Birchal, an Australian equity crowdfunding platform, has changed its pricing structure and cut its workforce by 30%.

The company increased its fixed fee from A$4,200 (US$2,814) to A$7,000 (US$4,690) and introduced a tiered success fee: 8% for campaigns under A$500,000 (US$335,000), 6% for A$500,000 (US$335,000) to A$1 million (US$670,000), and 5% for raises above A$1 million (US$670,000).

This move aims to lower costs for larger fundraisers while increasing fees for smaller campaigns.

Birchal also reduced its team size, including leadership roles, marking its second round of staff cuts in just over a year.

The company cited underperforming funding volumes earlier in 2024 as a reason for previous expense reductions.

🔗 Source: SmartCompany

🧠 Food for thought

1️⃣ Platform economics favor larger fundraising campaigns despite crowdfunding’s democratic promise

Birchal’s fee restructure reveals the underlying economics of crowdfunding platforms, where larger deals generate more sustainable revenue per unit of effort.

The new pricing structure charges 5% for campaigns above $1 million compared to 8% for those under $500,000, essentially offering a 37.5% discount to bigger fundraisers1.

This mirrors successful campaigns on the platform like Bridge Road Brewers, which raised $1.5 million from 872 investors and surpassed their $750,000 target within 24 hours2.

Similarly, Montu’s $3.5 million raise completed in just over 24 hours, demonstrating how larger, established companies can generate significant investor interest quickly3.

The fee structure reflects the reality that processing a $2 million campaign requires similar platform infrastructure as a $200,000 one, but generates dramatically more revenue for the platform operator.

2️⃣ Australian equity crowdfunding market shows signs of consolidation pressure

Birchal’s positioning as Australia’s last “pure-play” crowdfunding platform signals a maturing market where only the strongest operators survive.

The company has implemented its second round of 30% staff cuts in just over a year, following earlier reductions due to funding volumes that “significantly underperformed” expectations in 20241.