Investec invests in crowdfunding platform Equitise
New Zealand-based crowdfunding platform Equitise has raised more than $1 million from specialist bank Investec Australia to fund a hiring push and an expansion into Singapore.
The terms of the investment were not disclosed, but Equitise co-founder, Australian Chris Gilbert, said it valued the platform at about $10 million.
"We're looking to expand to Singapore because of the slowness of the Australian government's crowd-sourced equity funding legislation," he said.
Equitise co-founder Chris Gilbert says Investec's investment will fund an expansion to Singapore and new staff.
"In the next 12 months we want to be operational in Singapore and also possibly some other Asian geographies where they're legislating crowdfunding in a similar way to New Zealand."
The investment makes Investec the largest stakeholder behind Equitise's founders Mr Gilbert and Jonny Wilkinson, who is a former Citi banker. Other investors include H2 Ventures and Tank Stream Ventures.
Mr Gilbert said Investec would be taking a hands-off approach to the investment, but wanted to take advantage of the fintech boom.
"They definitely don't want to be involved in the day-to-day operations – they made that point very clear to us. But they will take a board seat at some point in the future, but that hasn't been a matter of urgency to them.
"The investment is just accessing a growing market for them and they see fintech as the way of the future."
Slow to develop legislation
Mr Gilbert was forced to launch Equitise in New Zealand because the Australian government had been slow to develop crowd-sourced equity funding legislation.
Now he says he might never be able to bring the platform to Australia, believing the legislation before Parliament has been rushed.
"We don't see the legislation as being workable," he said.
"We'd always consulted in absolute detail with government and been very supportive of Bruce Billson, but Small Business Minister Kelly O'Dwyer has made it pretty clear she doesn't want to take feedback from industry on board."
Mr Gilbert's main gripes with the legislation are the stipulation eligible companies must have less than $5 million in consolidated assets and revenue, and the five-day cooling off period on deals, which he believes could cause market manipulation.
"The $5 million asset and revenue test doesn't make any sense . . . it means you're funnelling retail investors into high-risk opportunities," he said.
"It also means you're limiting the business models of intermediaries like Equitise. There will be intermediaries that want to specialise in pre-IPO companies, or health tech companies, but this is forcing people into the early-stage category. Trying to get a decent fee from an early-stage business is also difficult."
Sophisticated investor market
Equitise uses its New Zealand licence to tap into the sophisticated investor market in Australia.
In 11 months the platform has raised $3.5 million for six deals, with the quickest raise being $455,000 in only seven days.
The company was also named in KPMG's global fintech 100.
Equitise is about to raise $2 million out of a $10 million global fundraising round for sportswear company SKINS.
"In the next six months we should get well past $15 million through deals we have mandated to go forward. We should have five more deals up next week," Mr Gilbert said.
"By the end of the year we're hoping to approach $30 million in capital raised."
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