There has been a “large upswing” in the number and quality of start-up firms using the Australian Small Scale Offerings Board to raise finance, according to the capital raising platform.
ASSOB has reported an annual operating profit of $186,000 for the full year to June 30, a radical turnaround on the $4.8 million loss sustained last year.
The recovery has been led by an increase in start-ups turning to ASSOB to raise money, with the organisation saying that there’s been a particular increase in food processing and technology companies.
ASSOB works by showcasing equity investment opportunities in high-growth, unlisted Australian companies. Via a network of sponsors and subscribers, ASSOB has raised nearly $120 million in equity capital.
ASSOB’s CEO Paul Niederer, CEO of ASSOB, says: “It’s refreshing that a number of new business listings on the ASSOB platform have already raised around $600,000 to $1 million before going live.”
“This means they are in ASSOB’s ‘Early bird/VIP’ stage meaning only friends, family and fans have invested to date.”
“We see this and other indicators that the SME market is really starting to get back to business and are looking at ways to fund future growth.”
“With the result of banks reducing their exposure to small and medium businesses ASSOB has become a more viable alternative for raising growth capital.”
Niederer says that there is a “near 50-50 split” in listed business between those that have just started up and those that have developed further with patents or technology. The quality of the businesses seeking finance has increased too, he claims.
“We’ve noticed that there is a big uplift compared to two or three years ago in terms of the quality of the businesses,” he says. “If you try something that doesn’t have substance, you won’t get investors in this market. Start-ups have found it hard to get money from professional investors, so they’ve kept in ‘early bird’ mode a bit longer, only using family, friends and fans.”