PledgeMe came within cooee of turning a profit in the 2017 financial year, boosting revenue from fees to use its equity crowdfunding and peer-to-peer lending platform while also clamping down on costs, and is considering adding another string to its bow which that could need another capital injection.
The Wellington-based company narrowed its annual loss to $11,228 in the 12 months ended March 31 from $398,611 a year earlier as revenue climbed 55 per cent to $268,473 and operating costs were slashed 48 per cent to $288,502. That also appeared in PledgeMe's cashflow statement, with the operating cash burn shrinking to $9,018 from $272,441, and after $1,000 of investing left the firm with $160,446 as at March 31.
PledgeMe is one of the country's original equity crowdfunding platforms, building on its project-based crowdfunding for what were largely social campaigns before legislation was passed enabling the technology to be used for investing. The firm added peer-to-peer lending to its suite of products last year, and across its three units has raised $15.3 million from more than 80,000 with almost 1,200 successful projects and 18 equity crowdfunding transactions.
"We're really comfortable with where we got to last year, both the increase in revenue was great for us but also figuring out our cost structure a bit better," Anna Guenther, PledgeMe's chief executive and biggest shareholder, told BusinessDesk.
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Peer-to-peer lending accounted for almost a fifth of PledgeMe's lending at $48,576 in the year, while the CrowdfundingU arm, which helps prepare firms for a capital raise, more than quadrupled sales to $29,850. Equity crowdfunding sales jumped 30 percent to $149,124 while project revenue dropped 22 percent to $40,923.
"There is constant interest in crowdfunding, and there's always interest in raising money," Guenther said. "The thing for us is just helping people figure out if crowdfunding makes the best sense for them, and educating them through that process."
PledgeMe's technology platform is at a point where there's more focus on maintenance than new development, however Guenther said there are "some potential plans for later in the year that might involve building a new product".
Guenther says the company doesn't plan to raise new capital at the moment, but that could change if some of their development plans go ahead.
The intangible assets of PledgeMe's website were valued at $18,262 as at March 31 after $91,104 of accumulated depreciation.