Mike Smith and the team at Zero Co expected Tuesday’s equity crowdfunding round to succeed. What they didn’t anticipate was $5 million in new investment in less than seven hours, breaking records to become one of the most spectacular crowdfunding rounds in Australian history.
“It was ridiculous to be completely honest with you,” Smith told Business Insider Australia. “It was a wild, crazy, rollercoaster of a day… It felt almost like a cheesy Hollywood start-up movie.”
‘Just crazy’: Zero Co breaks Birchal crowdfunding records
Australian start-up Zero Co launched in 2020, pledging to cut down on single-use plastics with refillable personal care and home cleaning products under a direct-to-consumer model.
Boosted by a compelling product, savvy marketing, and an initial $250,000 Kickstarter campaign, Zero Co says it now services 43,000 Australian households, accruing $8.2 million in total sales.
Seeking the funds to expand its operations at home and abroad, Zero Co took to equity crowdfunding platform Birchal to seek a maximum of $5 million in fresh investment.
Pre-registration opened 11am Tuesday, with the offer set to open to the general public on Thursday.
Smith would not need to wait that long. When the dust settled, 3,082 investors had contributed the full $5 million in six hours and 27 minutes.
Zero Co’s funding round became not only the largest in Australian history, but the fastest to meet the $1 million and $3 million marks.
“Honestly, people were dancing and hooting and screaming in the office all day,” Smith said.
“We were quietly confident that we were going to be able to reach the $5 million maximum funding limit. But we had no idea that it was going to happen as quickly as it did.
“You know, most of us thought it was probably going to be about a week long campaign and to have it done in under seven hours was just crazy.”
Although the target has been reached, the round will officially close on Thursday, 4 November. Smith said over half a million dollars is effectively sitting in a “waiting list”, should existing investors pull out in the coming days.
The round also serves as a major victory for platforms like Birchal. The ability to meet investor demand for start-up equity powered the sector to its biggest-ever quarter through September, the company said. The Zero Co round suggests the field has more room to grow.
‘Big demand out there for products like ours’
The crowdfunding success was backed by a further $6 million in investment from venture capital fund Square Peg, and a $2 million boost from existing investors — a roster including names like Koala founders Dany Milham and Mitch Taylor, and Atlassian co-founder Scott Farquhar.
Smith said the Square Peg investment came under the same terms and price as the crowdfunding offer.
That funding will go towards the expansion of Zero Co’s range to 30 personal care and household products, each of which will fit into the company’s circular economy philosophy.
Strong interest in the company has reflected an unmet demand for reusable products across a range of categories, Smith said.
“There is this big demand out there for products like ours, and in in all kinds of different product categories that are more sustainable and have less of an impact on the planet,” he said.
The funding will allow Zero Co to set its sights on the European and North American markets, he added.
“We want to go after the big fish,” Smith said. “And, you know, markets that we can have a really oversized impact on the single use plastic problem.
“Going into a market with 300 million customers that are all using single use plastic every day is really exciting for us, and the impact that we can therefore have on the problem [of single-use plastic].”
And if the launch was a Hollywood movie, Smith already has eyes on the sequel: building out the circular economy worldwide, and providing a template for other major producers to emulate.
“Big ships take a long time to turn,” he said.
“But they are they are starting to, and I’m heartened by some of the experiences I’m having with the companies about their ability and their willingness to want to kind of do the right thing.”