ASB MAGAZINE:In July 2018, DHD and Modom launched a crowd funding campaign with innovative online equity firm Equitise. This week it was announced the offer has had to be withdrawn due to advanced discussions with a strategic investor that came about through the equity crowdfund.DHD sought to raise between $500,000 and $2.5m from new investors who stood to own between 2% and 11% of the company. The implied valuation of DHD Surf at the offer price of $25 per share was $20m (before the additional money is raised).
Equity crowdfunding became accessible to all Australian’s over the age of 18 in January 2018 with investment in the company starting as low as $250. The aim of the crowdfunding platform was to raise capital to increase inventory, invest in product innovation and marketing. In addition to these plans, DHD also sees major growth opportunities in the EPS and soft surfboard market as well as accessories and fashion.
According to DHD’s Tony Emerton;“The majority of interest has come from sophisticated investors preferring to invest directly rather than via a crowd funding platform. Given they represent the larger amount of the targeted raise we agreed to cease the crowd funding project and negotiate directly,” Emerton told ASBMAG.
DHD is not a public company and are therefore not obliged to disclose any further details about the decision. In our Professional Edition article HERE we cautioned against the risks involved with this form of investment saying,
“Investing in DHD Surf allows you to benefit from the potential growth in the company however you need to take a long-term view given that there is no market to sell your shares if you change your mind.”
It’s unknown how much was raised under the offer and who the larger strategic investors DHD are now in discussions with. Speculating more widely on the investment market, sources say markets have been disastrous over the last 4 months, so it not surprising DHD and Equitise simply couldn’t get the deal done in the current market.
“We will be contacting investors directly once we are clear on the options available to them. Understandably the holiday period has delayed access to information,” said DHD’s Tony Emerton.
“While the Crowd Funding process is in its early days in Australia we believe that it will develop into a valuable pathway for business and entrepreneurs to access capital and grow their businesses,” added Emerton
“We’d like to wish DHD the best of luck with this new opportunity,” concluded ChrisGilbert of Equitise
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