Direct-to-investor marketing platform, InvestorHub has secured $4 million in an extension funding round led by EVP, with follow-on investment from Archangel Ventures and Flying Fox Ventures, that will see its Series A round close with funding of up to $9 million.
This marks the second capital raise completed in less than two years since the company’s pivot from its former moniker, Fresh Equities. InvestorHub previously secured $4 million in May 2023, but reopened its doors to investors when it tripled revenue in the 13 months that followed, which garnered significant additional investor interest in the platform.
The oversubscribed round includes the approval for an additional $1 million post-raise to allow for additional strategic investors, earmarking a total capital injection of $5 million, on top of the original $4 million. The capital will be used to expand the company’s market share in Australia and internationally. Currently, 4% of ASX companies (such as Retail Food Group) use the InvestorHub platform, and the company sees the UK, which represents about 10% of its client base, as a key growth market.
InvestorHub is engaged in active conversations with several top 20 ASX and LSE companies and seeks to leverage the capital to meet aggressive growth targets, including doubling its YoY revenue.
The funds will also allow the company to invest in new features, including expanding its artificial intelligence and machine learning capabilities to increase product efficiency, support prediction modelling, and deliver quicker insights for companies and answers for investors.
Sibos2024_Beijing_banner_468x60px
InvestorHub co-founder and co-CEO Ben Williamson sees this capital raise as an opportunity for public companies to engage 99% of investors who are unintentionally ignored:
“Historically, markets have always leaned in favour of intermediaries, resulting in a disconnect between companies and investors, unfair (and even weakened equity) markets and a general disregard for retail investors. However, technology is granting access to new types of investors who are having a measurable impact on liquidity, share price movement, and capital raise outcomes.
“Despite this, larger individual shareholders outside of a company’s Top 20 (or 1%) are still overlooked and treated as ‘mum and dads’. In reality, this mid-register portion represents around 24% of the shareholder registry and is generally responsible for 50% of all trades1,” he said.
“Further, smaller retail investors, or those we call ‘long tail’ investors, account for roughly 75% of all shareholders, and while they arguably may be the least valuable shareholders, this group is driving a quarter of daily trading volume, and when engaged effectively, can increase their shareholding value by 139%.
“Put simply, retail investors drive the majority of trades that influence share price. To overlook them is to ignore your share price,” he said.
Williamson said technology would be the catalyst for solving the obstacles and misconceptions that existed around shareholder engagement:
“The issue that time-poor executives faced until recently, was the lack of a viable or scalable method of understanding and communicating meaningfully with retail investors. It’s one reason that an increasing number of listed leaders say being a listed company is becoming a hindrance.”
“Our vision is to give companies the tools to own their investor relationships, allowing them to optimise investor relationships, and both on-market and off-market performance. We aim to make being a listed company an advantage, not a perceived disadvantage,” he said.
Justin Lipman, Partner at EVP said of the investment: “Doubling down on our commitment with InvestorHub shows our strong belief in the company’s product capability and speaks to the calibre of the team and value they provide to their customer base. Having grown three-fold since our investment, we believe InvestorHub is emerging as one of Australia’s most prospective software platforms and feel fortunate to be partners on their journey.”
Williamson said despite the market’s proclivity to intermediaries, most were not bad actors and InvestorHub was actively seeking to work alongside them to support the best interests of ASX executives and boards:
“This raise will also bolster our ability to support our growing community of intermediaries and listed leaders, especially those outside the indices (of which 85% of the ASX is comprised), to empower them to make better data-backed decisions that are truly in the interests of their company and their shareholders,” he said.
InvestorHub plans to continue disrupting the capital market space over the next 6-12 months by expanding its market share in Australia and the UK, as well as preparing for entry into broader international markets, of which there has been significant interest from companies listed on Canadian and North American exchanges.
The company seeks to combine multiple industries in capital markets, including brokerage and investor relations, to provide companies with a simpler way to maximise on-market and off-market outcomes.