OnMarket will be one of the first businesses in Australia to raise capital this year through ‘the crowd’, following the Australian Securities and Investments Commission’s approval of its equity crowdfunding licence, announced today.
Equity crowdfunding brings entrepreneurs and retail investors together for the first time and is only now possible following today’s licence approval. Equity crowdfunding enables Australian retail investors to contribute as little as $50, or as much as $10,000 in a business. The new licenses follow federal legislation announced last year.
OnMarket will bring investment opportunities through Australian businesses to ordinary Australians through its online platform and app. Investors will be connected to Australian businesses like Revvies, which makes innovative caffeine strips to support the nation’s athletes. OnMarket is also in discussions with a leading Medicinal Cannabis company to raise over $2 million via equity crowdfunding.
The businesses will make history as the first in Australia to raise capital through equity crowdfunding this year.
OnMarket founder and CEO Ben Bucknell said the approval marked a significant milestone for Australian businesses and retail investors alike.
“It’s time all Australians had a fair go and access to Australian businesses of the future. Previously, investing in businesses like Revvies would only be accessible to angel investors or venture capital firms but through equity crowdfunding investment democratisation is here to stay,” Mr Bucknell said.
“Equity crowdfunding is an innovative way to fund someone else’s dream,” he said.
Equity crowdfunding is already worth $US2.6 billion in the United States, and is proving popular in the United Kingdom and New Zealand as a way for entrepreneurs to succeed. Equity crowdfunding was only established in the UK in 2013 and last year had grown to £272m in the UK.
Australia has more than 1.2 million entrepreneurs employing two thirds of the country’s 12 million workers, and already contributes more than $343 billion to the economy annually, so the opportunity from equity crowdfunding is significant.
Unlike rewards based crowdfunding, which is essentially an advance payment for a product or a gift, equity crowdfunding allows investors to have an ongoing connection by owning part of the company.
It is estimated that 200,000 small and medium sized Australian businesses have difficulty growing because banks won’t lend them money.
According to Macquarie research, Australian entrepreneurs want to borrow up to $60 billion a year more than they currently are allowed, to grow their businesses, hire new staff and innovate.
OnMarket has enabled investors to access more than 80 IPOs. Prime Minister Malcolm Turnbull launched the platform shortly after becoming Prime Minister in September 2015.
Mr Bucknell said “Young Aussies, in particular, want to make a difference and invest in businesses they believe in. In a recent survey, 79% of millennials described themselves as impact investors seeking both financial and social return.
“Likewise, Australian entrepreneurs are some of the most inventive in the world, but banks won’t lend them the money to get their businesses off the ground. Equity crowdfunding solves that problem,” Mr Bucknell said.
Under the new Australian Government rules, unlisted companies with less than $25 million in assets and revenue will be able to source up to $5 million a year through equity crowdfunding.
Australians interested in equity crowdfunding, can find out more information from the OnMarket website: www.onmarket.com.au.
CASE STUDY AVAILABLE FOR MEDIA - REVVIES - THE AUSTRALIAN INVENTION SUPPORTING AUSTRALIA’S ATHLETES
Revvies, the caffeine strips providing professional athletes with an instant energy boost, helps them beat fatigue. Revvies is looking at raising capital through equity crowdfunding to grow through increased global marketing, human resources and product development.
Approved by sporting regulators, Revvies to date have been produced in limited supplies, primarily for professional bodies. With global energy drink sales worth $US50.5 billion, the Australian invention is a more effective and sugar-free alternative ripe for disrupting the global energy drink market.
Revvies is already being used, or is being trialled, by:
§ AFL clubs Brisbane Lions, Adelaide Crows, and the Gold Coast Suns
§ NRL clubs Parramatta Eels and Penrith Panthers
§ Super Rugby Clubs the Canterbury Crusaders, Waikato Chiefs and NSW Waratahs and the All Black Rugby 7’s team
§ Professional English soccer teams Leeds United, Middlesbrough and Hull City
§ Members of the Australia Olympic team
§ United States Olympic team
§ Australian Institute of Sport
§ High Performance Sport New Zealand
§ Queensland Academy of Sport
§ Cricket Victoria including Melbourne Stars
§ A-League clubs Newcastle United Jets, Wellington Phoenix, Brisbane Roar and the New Zealand national football team the All Whites
§ Super Netball League teams Sunshine Coast Lightning and Adelaide Thunderbirds
Revvies founder John Nolan-Neylan said he was proud to support Australia’s athletes and equity crowdfunding would help the business grow.
“Unlike energy drinks, these energy strips do not contain sugar and give an instant effect. When athletes begin to tire and fade, Revvies gives them a legal hit to help them keep going,” Mr Nolan-Neylan said.
“Equity crowdfunding gives us an opportunity to accelerate our growth and bring Australians who believe in our product with us along the way,” he concluded.
Risk warning Crowd-sourced funding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of ventures is speculative and carries high risks. You may lose your entire investment, and you should be in a position to bear this risk without undue hardship. Even if the company is successful, the value of your investment and any return on the investment could be reduced if the company issues more shares. Your investment is unlikely to be liquid. This means you are unlikely to be able to sell your shares quickly or at all if you need the money or decide that this investment is not right for you. Even though you have remedies for misleading statements in the offer document or misconduct by the company, you may have difficulty recovering your money. There are rules for handling your money. However, if your money is handled inappropriately or the person operating this platform becomes insolvent, you may have difficulty recovering your money. Ask questions, read all information given carefully, and seek independent financial advice before committing yourself to any investment.
About OnMarket Crowd
OnMarket makes investing and capital raising an efficient, simple and transparent process that is accessible to everyday investors and businesses making a change in the world. OnMarket Crowd will be one of the first equity crowdfunding platforms in Australia, connecting investors with businesses that are making a change for the better. By investing in companies offering equity via OnMarket, everyday investors can share in the upside in businesses that ultimately will make a better, smarter, more sustainable world.
OnMarket Bookbuild has revolutionised the way IPOs are made available to retail investors by providing the world's first free-access portal and app for capital raisings. As a marketplace platform, OnMarket acts as the intermediary between retail investors and issuing companies. OnMarket has offered 1 in every 3 ASX IPOs to investors since launch. For further information go to www.onmarket.com.au