Digital bank startup Xinja just raised $2 million in equity crowdfunding

James D. Morgan/Getty Images
  • Crowdfunding investment through Equitise is more than $2 million from 1,000 investors.
  • When launched, Xinja hit the minimum funding target of $500,000 in under a day.
  • Investments of $250 made up a quarter(26.53%) of all investors

Digital bank startup Xinja has raised, via platform Equitise, more than $2 million from Australia’s first equity crowdfunding offer and the largest so far.

The capital raise was the first full retail equity crowdfunding campaign to go live in Australia and is still open to investors until March 31.

The current investment through Equitise is now at more than $2 million from 1000 investors. The average investment was $1,850 higher than anticipated, given the minimum of $250.

Half (52%) of investors were under 40 and only 19% were female.

One-in-four investors committed the minimum $250 for Xinja’s crowdfunding raise. Almost 7-in-10 put in less than $1000.

There was interest from sophisticated investors with investments of $10,000 making up almost one third (27.77%) of the total raised.

Equitise co-founder Jonny Wilkinson. Image: Supplied.

Equitise co-founder Jonny Wilkinson says the success of the campaign shows there’s demand among investors to back more venture capital-style opportunities.

He says the success of the raise underlines the willingness of everyday Australians to gain a foothold in cutting-edge companies, an opportunity previously open only to wealthy investors.

“People are definitely passionate about the banking space,” he told Business Insider.

“There’s sentiment among a lot of people that greater competition would be good, that a more digital-style solution would be along the lines of what costumers are now pushing towards.

“It’s been great that we’ve had an exciting field to launch with.”

Seven companies have been issued Australian Financial Services authorisations to provide crowd-sourced funding. Equity crowdfunding enables Australian retail investors to invest as little as $50 or as much as $10,000 in a business.

The first to close an Australian equity crowdfunding campaign was Revvies Energy Strips Limited, raising nearly $300,000 from 239 investors via equity crowdfunding platform OnMarket.

More equity crowdfunding campaigns are coming.

Equitise has already announced a crowdfunding raising with Hashching, an online marketplace for home loans, and several others including The West Winds Gin from Margaret River in Western Australia.

“Equitise is disrupting the way people invest by giving them more ways to back exciting businesses and help grow the companies they love,” says Wilkinson.

The Xinja offer is part of the company’s second round raise of $10 million. Of this, $5 million was raised in November from private investors, several of whom were reinvesting after round one which raised just under $3 million in May 2017.

A piece of the action

Eric Wilson, Xinja’s chief executive, says he’s thrilled to have raised a significant amount of money from retail investors through Australia’s first equity crowdfunding campiagn.

“From the word go, we have always said we wanted to offer our customers a chance to own a piece of the action, and this is what we were able to do,” he says.

“The launch of equity crowdfunding in Australia created an opportunity for founding Xinjas to benefit from any success we have in the future, which is all part of our building a bank with our customers.”

Xinja has already launched a prepaid card and app and is on track to deliver home loans within the next couple of months.

The company hopes to get approval for a banking licence in a similar time frame which would allow it to launch transaction accounts.

“We are aiming to change the banking landscape,” says Wilson.

“It is happening in other parts of the world, and it’s time Australians had access to this kind of technology and approach; helping customers make the most out of their money, with less angst. It’s great seeing investors come on board; this is a sign of the appetite for change,” he said.

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