The lucrative world of capital-raising is no longer reserved for the mega-rich thanks to OnMarket, a fin-tech app that promises to democratise IPOs (initial public offerings, or floats).
IPOs returned an average of 25.4% last year — well above the 7.5% average across the ASX — but only around 16 per cent of those floats were made available to retail investors rather than cashed-up institutions that dominate the market, and IPOs that end up being offered to the public carry the stigma of being rejected by those big-ticket investors.
Attracting big placements will be OnMarket’s challenge, of course, but the app is aiming to shake things up by harnessing technology and people power — and these are five reasons you should check it out.
It’s easy to use
Called ‘Tinder for IPOs’ because it’s easy to swipe through offerings and buy shares directly from your phone, providing access that brokers would normally control exclusively. OnMarket empowers investors to invest as little as $2000 directly from their smartphone.
The app pings you a notification every time a new float is available, and contains all the data you need to do your research — including video interviews with the organisation’s management, company releases, third-party research, and press releases. And when you’re ready to invest, you can do so on the spot through your phone.
First-time investor, veteran broker, institution, mum-and-dad investor, whatever — OnMarket doesn’t play favourites. Every bid made on a float is treated equally, so if a stock is oversubscribed, every bidder is scaled back by the same proportion. Also, you can express interest in mooted IPOs — and if there’s enough of a clamour, OnMarket approaches the company to campaign for access to the float.
Access to lucrative floats won’t cost you a cent — plus, Velocity members earn one point for every $4 spent on the app, plus 3000 points for your first purchase, giving you a little extra on Virgin Australia. You can also earn a little bonus for referring friends — you receive 25% of the broker-stamping fee on every bid they make for two years.
It was launched by the Prime Minister
And Malcolm Turnbull boasts a net worth of $186 million, so we figure he knows what he’s doing. “The brilliance of this application is simply that it makes it easier to buy, it makes it easier to trade,” Turnbull said at the app’s launch. “So inevitably, this application and no doubt others that will seek to emulate or compete will open up the market, the investor market considerably.”