Snowball Effect has now been operating for four years. Our four year anniversary is a good opportunity to reflect on our progress so far. We've grown considerably since our updates in year one, year two and year three. Over the last four years, Snowball Effect has raised $42 million across 54 offers.
We'd like to thank the entrepreneurs who have trusted us to represent them and the investors who have engaged with the offers on the platform. It's been gratifying this year to see some of the largest investors in NZ's private capital markets (such as family offices and corporate investors) investing right alongside retail investors.
This past year we have added more advisory and support services such as information memorandum writing, investor relations, and the share registry management. Companies have been telling us how much easier the additional services that we now provide have made the capital raising process for them.
At four years old, our marketplace is still getting started. We're excited about our plans for the upcoming year including the launch of our upcoming secondary market and further increasing our ability to customise which offers are presented to investors based on their unique investment preferences.
This has been a record year for Snowball Effect. We have raised more capital than any previous year and continue to grow steadily. Some of the metrics below are disclosed to the FMA as part of our compulsory reporting as a regulated online investment platform. We believe that the private capital markets in NZ can benefit from being as transparent as possible. We’ve recently been collaborating with researchers from the University of Auckland and University of Minnesota to uncover insights into investor behaviour and the growth in online capital raising around the world. Below are some of the highlights from the past year:
We have now raised $41.8 million in capital across 54 offers. The private capital part of the business continues to grow with $12.7 million raised privately in 23 offers. The average size of offers that we work with has been increasing and 13 offers have been over $1 million in size. We have completed 22 offers that attracted more than 100 investors.
Growing investor base
Our investor audience now includes 17,700 people, of whom 7,300 have actively indicated interest in investing in a particular offer. We’ve found that each indication of interest averages out to about $1,000 in investment in the final offer per indication of interest. One of the most important metrics for a two-sided marketplace business is “transacted users”. In our case, 3,100 people have made a completed investment on the platform.
We are now working frequently with large family offices, institutional, and sophisticated investors. 810 people have invested more than $10,000 through the platform and 67 people have invested more than $100K through the platform. There are now 1,400 wholesale investors on Snowball Effect who are eligible to receive private offers. $27.7 million in transaction volume has come from people investing more than $10K.
A key difference between Snowball Effect and other players in the online investing space is that we want investors to take the private company asset class seriously as part of their overall investment portfolio. To that end, we’re pleased to see that 33% of our investors have now invested in more than one offer and 14% have invested in three or more offers. 30 people have invested in 10 or more offers (which research from the Kaufman Foundation shows is the base level of diversification needed to approach the underlying asset class returns for angel and venture capital investing). The most active investor on Snowball Effect has now invested in 27 offers.
Our ancillary services have continued to grow with 14 companies now tracking their legal share ownership records in the Snowball Effect share registry. These companies represent 2,059 shareholding records. We also now have 163 director profiles from investors that are available as independent directors for companies that raise capital through Snowball Effect.
A high-res version of our 4 year infographic is available to view here:
A pdf version of the infographic is available for download here: