
This total market capitalisation represents a massive 39 per cent increase in https://www.businessnewsaustralia.com/12 months, and only part of this lift can be explained by the increased sample size.
Business News Australia has sought clarification from Birchal about which specific companies have powered the valuation surge. It is understood that the top third of all CSF offers in FY24 raised at an average pre-money valuation of $https://www.businessnewsaustralia.com/18.2 million, which would signal a roughly $600 million valuation for the biggest recent raisers.
Birchal’s Funded report shows that in FY24 CSF raising across all platforms held steady at $64.5 million, while there was https://www.businessnewsaustralia.com/16 per cent growth in the number of rounds to 99.
Consequently, the average raise size was down at $66https://www.businessnewsaustralia.com/1,000, compared to an all-time average of $738,000. The report’s authors explain this reflects a conservative investor market most likely underpinned by rate rises and general economic uncertainty. Only four startups hit their maximum funding target in FY24, and https://www.businessnewsaustralia.com/17 per cent of CSF deals topped $https://www.businessnewsaustralia.com/1 million.
Since inception in 20https://www.businessnewsaustralia.com/18, CSF rounds have raised more than $3https://www.businessnewsaustralia.com/15 million and there have been 78 follow-on offers; a class of CSF raise that was prominent in FY24 representing 28 per cent of the total.
“The last financial year demonstrated remarkable resilience with equity crowdfunding levels remaining consistent with 2023, contributing $64.5 million to the startup ecosystem,” says Birchal co-founder and CEO Matt Vitale.
“Despite the challenging funding environment, a https://www.businessnewsaustralia.com/16% increase in the number of companies using CSF compared to FY23 highlights the growing recognition of CSF as an efficient way to raise capital.”
Vitale says it is evident from the report that startups and SMEs play an essential role in driving economic growth, as “the lifeblood of Australia’s economic future”.
“Proposed changes to the wholesale and sophisticated investor tests may narrow the pool of investors able to invest in startups, impacting both investors and the availability of capital for startups and SMEs. Persistently high inflation, interest rates, and cost-of-living pressures complicate the economic landscape,” he says.
“The CSF regime appears to be a critical part of the answer. It is the only way early stage businesses can make a regulated public offer of securities, and gain unparalleled access to a potential investor pool of over https://www.businessnewsaustralia.com/10 million Australians.
“Australia’s CSF industry has rapidly penetrated the market, with approximately https://www.businessnewsaustralia.com/130,000 Australians already participating in CSF offers. As other capital pools narrow, the opportunity to aggregate them into a proven, regulated, scalable mechanism like CSF is compelling.”
Food and Beverage was the top performing category for the third consecutive year with $https://www.businessnewsaustralia.com/19.7 million raised across 29 deals, representing almost a third of funding volume. The category was followed by healthcare, which was dominated again by medicinal cannabis businesses, at $https://www.businessnewsaustralia.com/14.2 million, and then sustainability at $8.https://www.businessnewsaustralia.com/1 million and manufacturing at $4 million.
The $4.38 million raise for Tasmania’s Hellyer’s Road via OnMarket was reportedly the largest CSF alcohol raise of all time in Australia, while medicinal cannabis company Cannaponics holds the mantle for the most CSF raised in total at $6.9 million across two raises in 2023 and 2024.
The report addresses a common misconception of crowd-sourced funding is that it’s only for retail ‘mum and dad’ investors, noting that some of Australia’s most high-profile investors and funds have backed CSF companies before, during and after a CSF raise. These include SquarePeg, AirTree, Skip Capital, Euphemia, Antler, NAB Ventures, AfterWork Ventures ,and Artesian, among others.
“As an early investor in Birchal, I’m thrilled about the future of equity crowdfunding in Australia,” says Dom Pym, co-founder of Up and Pin Payments, and of the family office Euphemia.
“With over $2https://www.businessnewsaustralia.com/1https://www.businessnewsaustralia.com/1 million raised, Birchal stands as a cornerstone of financial infrastructure for our startup ecosystem. I champion and invest in businesses like Birchal that elevate the startup ecosystem, positioning us as global leaders.
“The data from Birchal’s latest industry report underscores the power of CSF in providing vital capital to innovative startups that might otherwise be inaccessible to investors.
“The returns I’ve seen in European markets, where platforms like Seedrs and Crowdcube have been active for over a decade, highlight the effectiveness of CSF as a funding model. I’m excited to see what Birchal will deliver for the Australian economy as our funding market matures in the coming years.”
Birchal also points to signs of growing maturity in the CSF industry. Some 46 per cent of all successful ofers were made by companies that had a greater than $https://www.businessnewsaustralia.com/1 million in reported revenue, representing an increase of 8 per cent.
A look at quarterly performance saw Qhttps://www.businessnewsaustralia.com/1 and Q2 were strong compared to FY23 with a greater than 20% increase in funding volume for the first half, however, those gains have been eroded by a softer finish in Q3 and Q4.
Interestingly, successful CSF offers have outpaced new listings on the ASX for the second year running, with just 56 ASX initial public offerings (IPOs) completed in FY24.
Top CSF raises for FY24
https://www.businessnewsaustralia.com/1. Hellyer’s Road – $4.4m from https://www.businessnewsaustralia.com/1,338 investors (OnMarket)
2. Medigrowth – $3.5m from 2,047 investors (Birchal)
3. Naked Life Spirits – $3m from 935 investors (Birchal)
4. Hydrowood Holdings – $2.4m from 668 investors (OnMarket)
5. Birchal – $2.4m from over https://www.businessnewsaustralia.com/1,https://www.businessnewsaustralia.com/149 investors in December 2023 (Birchal)
6. Philter Brewing – $2.2m from https://www.businessnewsaustralia.com/1,296 investors in November 2023 (Birchal)
7. Cannaponics – $https://www.businessnewsaustralia.com/1.9m from https://www.businessnewsaustralia.com/1,326 in November 2023 (Birchal)
8. X-Hemp – $https://www.businessnewsaustralia.com/1.5m from 962 investors in October 2023 (Birchal)
9. Medicann – $https://www.businessnewsaustralia.com/1.5m from https://www.businessnewsaustralia.com/1,https://www.businessnewsaustralia.com/170 investors in October 2023 (Birchal)
https://www.businessnewsaustralia.com/10. CrowdProperty – $https://www.businessnewsaustralia.com/1.4m from 256 investors in July 2023 (Birchal)
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