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SA equity crowdfunding platform Uprise.Africa is conducting due diligence work on 80 potential campaigns, the platform’s marketing officer Inge Prins revealed today.
It follows an announcement by the platform earlier today that with still 3o days left of its campaign, local brewers the Drifter Brewing Company has met its goal of raising R3-million from South African private investors. The R3-million has been raised from 129 local investors.
Prins told Ventureburn today that the platform has received a “big stack” of applications and that about 80 applications were in the due diligence stage currently.
Most of these are from organisations and entrepreneurs in Johannesburg, Cape Town and other large cities and include campaigns for consumer products, services, tech and property.
Uprise.Africa is conducting due diligence work on 80 potential equity crowdfunding campaigns
She said the finalisation of each of these is dependent on how quickly each respective entrepreneur can meet the necessary legal requirements to run a public raise.
‘Find crowd of over 100’
Turning to the Drifter campaign, Prins said the 129 investors include those in the beer sector and hospitality.
She hinted that the success of the Drifter campaign is not surprising, given that globally beer campaigns do quite well, making up seven percent of all equity crowdfunding campaigns. The kind of campaigns that seem to do well often involve consumer-facing products, she added.
“The crux of why it works is you need to find a crowd of 100 to 300 people to invest in your business because they believe in your business,” she added.
Drifter, the brainchild of Nicholas Bush (pictured above) who launched the company in early 2015, plans to use the funds to purchase an automated bottling line that will allow the company to rapidly increase production capacity and fill their demand for exports into the US, Europe and Asia. The company also plans to launch a number of Drifter bars nationwide.
The campaign was due to run for a further 30 days still and Drifter has therefore decided to keep the campaign running and to make more equity available, capping the total amount the company seeks to raise at R3.25-million (this has since been extended to R4.02-million following increased demand for their product abroad — see Editor’s note below).
Storied campaign flops
In contrast, the platform’s first campaign — Storied, which ended on 15 April and was run by publishing house Jacana — was a flop.
“Clearly the crowd did not believe in the campaign,” commented Prins, adding that the campaign raised just R83 400 from 11 investors — far short of the goal to raise R3-million over 90 days. The campaign aimed to help increase the publication of more African literature.
Prins said in a bid to ensure that Uprise.Africa offers only the best campaigns possible to investors, the organisation will now levy a deposit fee of R23 000 on those organisations wishing to run campaigns on the platform. This will cover legal duties, financial and administrative and the registration of a prospectus with the Companies and Intellectual Property Commission (CIPC).
While Uprise.Africa in October last year unveiled four deals that it aimed to list on the platform, Storied is the only one of these that has so far been run.
She said the remaining three — a freelancing app by Jobvine, a campaign by The Green Cab company and a third by Beerhouse to fund a new outlet — have not materialised as the entrepreneurs from the respective companies have yet to meet the legal, financial and administrative requirements to do so.
The platform, she stressed, continues to engage with the Financial Services Board (FSB) and to keep the authority informed of all the deals it lists, but that no progress has been made towards developing crowdfunding regulations for South Africa.
Prins would not say when the next campaign would be launched.
*Editor’s note (14 May 2018): Drifter notified Ventureburn in a press release that it has since extended its offering to R4.02-million, after seeing an increased demand for their product abroad. This follows a trip in April to a food and beverage trade show in South Korea.
Editor’s note (21 August 2018): In a press release Uprise.Africa revealed on 21 August that it had closed the Drifter campaign, having raised a total of R3 889 000. On 20 August Uprise.Africa issued 196 Drifter investors with their share certificates.
Featured image: Drifter Brewing Company founder Nicholas Bush (Supplied)