ASIC grants first intermediaries licenses to open up equity crowdfunding to retail investors

- January 12, 2018 2 MIN READ
equity crowdfunding

After years of lobbying from the startup sector, it’s done: retail, or mum and dad, investors now have access to equity crowdfunding opportunities through the seven intermediaries this week granted licenses by the Australian Securities and Investment Commission (ASIC).

ASIC opened applications for intermediaries looking to host crowdsourced equity funding – as the government calls it – offers in September following the passing of new regulations passed early last year, which allow for retail investors to invest up to $10,000 per company in a 12 month period, with a cooling off period of five days, up from 48 hours.

John Price, ASIC Commissioner, said the regulator has been assessing applications “as a matter of priority”, as intermediaries had to be licensed before fundraising under the new regulations could begin.

“Intermediaries have an important gatekeeper role which will be key to building and maintaining investor trust in crowdsourced fundraising, so we are pleased to have now issued the first tranche of authorisations,” he said.

Awarded licenses were Big Start, Billfolda, Birchal Financial Services, Equitise, Global Funding Partners, IQX Investment Services, and On-Market Bookbuilds.

Having for years lobbied the government to open equity crowdfunding up to retail investors, Equitise cofounder Chris Gilbert said, “This groundbreaking change means Australians can now put their money behind what could become the next Atlassian or Canva and support early stage local companies.”

With its hard-won license, Equitise has already launched its first offering, for challenger bank Xinja. With the bank looking to raise a minimum of $500,000 through the platform, investors will be able to buy a stake in the company for $250.

Eric Wilson, CEO of Xinja, said the bank’s “pre-launch customer base” had told Xinja that they “want to be involved from the very start”.

“It is fantastic that these regulatory barriers have been removed and Xinja can now access the funds needed to help build our product offerings and give the entrenched banks something to think about,” Wilson said.

Birchal too has gotten down to business, opening three expressions of interest campaigns. Looking to raise through the platform are SAMPLE Brew, a Melbourne-based craft brewer; shaving club startup Oscar Razor; and GreenCo Water, which has created a water storage system.

Cofounded by Matthew Vitale and Alan Crabbe, Birchal is an offshoot of Australian rewards-based crowdfunding platform Pozible, of which Crabbe is also a cofounder.

The platform was launched last August after two years in development, with the Pozible team recognising a desire among its crowdfunders for a more extensive solution.

Under the equity crowdfunding regulations, unlisted public companies with up to $25 million in annual turnover and less than $25 million in gross assets will be able to to raise up to $5 million via licensed intermediaries over a 12 month period.

Image: Equitise cofounders Jonny Wilkinson and Chris Gilbert. Source: Supplied.

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