Birchal is getting into angel investing, backed by LaunchVic

Crowdfunding platform Birchal has launched an angel network platform, with backing from LaunchVic.

Birchal First is designed to connect angel investors with early-stage Victorian startups in the hardware technology space, investing from pre-seed to Series A.

The roll out has been underpinned by a $300,000 grant from LaunchVic and is the 10th angel network the state government-backed startup agency has funded.

LaunchVic CEO Dr Kate Cornick said she was pleased with the specific focus of Birchal First.

“Birchal’s crowdsourcing model will be particularly beneficial to hardware-focused startups who often struggle to access capital due to the high cost of manufacturing and development,” she said

“While VCs play a vital role, we believe diversity of funding options in the Victorian investment landscape can only be a good thing for the ecosystem and that crowdfunding offers a meaningful alternative to angel investment.”

Birchal cofounder and CEO Matt Vitale said traditional venture capital often favours specific sectors like B2B SaaS, leaving many viable businesses underfunded.

“Our goal is to create a thriving angel investment ecosystem in Victoria that drives innovation, job creation and economic growth,” he said.

“Birchal First aims to bridge the funding gap for underserved industries and segments. Combining the benefits of angel syndicates, and the scale of Australia’s CSF regime, to improve the flow of funding to Australian founders, and democratise access to exciting investment opportunities.”

Head of growth Grant Gwynne said Birchal First aims to activate at least 100 angel investors to support 18 Victorian businesses with a cumulative angel investment of $6 million, alongside an additional $12 million in community investment over two years.

“This funding will enable us to formalise Birchal Angels and provide much-needed support to hardware technology founders in Victoria,” he said.

Among more that 300,000 members of the Birchal crowd-sourced funding (CSF) platform, which has enabled more than $200 million equity investment since the CSF platform launched in 2017, there are 15,000 wholesale investors, able to invest above the $10,000 government-mandated cap for retail investors.

Birchal First will also offer educational and support initiatives for both angel investors and founders.

The announcement of LaunchVic’s $300,000 grant for Birchal comes just a fortnight after the fintech made several staff redundant in cutting costs by 30% after the first half of 2024 “significantly underperformed our expectations and budget for funding volume”.

The level of CSF investment in Australia rose marginally in FY24, up $500,000 to $64.5 million on the previous 12 months.

At the same time, the number of companies successfully chasing CSF cash increased by 16% to 99, up from 82 in FY23.