Within Australia’s equity capital market structure, startup founder Ben Williamson saw a gap — the relative lack of deal-flow to sophisticated investors for ASX-listed companies issuing share placements.
The solution he launched in September last year was Fresh Equities, a platform that offers a simple mechanism for investors to get exposure to placement deals outside of existing broker channels.
Having processed around $50m of bids from 350 placements in 2019, the business has now found some traction in the local marketplace.
And Williamson was rewarded for his entrepreneurial endeavours at the recent StartCon conference, with Fresh Equities taking out the gong for best fintech startup in 2019.
Williamson told Stockhead that transaction-focused business now has access to about 75 per cent of all placement deals, up from around 30 per cent in March.
“The big metrics we target are deal access and allocations. So from a business point of view if we get those right the rest will work its way through”, he said.
“We’ve processed about $56m of bids since launch in September 2018, but around $14m of that has been in November alone, so momentum is building nicely”.
Raising funds
Fresh Equities completed a $1m funding round in the middle of the year, which was taken up by both new and existing investors.
“The business was funding itself organically and we weren’t desperate for funding, so we wanted to take the time and make sure we got the right people on board”, Williamon said.
It ultimately sourced capital from a network of Australian high-net worth investors and venture funds.
“The rationale for raising was more to underwrite our growth. We had three staff in January, now we’ve got nine. So it gives us some flexibility to hire the best people when they become available”, he said.
The round was led by Grant Powell, a former managing director at consulting giant Accenture who was an early investor in the business. Powell has also joined the company as chairman to “help execute on the company’s next phase of strategic growth”, Williamson said.
Other backers included Sydney-based syndicate fund Eleanor Ventures and lawyer Andrew Whitten, a principal at advisory firm Automic Group.
“Andrew’s got more than 20 years’ experience in equity capital markets from a legal point of view, and he has some strong industry connections through Automic so his involvement is a really good vote of confidence for the business”, Williamson said.
Looking ahead
Discussing the outlook for 2020, Williamson said Fresh Equities’ main strategic focus was to provide a vehicle for more investors to gain exposure to share placements as an asset class.
“Our goal is to make placements more accessible. It’s not just about fostering more deal flow for existing participants, it’s about bringing new people in”, he said.
That includes angel investors who are looking for more exposure to listed investments, or sector-focused investors who want an efficient way to filter opportunities in, say, the mining industry.
Williamson said the company is also implementing a more global focus, initially targeting potential investors in Singapore, Hong Kong and the UK.
“We just went live with our upgraded KYC/AML capability, and overseas customers now have a gateway to sign up. We want to open up the market for overseas investors to access Australian deals”, he said.
The company is also rolling out a customised app in 2020 that will provide real-time deal alerts and a one-click acceptance process for allocations.
“Everything to-date has been through word of mouth, we haven’t done a big market campaign or anything like that. And we’re targeting for around 4x growth so I think it’s going to be a good year”, Williamson said.
Also published on Medium.