A global student support platform started in Sydney has raised more than $675,000 through VentureCrowd in the first equity crowdfunding deal in Australia for 2016.
It comes at the start of a year which will see equity crowdfunding reforms scrutinised and a parliamentary inquest return its findings.
Zookal, founded in Sydney and now based in Singapore, has raised well over its $500,000 goal on the crowdfunding platform. The startup provides a platform offering a range of services and products for university students.
With three days still remaining, it has raised $675,000 from 15 wholesale investors, valuing the company at $US20 million.
VentureCrowd’s Luke Fay says this demonstrates a strong appetite within Australia for this form of fund raising.
“It shows the interest in these quality deals,” Fay tells StartupSmart.
“For the right transaction the appetite is high. People want to see companies with big growth potential and a good potential exit story. If you’ve got those the deals tend to grow.”
Reform on the agenda
In Australia equity crowdfunding is currently restricted to ‘sophisticated’ investors with net assets of $2.5 million or aggregated gross income for each of the last two years of at least $250,000.
The federal government revealed its legislation to loosen these restrictions at the end of last year, placing a cap of $5 million on companies using the avenue and a $10,000 cap on the amount a retail investor can pledge.
But the reforms were labelled as “absolute nonsense” and a “dead duck” because they restricted equity crowdfunding to public companies.
Despite having bipartisan support for most of 2015, Labor then withdrew its support for the bill and called for a parliamentary inquest, saying the startup community had been dealt a “great disservice” by it.
Fay says that although he hopes the government will further consult with those impacted by the reforms, successful campaigns won’t stop in the meantime.
“We’ll wait on the proposed government regulations to be passed – whilst that will hopefully open things up it doesn’t stop quality deals from happening,” he says.
“I hope that at some stage the legislators actually talk to the practitioners, the people actually doing the trades, and get their opinions.”