Online investment marketplace Snowball Effect, has achieved the milestone of raising NZ$100m worth of capital for high-growth companies, since having launched in August 2014.
With capital raising fast becoming an attractive solution for businesses looking to expand and drive their growth strategy, Snowball Effect crossed the $100m mark with the help of their network of 30,000 investors, with the average investment per investor increasing from around $12k in FY16 to over $120k in FY21.
Snowball Effect’s co-founder and CEO, Simeon Burnett says, “Our mission at Snowball Effect has always been to support high-growth Kiwi companies achieve their business goals via capital raising, while also offering investors a simple way to discover and invest in exciting investment opportunities.
“Helping over 60 companies collectively raise over $100m is a testament to the hard work the team at Snowball Effect has put in – not to mention the trust companies have placed in us to help assist with their growth plans,” Burnett adds.
With the impact of COVID-19 still being felt across every industry, investor activity remains surprisingly strong with a significant rise in interest in capital markets activity. In the last year alone, Snowball Effect facilitated the highest number of capital raises ever through its platform, with 23 successful offers completed. Snowball Effect’s investor base grew by over 20 percent in 2020.
The explosion of interest has also meant companies are wanting to raise larger amounts of capital, reflecting a maturing of capital markets in New Zealand – following the footsteps of the US and UK where it is more common for private companies to source venture capital and private equity investment alongside retail investors.
Electric utility vehicle manufacturer UBCO recently raised over $13m, with over $3m coming from Snowball Effect investors and the balance coming from institutional international investors.
“We’re used to seeing businesses start the ball rolling with capital raises around the vicinity of $1m, but these days they’re becoming more ambitious. For example, plant-based food manufacturer Little Island raised more than $3m last year despite being in the thick of the pandemic, and architectural platform ArchiPro is currently raising $5m after successfully raising the same amount in 2019.”
“With all this activity and more exciting plans for Snowball Effect in the pipeline, we’re looking forward to helping more high-growth companies secure capital for the rest of 2021 and beyond,” concludes Burnett.
Snowball Effect has expanded its offering over the year, working with companies to raise capital via equity, debt and/or convertible note via its platform. Snowball is an accredited NZX Sponsor, meaning it can bring new issues of securities to any of the securities markets provided by NZX.