Taxi app Ingogo raises $9.1 million, with $1.2 million through crowd equity
Tuesday, September 30, 2014/
Australian transportation network and mobile payments startup Ingogo has raised $9.1 million, as it increases its focus on mobile payments, ahead of a planned ASX listing next year.
The investment round was led by UBS and Canaccord Genuity, and brings on board new investors including MYOB co-founders Craig Winkler and Chris Lee, Pitt Capital, Janchor Partners’ John Ho and a number of Australian and Asian Institutional Funds. It takes Ingogo’s total funding to $16.2 million and values the startup at over $45 million.
Interestingly, of the $9.1 million, $1.2 million was raised via equity-based crowdfunding platform VentureCrowd, the first deal facilitated though the platform.
Almost 50 sophisticated investors took part in the raise through VentureCrowd, each investing at least $1000, and at least one individual investing $50,000. Australian legislation does not yet allow retail investors to participate in such raises.
In August, Ingogo announced it was expanding beyond the taxi industry and had signed a partnership with Xero to roll out its mobile payments platform to small businesses. Ingogo founder and managing director Hamish Petrie says this pre-IPO funding round will help the startup get some “runs on the board” in the mobile payments space, before listing next year.
“We talked about listing late this year, but then we reached the partnership with Xero and it seemed premature until we get runs on the board behind that partnership. “ he says.
“The strategy is to go and build some momentum behind that opportunity and create more value in the businesses when it lists.”
Despite this increased focus on the mobile payments portion of its business, Petrie says it’s not pivoting away from the taxi and transportation industry.
“We’re still highly committed to winning the taxi space, and we’re putting a lot of resources into improving both the passenger and driver applications, and some of the smarts behind those applications,” he says.
“We’ve divided the businesses in two essentially. To ensure we’re still firmly focused on the taxi opportunity, we’ve literally created a second arm of our business to take the advantages we have in mobile payments and start to broaden that into other verticals.
“Xero was the way to take that next step. Our job is to make it easy and seamless for a merchant to accept as many forms as payment as they want.”
As for the transportation network side of Ingogo, some of the funds raised will go towards expanding the platform outside of Sydney and Melbourne, the two cities in which it currently operates. Petrie wouldn’t say for sure which city that might be, but says a state capital like Brisbane would be a logical step.
Meanwhile, VentureCrowd is hailing Ingogo’s raise as one of the first major examples of how equity crowdfunding can work to provide startups with capital. The platform, powered by Artesian Venture Partners, the firm behind the Sydney Angels Sidecar Fund, an early Ingogo investor, gave the startup access to a large amount of individuals who invested smaller amounts than might typically occur during a raise.
Chief operating officer of Artesian Venture Partners, Tim Heasley says the fact that applications were oversubscribed, demonstrates VentureCrowd is a “robust, viable investment platform for startups and investors”.