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As revealed in a new report compiled by Australia's leading crowdfunding platform, Birchal, Australia’s crowdfunding environment remained relatively stable with some large changes in the sectors that were successfully funded.
In 2023 a total of $71 million was raised over 82 crowdsourced funding offers from over 35,000 investors across all successful crowdfunding campaigns.
"Whilst the 2023 result for the industry as a whole has reported similar volumes to 2022, and system growth was flat, being able to maintain this level of funding reveals the substantial contribution of CSF to the ecosystem and is further evidence that despite persistently challenging funding conditions, equity CSF remains a lifeline and reliable source of capital for Australian startups." CEO of Birchal, Matt Vitale
Industry trends
Although activity remained stable in the crowdfunding landscape, there were shifts within the market of industries that secured funding. The following numbers encompass the all the successful crowdfunding campaigns hosted on all platforms.
Historically dominant, beer-related businesses, which comprised over half of the Food and Beverage category's $28 million in 2022, experienced a surprising downturn in 2023. They raised just $2.7 million across two campaigns. This downturn contrasts sharply with the overall Food and Beverage sector's performance in the previous year, where it raked in $14.3 million.
Another sector witnessing a spike in interest was healthcare, which emerged as the second most-invested industry in 2023. While described as ‘healthcare’, the majority of funds flowed to cannabis businesses that raised $10.9 million across four campaigns (a staggering 82% of all healthcare funding). A standout in this category was Cannaponics, a cannabis business that successfully raised $5 million in May 2023.
The graphic below highlights the top 4 industries that took in over 68% of the crowdfunding market in CY2023.
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- Food & Beverage, 24 investment offers raising $21.6M (31%) from 9,728 investors.
- Healthcare, 9 investment offers raising $13.3M (19%) from 7,521 investors.
- Sustainability, 12 investment offers raising $7.6M (11%) from 5,494
- Consumer Goods, 8 investment offers raising $4.7M (7%) from 2,632
Looking at the top ten companies, we see the list was dominated by healthcare (cannibis) and beverage companies.
- Cannaponics raised $5m from 2,771 investors in May 2023 (Birchal)
- Medigrowth raised $3.5m from 2,047 investors in August 2023, (Birchal)
- Naked Life Spirits raised $3m from 935 investors in July 2023, (Birchal)
- Old Young’s raised $2.7m from 855 investors in March 2023, (Birchal)
- Hydrowood Holdings raised $2.4m from 668 investors in July 2023, (OnMarket)
- Birchal raised $2.4m from over 1,149 investors in December 2023, (Birchal)
- Dargo Hotels raised $2.3m from 412 investors in June 2023, (OnMarket)
- Philter Brewing raised $2.2m from 1,296 investors in November 2023, (Birchal)
- Our Cow raised $2.1m from 1,149 investors in March 2023, (Birchal)
- Zhik raised $2m from 116 investors in April 2023, (Equitise)
The list below highlights the top four industries that brought in over 68% of the crowdfunding market in CY2023.
- Food & Beverage, 24 investment offers raising $21.6M (31%) from 9,728 investors.
- Healthcare, 9 investment offers raising $13.3M (19%) from 7,521 investors.
- Sustainability, 12 investment offers raising $7.6M (11%) from 5,494
- Consumer Goods, 8 investment offers raising $4.7M (7%) from 2,632
Looking at the top ten companies, we see the list was dominated by healthcare (cannabis) and beverage companies.
- Cannaponics raised $5m from 2,771 investors in May 2023 (Birchal)
- Medigrowth raised $3.5m from 2,047 investors in August 2023, (Birchal)
- Naked Life Spirits raised $3m from 935 investors in July 2023, (Birchal)
- Old Young’s raised $2.7m from 855 investors in March 2023, (Birchal)
- Hydrowood Holdings raised $2.4m from 668 investors in July 2023, (OnMarket)
- Birchal raised $2.4m from over 1,149 investors in December 2023, (Birchal)
- Dargo Hotels raised $2.3m from 412 investors in June 2023, (OnMarket)
- Philter Brewing raised $2.2m from 1,296 investors in November 2023, (Birchal)
- Our Cow raised $2.1m from 1,149 investors in March 2023, (Birchal)
- Zhik raised $2m from 116 investors in April 2023, (Equitise)
Notably, coming in at number 6, Birchal itself raised $2.4M on its own platform from 1,149 investors, demonstrating the company’s strong belief in its own model
Other highlights in the report worth calling out include:
- Businesses with more than $1M of revenue accounted for 41% of all successful CSF Offers in 2023 (down 14% in 2022).
- Businesses that were pre-revenue accounted for 29% of the successful CSF Offers in 2022, raising a median amount of $441K
Shifts in the crowdfunding market
The market also 3 providers dominate the fundraising market. Birchal, Equitise and OnMarket raised 71 of the 82 deals in Australia. Of these, Birchal alone accounted for more than 80% of the deals.
We also saw a sharp increase in crowdfunding campaigns closing in the last quarter of the 2023 calendar year, with 35 deals closing between October and December.
Looking forward to 2024, the market is set for another strong and resilient year. Trends emerging in the last quarter of 2023 suggest that momentum is growing in the crowdfunding sector as brands look to form deeper connections with their biggest fans. The crowdfunding market is clearly entering a stage of maturation after commencing in 2018 (with the Corporations Amendment (Crowd-sourced Funding for Proprietary Companies) Act 2018), and more brands and investors are becoming comfortable with the business model.
One emerging dynamic to watch is the proposed changes to the sophisticated investor test. Should the changes proposed by the Federal Government go ahead, investors who were once able to participate in angel investments may now be pushed into crowdfunding, which could see significant inflows of fresh angel capital.
Read the full report from Birchal here.
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