Cannabis Replaces Beer as the Top Choice for Crowdsourced Funding in 2023

Crowdsourced funding (CSF) in Australia remained stable in 2023, with $71 million raised across 82 offers, according to a report by Birchal, a leading CSF platform. However, the report also revealed some interesting shifts in the preferences and trends of the investors and the startups. The most notable change was the rise of cannabis-related ventures, which outperformed the traditional favorite of beer companies in the food and beverage sector.

According to the CSF Yearbook 2023, cannabis ventures raised $10.9 million out of a total of $21.6 million for the food and beverage sector, which accounted for 31 per cent of the CSF industry. This was a significant increase from the previous year, when cannabis ventures raised only $1.5 million out of $18.7 million for the sector.

The report attributed the surge in cannabis funding to the regulatory changes and the growing interest in plant-based medicine and the budding psychedelics industry. The report highlighted Cannaponics, a medicinal cannabis company, as the leader of this wave, with its $5 million raise in May, becoming only the second company to achieve this milestone.

The report also noted that cannabis ventures attracted more investors than beer companies, with an average of 1,024 investors per offer, compared to 824 for beer companies. The report suggested that cannabis ventures appealed to a wider and more diverse audience, especially among younger and female investors.

How did beer lose its edge in CSF?

Beer companies, which had dominated the food and beverage sector in CSF for the past few years, saw a decline in their performance and popularity in 2023. The report showed that beer companies raised only $1.7 million out of $21.6 million for the sector, down from $5 million out of $18.7 million in 2022.

The report attributed the drop in beer funding to the saturation and maturity of the market, as well as the changing consumer preferences and habits. The report stated that beer companies faced more competition and challenges from other alcoholic and non-alcoholic beverages, such as wine, spirits, cider, kombucha, and non-alc drinks.

The report also noted that beer companies attracted fewer investors than cannabis ventures, with an average of 824 investors per offer, compared to 1,024 for cannabis ventures. The report suggested that beer companies appealed to a more niche and loyal audience, mainly among older and male investors.

What are the other highlights and insights from the report?

The report also revealed some other highlights and insights from the CSF industry in 2023, such as:

• The CSF industry remained resilient and stable, despite the challenging funding environment and the unrest in the wider financial system. The industry raised $71 million across 82 offers, only slightly lower than the $72 million across 91 offers in 2022.
• The CSF industry saw more mature and profitable businesses raising capital, with 41 per cent of the offers coming from companies with over $1 million in reported revenue, and 26 per cent from companies with positive earnings.
• The CSF industry saw more female-founded and female-led businesses raising capital, with 29 per cent of the offers coming from companies with at least one female founder, and 24 per cent from companies with a female CEO or MD.
• The CSF industry saw more diversity and innovation in the sectors and categories of the businesses raising capital, with health care, technology, and education being the top three sectors after food and beverage.