Jonny Wilkinson is co-founder of Equitise. Equitise is a crowdfunding platform which simplifies the investment marketplace. It removes traditional barriers to investing in sourcing capital by making the process quick, easy and safe. Enabling your average Aussie to invest in early stage startups like Xinja. Jonny shares his personal journey of launching the business and gives his views on the investment market.
Can you tell us about Equitise?
We are an investment platform for unlisted companies to raise funds via crowdfunding. Essentially we make it possible for everyday investors to put a relatively small amount of money into supporting startup businesses. The idea for Equitise began in 2014 in a pub at a mates birthday. My co-founder Chris (Gilbert) were both chatting about wanting to get out of our corporate gig. We both had some knowledge of the potential changes taking place in crowd funding both regionally and globally and figured we’d go for it. The next morning we weren’t sure what was going to happen. Nursing a sore head, scrolling through my newsfeed I was drawn to something which was to become the precursor to the H2 accelerator.
Equitise helped Xinja equity fund raise. What was the experience like?
Xinja was the very first retail, equity crowdfunding deal done after the laws changed and the exact same day our licence was granted. The 11th January 2018 was the day we launched with Xinja. It went gangbusters, beyond our wildest expectations. I didn’t leave my desk other than go to the bathroom a couple times on that day. We ended up raising about $2.5 – $3 million for them.
Could you tell us a little bit more about some of the other businesses you work with?
We’ve been extremely lucky to work with some great businesses including Car Next Door, GoCatch and Endeavour Brewing, a boutique beer label. We’ve helped lots of companies raise money, not just once, but a second or third time. To date we’ve carried out 74 raises for 65 companies over the past few years. In total that equates to approximately $45 million.
What kind of response have you had from investors?
It’s been nothing short of amazing. When we set out on this mission we needed companies and investors to enable us to fulfill our wish to make investing more open and transparent to every investor. Buying into a VC fund costs on average $250,000, which puts it beyond reach for the average investor. With Equitise, investors require, on average just $250, which provides opportunity for most people to build a portfolio. They can back some amazing, exciting businesses with the potential to grow tremendously and potentially provide great returns.
The ability to invest is also great for the economy. Crowdfunding allows companies who are innovative and small the ability to grow and create future employment. Equity crowdfunding helps underpin the early stage capital markets. We’re very passionate about being able to offer investing opportunities to everyone.
Have you got any theories as to why we’re seeing this huge rise in stock markets?
A number of factors are in play. Stock markets are trying to predict the future, and COVID-19 has thrown things into disarray lately. Previous downturns like the GFC were a top down structural issue, which slowly unwound and devalued a whole lot of assets.
What we are seeing now is a supply/demand, bottom up driven outcome. The opportunity for the economy and indeed the world to switch back on and return to normal is much greater.
There is more money in the world today than ever before. In recent years people are most likely reassessing their situation.
We’re very lucky to have extremely mature superannuation industry in Australia, with a figure in the region of $2.6 trillion AUD. This is a huge amount of money to underpin the economy with. Nine and a half percent of the gross national income in Australia is deposited into superannuation funds each month.
If there aren’t any new issuances on the ASX, most of the focus and allocation of a lot of these assets is towards Australian stocks. The asset prices will just get pushed up. Which means the ASX keeps on growing even if there isn’t commensurate, actual growth in the underlying companies on the ASX.
Do you think that the ease of investing and access to all of these opportunities is creating a paradigm shift?
Without a doubt it’s quicker and easier for people to take these opportunities now. Opening an account can all be achieved in a few minutes. The speed in which it can be achieved allows people to seize on opportunities. If you’re sitting on cash or you’re looking to rotate your asset allocation it’s a tremendous time to be alive.
I recall a time back at Citibank, when we were trying to set up some Australian institutional clients it was an arduous process. The steps and the forms needed to set up trading in the US was quite involved. Whereas these days individuals can do it in a matter of minutes and lots of the processes are automated.
Can you tell us more about the Equitise journey?
In 2014, H2 accelerator accepted Equitise into their accelator programme. Legislation was expected to change in a relatively short period of time, 6 to 12 months at most. Then we had a change of government and the time frame changed overnight, we had no end date in sight.
Having quit our jobs, borrowed money and building the investment platform, we didn’t know what to do.
We had always planned that Equitise would be an Asia Pacific company eventually, starting in Australia, New Zealand then Asia. The order changed. We jumped on a plane to New Zealand and started cold calling people, sending emails and LinkedIn connections.
Chris and I quickly followed up with meetings. Venture capitalists, angel investors, lawyers, accountants, basically anyone who we thought might be interested in investing. When we met with the regulator they were very encouraging. And after a brief board meeting (Chris and I were the only two board members at that time) we decided to launch in New Zealand first.
I got on a plane the next day and moved to New Zealand for 18 months. We got the business quickly set up and licenced.
In Australia the process to get the legislation changed to allow for equity crowdfunding, was pretty arduous. We had to lobby the government and the opposition and took trips to Canberra a few times. It took a lot of time and pushing from different angles.
FinTech Australia has been an amazing platform for us to help get access and lobby the government. I was lucky enough to be put on a FinTech advisory panel to the government, which opened up another avenue for us. We had to work with ASIC making sure we put regulations in place to get licensed in Australia before we finally got the go ahead. I’m never going to try and start another business where I need to get laws changed!
How many people do you have in the business?
We now have ten people in the business split fairly equally across technology, marketing, deals and management working collaboratively within the business. Our marketing team also works with each of the companies we are raising money for, as well as doing the broader Equitise marketing.
How does it feel making such a significant impact on the startup community?
It’s amazing and we’re very proud of what we have achieved. It gets us out of bed every day. We get to speak to amazing people doing tremendous things. When we see the companies we help continue to grow, it’s very rewarding.
Private companies are the lifeblood of the economy, they drive growth and employment.
The second company we ever raised money for in New Zealand works in a pretty niche space providing financial products to retirees. They don’t think they would have been able to go on had we not helped them with their first raise. They now have more than $250 million funds under management and we’ve raised for them four or five times.
Have you got any exciting deals in the pipeline you can mention at the stage?
We’ve got lots of exciting things coming up, which we’ve been holding off on due to COVID-19. This has allowed us to build an exciting new platform where we’ve built the technology from scratch. We have launched Bricklet, which is a fractionalized property play. We’ve got a bakery business producing authentic, certified organic, whole food.
Humaniti is a personal finance offering where you can actually earn money. There’s a lot of exciting things coming through in the short term and we’re busy stacking the pipe with some exciting stuff coming for the second half of the year.