Crowdfunders arrive from US
Indiegogo is counting on its Australian currency feature, to be launched on Tuesday, to give it the edge with local entrepreneurs. By allowing projects to raise funds in Australian dollars, Indiegogo cuts risk and cost from foreign exchange fluctuations and repatriation. Until now, money raised through offshore crowdfunding was in US dollars.
Co-founder Danae Ringelmann, in Australia this week to meet start-ups in Brisbane, Sydney and Melbourne, says her platform is attractive for Australian start-ups seeking to take their funding global.
"Australia has been such a strong market for us since day one," Ringelmann says. "We're trying to build a global ecosystem where people are bringing their ideas to life."
Indiegogo and Kickstarter are the top global crowdfunding platforms linking individual financial backers to start-up entrepreneurs, and taking a commission. crowdfunding is becoming a popular way for innovators to get their ideas off the ground.
Industry analyst Massolution predicts crowdfunding to raise $US5.1 billion ($5.3 billion) globally in 2013, nearly doubling 2012's $US2.7 billion.
However, watchdogs say crowdfunding does not create a supplier-consumer relationship. NSW Fair Trading cautions those using crowdfunding sites to seek independent legal advice.
Ringelmann says Indiegogo has hosted 150,000 projects and supports up to 8000 to raise "several millions of dollars" a week simultaneously. She cites the Indiegogo fund-raiser for a campaign to get federal Communications Minister Malcolm Turnbull to reverse Coalition policy on the NBN as an example of a successful project. The campaign ended on the weekend raising four times its $15,000 goal to buy ads in Mr Turnbull's local newspaper.
While US crowdfunders are coming Down Under, Australian platform Pozible is tackling them on their home soil, opening a San Francisco office in August. Pozible co-founder Rick Chen says the Americans' arrival is good for Australian start-ups because it raises the general awareness of crowd-funding.
It announced on Monday it will now accept donations in Bitcoins.
Chen says Pozible has helped fund 4500 projects since it launched in May 2010. He says it is less risky than US platforms being based here.
Serial entrepreneur Matt Barrie says the shine on Australia's technology industry extends beyond start-ups to later-stage ventures. Barrie just saw his first company, networking security maker Sensory Networks, sold to Intel for $21.5 million.
"What is quite interesting is once you're doing $10 million in revenue, there's a very active international private equity, late-stage venture capital community that is actively prospecting in Australia," Barrie says.
He points to Accel Partners, one of Facebook's first investors, as being active here since it invested $US60 million in Sydney software tools maker Atlassian. Other US venture capitalists such as Sequoia Capital (Apple, Google), Insight Venture Partners (Twitter), and Summit Partners (McAfee) were also busy in Australia this year.
Frequently Asked Questions about this Article…
The arrival of US crowdfunding platforms like Kickstarter and Indiegogo in Australia highlights the global confidence in Australian innovation. These platforms aim to increase the number of local start-ups taking their ideas to the world, providing them with more opportunities to secure funding and gain international exposure.
Indiegogo's Australian currency feature allows projects to raise funds in Australian dollars, reducing the risk and cost associated with foreign exchange fluctuations and repatriation. This makes it more attractive for local entrepreneurs who want to take their funding global without the added financial complexities.
Crowdfunding is becoming popular because it connects individual financial backers with start-up entrepreneurs, providing a platform for innovators to get their ideas off the ground. It offers an alternative to traditional funding methods and can help raise significant amounts of money quickly.
While crowdfunding platforms offer great opportunities, they do not create a supplier-consumer relationship. NSW Fair Trading advises users to seek independent legal advice to understand the potential risks and ensure they are making informed decisions.
A notable example is the Indiegogo campaign aimed at reversing Coalition policy on the NBN, which successfully raised four times its $15,000 goal. This campaign demonstrates the platform's ability to mobilize support and achieve funding targets effectively.
Pozible is expanding its reach by opening an office in San Francisco and accepting donations in Bitcoins. This move allows Pozible to tackle US platforms on their home soil and offer more flexible funding options to its users.
The presence of US venture capitalists in Australia, such as Accel Partners and Sequoia Capital, indicates a strong interest in the local technology industry. This provides Australian start-ups with access to international funding and expertise, helping them grow and succeed on a global scale.
Australia's technology industry appeals to international investors due to its innovative start-ups and later-stage ventures. With companies like Sensory Networks being acquired by major players like Intel, and significant investments from firms like Accel Partners, the industry is seen as a promising area for growth and investment.
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