Money has started flowing into startups after ASIC licensed seven crowd-sourced funding (CSF) intermediaries last week.
One intermediary, Equitise, raised $500,000 from retail investors for bank startup Xinja in less than 24 hours, reported
Business Insider Australia.
The bank targeted to raise a minimum of $500,000 through Equitise’s platform, and capped the fundraising at $3m. Investors could buy a stake in the company for as little as $250.
Xinja launched its crowd-sourced funding campaign through Equitise the same day ASIC issued the licenses. The company aims to provide Australians with 100% digital banking services that are not associated with any of the four major banks.
The new CSF regime allows startups and SMEs to raise funds with fewer regulatory requirements compared to other means of public fundraising. It is designed to provide them with a new means of accessing capital.
Only unlisted Australian public companies can use the fundraising scheme— and they need to have less than $25m in assets and annual revenue to qualify. Eligible firms can raise up to $5m a year through CSF, while investors can invest up to $10,000 a year in these companies through CSF intermediaries.
ASIC Commissioner John Price called the issuance of the licences a milestone for crowd-sourced funding in Australia.
“Intermediaries have an important gatekeeper role that will be key to building and maintaining investor trust in crowd-sourced fundraising, so we are pleased to have now issued the first tranche of authorisations,” he said.
Besides Equitise, ASIC awarded CSF licences to Big Start, Billfolda, Birchal Financial Services, Global Funding Partners, IQX Investment Services, and On-Market Bookbuilds.
IQX launched its platform the same day it received its licence. The platform, Capital Labs, focuses on biotechnology and life science equity crowdfunding investments.
Birchal is running the crowd-sourced funding exercise of The Sporting Globe Plenty Valley, a sports bar set to open in March, with a minimum target raise of $700,000.
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