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  • Writer's pictureCassandra Diamantis

The Rai$e Rundown: The third largest equity crowdfunding campaign in Australia

Established in 1997, Hellyers Road is Australia’s oldest operating whisky distillery and was the largest until the late 2010s. The company began as a milk cooperative before transitioning to whisky and offers products across two key segments: cask-aged whisky and whisky cream.

Q&A with Derek Charge and Lara Wheby

Now, Hellyers Road Distillery has just closed the third largest crowd-sourced funding campaign in Australian history, raising $4.3 million. It is the largest beverage/alcohol raise in Australian CSF history, and the largest raise in 2024 thus far. Through this raise, they have now welcomed over 1300 new shareholders and brand ambassadors from across the country.


Mark Hubbard Name Tag

Derek, tell us how you concluded that an equity crowdfunding campaign was right for Hellyer's Road.


Derek Charge Name Tag

We looked at several different options for equity raising and for us it came down to three broad groups of ways that we could raise funds. One was with a strategic investor, someone that has come from the relevant industry. So, in our case, the liquor industry, and frankly, that's the sort of company that's likely to look at us as an acquisition target in the future. We took the view that there was a lot of value to be created in this business before we started talking with those types of potential investors.


The second group was a private equity in a family office, not really venture capital in our case, because we're such an established business, but essentially that that type of group of say a family office and we looked at what would they bring to the company aside from the funds.


So, the funds obviously are important. They allow us to do what we want to do into the future. But the other element is what else can they bring, apart from governance, probably not a great deal. And, and we had already had a sophisticated investor, a small friends and family, sophisticated and risk investor raise about 12 months previously.


And then the third option with the crowdsource fund, the real attraction to us was not the opportunity for equity, but the two-fold attraction was to increase the number of shareholders on our register. To improve liquidity amongst shareholders for sales of shares between them.


And I can come back to that in a little bit and more particularly that opportunity to have ambassadors for our brand. So not only do these ambassadors that these investors bring their personal investment into the company, but they bring that investment in an emotive sense as well. And we're already seeing that, even as we've just closed the raise, the excitement that that has generated amongst these new investors.


I'll talk a little bit about liquidity. We’ve been around for a very long time and so we already had 125 shareholders. Most of those shareholders had inherited their shares over decades, so there was a desire on our part to find the opportunity for people to be able to more freely trade shares between themselves.

And again, adding another 1302 shareholders to our register should make that much easier.


Mark Hubbard Name Tag

Yes. I'm one of those shareholders, so I'm quite excited about it. So, 1300 new shareholders, how will you get your shareholders involved? How will you activate these new shareholders and leverage them?


Derek Charge Name Tag

One of the elements of our raise was a quite generous, our investor rewards program. The reason behind our rewards program was that we wanted our shareholders to have our product in their hands. So about half of the shareholders in EOI had indicated that they were most attracted by the investment opportunity and about half had a familiarity or relationship with with Hellyers Road as a brand.


We want to make sure that all shareholders have the opportunity to understand how good our whiskey is. And so, in the first instance, we'll be sending out our investor rewards, which is a tiered series of bottles of whiskey, to investors. But already we're seeing that enthusiasm from the shareholder base in the speed with which they wanted to get their discount code so that they could place orders on websites. So that, that bodes very well, even a week in.

Mark Hubbard Name Tag

Yeah, that's great. So you've created quite a demand for your product. As part of putting it in their hands as well.


Derek Charge Name Tag

About that demand. From the shareholders themselves, it's that we want them out there as advocates of the brand and they're going to be advocates. Now, business partners.


Mark Hubbard Name Tag

Absolutely. You had a quite a good social media, digital marketing campaign. How did you find that in relation to the benefits it provided to your raise?



Lara Wheby Name Tag

I think it was an exceptional digital campaign, and it worked really well on two fronts. It worked exceptionally for the company branding and for the whisky capillaries. We really wanted to make sure that this wasn't just another crowdfund, this wasn't just a ‘see whiskey barrels through your Facebook’ and that was what was so important to make this raise work.


The essence of what this campaign was about a grown up crowdfund. And I think that that it's status held us in really good sort of stead throughout the combination of our video and the professionalism that was put into it. For me, that was really what set us apart.


It got great traction and we really learned from it as we were going through the weekly meetings, holding us to accountable and reviewing what was happening in the marketing and that was vital to this working, learning, changing, pivoting. What we learned through the campaign was who's investing, why are they investing and retargeting those ads made sure we were bringing in the right people.


The other thing that was very interesting to note from our ads was it seemed like we had very different people coming in on the expressions of interest versus what actually came through in our bidders. We had so many of those high, big numbers coming through in the EOIs, whereas we actually, what we were converting were the $10k investors.


And we learned that quite quickly when we flicked from the EOI to the actual raise going live. We learned what the market was doing, what was converting, and we captured that. And then we drove that home to make sure that we got as many of those people as we could.


Mark Hubbard Name Tag

Yeah, I think good evidence of the success of your digital marketing campaign is demographic that you attracted and the raise size. And it was, it was metric driven, which is essential so you can pivot quickly to ensure your ads are targeting those people that you see as most likely to invest. You also hired a PR firm, did you think that was valuable in achieving your crowdfunding goals?  


Derek Charge Name Tag

I think that was extremely valuable, particularly getting that coverage in the Australian Financial Review. Let's face it, we're talking about a ‘deal’ when it comes to crowdfunding, and so that is the place that you want to be identified – in the media. And we were identified in really positive terms and that came from a well-structured PR campaign. At the same time our raise was discussed in the AFR, there was a review in the AFR about whiskey which gave us that pincer movement, if you like, of the product. Identification as well as the transactional awareness amongst a key demographic for investors for us. As well as that though, there was, there was extensive coverage throughout both trade and domestic or local Tasmanian press, which again, brought an overall awareness to the campaign that I think was actually quite effective in bringing, bringing investors in. Although it's harder to measure than the click through that you get on social media.


Lara Wheby Name Tag

It wasn’t just the PR. It wasn’t that we received media coverage and left it. We absolutely capitalised on it. We leveraged the press throughout the entire life of the campaign and kept looping back to it in our ads. And that’s what made it even more magnified. It was such a good investment at the beginning of the campaign to leverage all the way through.


Mark Hubbard Name Tag

So you brought your traditional media into your social media and kept amplifying that message?


Lara Wheby Name Tag


Exactly!



Mark Hubbard Name Tag

Obviously it was very effective, as we can see from your record breaking crowdfunding result. What advice would you have to others that are contemplating undertaking a crowdsource fund?


Derek Charge Name Tag

Be clear on why this is the right fundraising approach for you, because that will help you crystalise your message from the outset. So If CSF is the last resort for funding because you can't get it from anywhere else, then maybe that should tell you something about the strength of your business plan. Be very clear about why you’re raising because that clarity will help you sculpt your marketing messages and every piece of documentation so that it's actually conveying that genuine reason.


Lara Wheby Name Tag

Start early, talk to your bank. Bring them on the journey with you, because even though you're not getting money from them, if you're doing a CSF, you have probably got some debt. And so just bring them in on it.


Derek Charge Name Tag

Even if you think you've got good connections, don't underestimate the value of the social media spend if you've got the right assets. Spend the money on getting the assets right and then promote them far and wide.


And when you think about it, this campaign been incredibly successful for us in all the objectives we wanted. So, the split on this campaign is we only had one shareholder over 100, 000. So, we've completed the third highest raise ever, essentially out of small, but not very small investors. We've raised most of the money from people who are sufficiently committed to have put $7,000 to $10,000 into our company. Which is exactly the type of people we wanted, and we were targeting, possibly better than we expected.


Lara Wheby Name Tag

If you look at who's successful in crowdsource funding, it's, it's the fun alcohol industry, FMCG, like people. And I think for me, it's the underlying marketing. People are seeking a community. People want to connect. That's the gap in the market at the moment. And we absolutely leveraged that. So I think if you've got a product and the ability to build a community, it's a very smart capital raising method to leverage. But you’ve got to be clear on your goals and value. We thought long and hard about what is that sweets point of bringing people in the community, but not undervaluing our shares.


So, ask yourself, what is your community? How much are they willing to invest and how much do they want to get from community? And what value do they put on that? And then what value do they put on the investment? Because we got a lot of that investment from people who were willing to entrust us with the $10,000 knowing that they're getting the community from it.


Mark Hubbard Name Tag

What's next for you and your investors?


Derek Charge Name Tag

We've gone from having 125 long term shareholders to now having close to 1500 shareholders. And so we've recognised the level of engagement and support that they need, which is why we’ve appointed a person from our team to be our shareholder relations manager. And then in the short term and in the medium term, what’s next is riding off the back of the awareness that this campaign has given people of Hellyers Road, even people who didn't invest when, to further promote our whiskey both here and overseas.


We’ll be ramping up our export in our existing export channels, but also pushing very hard in Australia. We'll continue getting our distilleries humming, and lay down whiskey at a rate of roughly 1200 barrels a year, or to put it another way, about half a half a million equivalent of whiskey a year.


We're already seeing investors really keen to get their hands on our product and to be ordering whiskey and so those direct sales to customers, both to investors and to their connections is a really important element of our long-term strategy.


We were very clear in the offer documents that we're looking for a liquidity event in the two to four years. So, we're very focused on using the same metrics that we measured ourselves in this raise to drive additional value in the business, to drive market penetration, the whiskey price point and the inventory itself.


Mark Hubbard Name Tag

Excellent. Well, congratulations, and it's so exciting to be part of it. Thank you so much for your time.

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