Another Way to Read the Market Numbers

    No Thursday afternoon is complete without a last-minute flurry of media calls.

    Yesterday, the Financial Markets Authority released its third annual Crowdfunding and Peer-to-Peer report stating that their “annual snapshot for the year to 30 June 2019 shows […] decreasing participation in crowdfunding services.

    That raised the interest of the media, which is a good thing. We believe the more people talking about our space, and learning about how it works, is great. But the FMA’s statistics paint a slightly different picture to what we’re seeing.

    What we know is PledgeMe as a platform has seen continual fiscal year on year growth in equity campaigns. Since the FMA’s 30 June year-end, we’ve already raised $8.4 million. Not only is PledgeMe seeing growth in campaign raises, we’re also reaching more investors. We’ve experienced increasing investment since we launched wholesale rounds around crowd rounds with Behemoth earlier in the year.

    On top of that, things have been Very Busy in the last few weeks, including our biggest month ever in November 2019 with $4.2million pledged, and a $4 million campaign that closed this Wednesday.

    Here’s our data broken out between Calendar Year (1 Jan — 31 Dec), Fiscal Year (1 Apr — 31 Mar), and Government Year (1 Jul — 30 Jun).

    The grey rows above are the years that are not yet complete. You can see that in the past five months we’ve had almost 50% growth on the FMA’s reporting period. This doesn’t even include our Australian platform, or our project-based campaigns here in New Zealand.

    We thought it would be a good idea to respond with a very clear statement that the market is definitely still growing! But, as the snapshot shows from the FMA, it is a lumpy market. Which is something we’ve talked about in our past capital raises.

    We’re pleased to see that the market is also developing from a regulatory perspective. The Takeovers Panel released changes recently that mean raising investment from more than 50 voting shareholders will be easier for small companies.

    We still think there are areas that New Zealand could develop though — including the potential to increase the maximum raise. Currently in New Zealand, companies are capped at $2million. With the increasing number of companies hitting those caps (including Waiapu in 10 minutes of opening publicly) and then exceeding them through wholesale rounds (including Puro who raised $4million as the largest publicly available equity campaign in New Zealand), we think those numbers need to be re-evaluated.

    We understand the government wants to protect public investors, but we believe that needs to be balanced with the potential opportunities that these investors are missing out on, and that our companies are missing out on too. In Australia, the maximum raise is $5million, which feels more aligned with the goal of supporting small and growing businesses. Our government is reviewing the cap at the moment, and we fully support the move.

    That’s a long way of us saying — the news of crowdfunding’s decline is misplaced! Get in touch if you’d like to know more, or check out our Education guide if you’d like to learn more about crowdfunding.

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