UPDATED: Invivo Wines smash $500k target - Equity crowdfunding + brokers = unexpected

UPDATED: Invivo Wines smash $500k target - Equity crowdfunding + brokers = unexpected
Invivo will use broking firms for its $2m equity crowdfunding push

UPDATE 2:

The $1.5 million mark has been breached! With 21 days to go, it looks almost certain the crowd funding listing will hit its $2 million cap. 

Original story continues below

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UPDATE:

Invivo is already well on its way to meeting its target, having raised over $1.1 million after launching just yesterday with 25 days left to go.

Invivo co-founder Tim Lightbourne said earlier if the company hit over $1.5 million, the amount raised will be record-breaking, making it the largest amount raised so far through equity crowd funding.

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Kiwi winemaker Invivo has teamed up with crowdfunding platform Snowball Effect in the hope of raising up to $2 million – the maximum via equity crowdfunding in New Zealand.

Invivo Wines will launch on Snowball on March 18 and has a month to reach its target.

If it does, this will be the largest amount raised so far through equity crowd funding.

The other unusual element of the funding push is that Invivo will work with brokers to target specific investors, as one of the investment lures for a possible NXT listing within the next 12 months.

Invivo co-founder Tim Lightbourne says Invivo liked the idea of crowd funding not only for the financial benefits, but because the new investors would also potentially be ambassadors for the brand.

“Getting that attention is really appealing to us as a brand.”

He says though the company will offer 20% of its business and hopes to raise up to $2 million, its first cap is $500,000. Lightbourne says if the company doesn’t hit the crowdfunding target, it will try by other means in the next 12 months, but says it will be a record if they hit over $1.5 million.

Lightbourne wouldn’t confirm which broking firms he was working with, but said they were leading New Zealand-based companies.

“I think the unique approach we are taking with the brokers could be interesting along with attracting public.

“We’ll be open to public but we are [also] pitching some of the leading firms for the potential of that listing; it’s a two-pronged approach.

“We are the first New Zealand wine brand to go under crowdfunding, there are 700-plus wine industries in the country, so it could also be a step for them.”

He says the funds raised will go towards four key strategies the company is working on.

Invivo is already in 17 markets around the world but is about to launch into the US, and if it wants to make inroads into that market it will need to take on more staff, Lightbourne says.

“We’ve been a pretty lean team”.

The company also needs the money to purchase grapes, and for the diversification of its business. Invivo introduced spritzers (white wine plus soda) last year, and the company has just signed off with an Australian distributor.

Lightbourne says the company wants to list on the NXT float within the next year, but hasn’t confirmed how much more the company wants to raise once listed.

The minimum capital raising on NXT, which will replace the NZAX junior market, is $5 million.

 “The first goal is to get the funding target now onboard and we’ll look at [an NXT target] in the next year.

“It’s early days, it’s all about presentation. It’s not open yet to the public but there’s been good feedback so far.”

Invivo has seen good growth over the last few years – 207% since 2011, Lightbourne says.

“We are profitable, and 75% of our sales go into export markets. It’s a good story.”

He says the company is confident the brand is well suited to the crowd.

“We have done a lot of work with Snowball Effect preparing for it. The [Snowball] team are thorough and professional, they have done their homework and we’ve seen the four [companies] that they have done all hit their targets.”

Snowball head of platform and investor growth Josh Daniell says this is the first offer where Snowball has seen a company work with brokers to help sell shares.

He says an NXT listing following soon after the crowdfunding would give new investors a quicker exit point.

“For a number of companies going through equity crowdfunding it would be a long time before investors see their returns. Invivo wants to list on NXT within 12 months time, [it’s] interesting for investors as they will get a chance to liquidate their investment.”

Daniell says equity crowdfunding also gives companies good exposure for their brand – and the potential for a jump in sales.

“A lot of these companies want a lot of shareholder ambassadors for their product,” he says.

In addition to bringing in brokers, the company is also innovative in its use of advertising for the campaign, using billboards to attract investors, which is the first time the medium has been used in this way.

Lightbourne says Invivo launched in 2008, in the middle of the recession, so learned to be careful with its money.

“We secured 17 export markets, had great traction and got some good customers around the world.

“We have Graham Norton [who has a 1% holding and drinks the wine on his show] and we made his wine last year.

“We are a brand that is targeting a millennial consumer, who we believe is the future of the wine industry, particularly in the US. And we see the US market is growing really well for New Zealand wine and we aren’t stuffy, we’re not about chateaux.”

Kiwi fashion label Zambesi designed the Invivo label and has a 2.97% stake, while Invivo co-founders Lightbourne and Rob Cameron own 35.59%.

The company had a $5 million turnover this year and is aiming to double that within a couple of years.

It recently undertook a share split with no funds movement to prepare the shareholding for the crowdfund, increasing its total number of shares from 101,010 to eight million on March 2, according to NBR.