Crowdfunding small slice of startups' record fundraising

It’s been a bumper quarter for startup capital raises but Australia’s much heralded equity crowdfund format is contributing less than half a per cent of the cash.

A quarterly funding report from Techboard released on Wednesday shows startups raised more than $2.6 billion in the three months to March. Venture capital contributed $477 million to this, while crowdfunding delivered just $7.4 million.

The remainder was made up of funds from acquisitions, grants, initial coin offerings and ASX listings. This quarter’s figures were turbo charged by the $1.6 billion acquisition of PEXA.

The crowdfunding model has been championed by the startup sector as a way for early stage companies to more easily raise funds by turning to their fans for capital.

While the $7.4 million is double what was raised in the previous quarter, close to half of it came from just one raise: a record $3 million invested in women’s rideshare platform Shebah. The company also broke the mould by having close to 95 per cent of its investment come from women.

When equity crowdfunding legislation was opened up to proprietary companies last year, many heralded it as a boon for local companies wanting to raise funds.

It allows unlisted companies to raise funds from the general public, with much lower minimum investment thresholds than a typical equity raise.

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Source: Crowdfunding small slice of startups’ record fundraising