Crowdfunding platform Equitise has been handed to voluntary administrators after cofounder Jonny Wilkinson failed in his own attempts to raise a $500,000 bridging round.
Administrators Damien Mark Hodgkinson and Mohammad Mirzan Bin Mansoor from Sydney firm Olvera Advisors were handed the books on October 31.
An initial creditor’s meeting will be held on November 12.
The administrators did not respond to requests for comment.
Equitise managing director Jonny Wilkinson said the move gives the platform the chance to regroup.
“After a decade building Equitise, this is a challenging juncture. I am deeply grateful for the unwavering support of our shareholders and partners throughout this period,” Wilkinson said.
“Our commitment to the vision of democratising investment continues, as we explore our options and opportunities. The decision to enter voluntary administration provides a structured path forward to do so”
Crowd-sourced funding (CSF) has struggled amid a broader downturn in venture funding in the post-Covid era as the cost of capital rose.
Market leader Birchal’s annual report into the sector noted that while the number of deals in FY24 rose by 16% to 99, the total investment pool flatlined at $65 million, up just 2%. Birchal was a notable success story, raising $2.39 million last December on its own platform. It also has the lion’s share of the market, deliver two-thirds of the year’s successful raises, worth $46.5 million.
Rival VentureCrowd has also been on the hunt for funds, seeking $14.5 million convertible note via its platform. The company now has 93% of its minimum target of $9 million with just over a month to go on the campaign.
Equitise was Australia’s second-largest CSF platform in FY23, with $10.6 million raised across 13 deals, most notably Zhik raising $2m among four $1m+ campaigns. But last financial year it barely rated a mention, with Fractel, raising $750,000 and fell behind OnMarket ($8.2m) and Swarmer ($5m) in terms of total funds raised.
In April, New Zealand’s Financial Markets Authority (FMA) cancelled its equity crowdfunding licence after Equitise failed to lodge its audited 2023 financial statements by October 30 last year, among A “history of non-compliance with various legislative and other obligations”, according to the regulator. Equitise was previously deregistered from New Zealand’s Financial Service Providers Register in August 2023.
Jonny Wilkinson said at the time that the Kiwi arm of the platform was no longer sustainable.
“The subdued market and increasing time and costs required for regulatory adherence means that it is unsustainable to maintain our NZ operations for the time being,” he said.
Crowdfunding kicked off in New Zealand in 2014, and became legal in Australia September 2018. It allows retail investors to plough up to $10,000 into a private company, although six years on, few have made the transition to public markets and there have been some notable failures alongside CSF investors being shortchanged in M&A deals.
Earlier this year corporate regulator ASIC issued its first interim stop order over a CSF campaign over concerns about the structure of shares issued to potential CSF investors involving Hirehood, a marketplace for hiring holiday items, raising funds on VentureCrowd.
Concerns about the value and fine print on shares in CSF offers also came to the fore when Sydney bike helmet tech company Forcite was acquired by Nasdaq-listed camera business GoPro in January this year.
CSF investors who backed Forcite took a nearly 90% haircut even as other investors booked a gain. Forcite raised $1.3 million at 23 cents a share on Equitise in 2022 at a $24 million valuation. But when the sale went through, reportedly at more than $20 million, CSF investors were offered just 2.9 cents per share, a loss of around 87% on their investment.