Crowdmatrix Helps Usher in Era of Equity Crowdfunding

Crowdmatrix has launched its first west coast deal, an investment in Vancouver-based grow-your-own food app My Green Space, adding to its growing roster of investments.

My Green Space, which helps users buy products for and troubleshoot their gardens in houses and condos, is the fourth investment for Crowdmatrix, a registered exempt market dealer that launched about two years ago.

Crowdmatrix, which is backed by Toronto-based VC Extreme Venture Partners and headed by Rubsun Ho, is raising $300,000 for My Green Space.

An economic and social investment

The My Green Space lead investor is Vancouver-based Varshney Capital, which put in $50,000. The total raise is $500,000.

Director Praveen Varshney, who is an investor in several healthy food companies, said My Green Space was “a nice complementary addition to the portfolio” and cited the passion of founder Mike Moll and his team as one of the reasons his company got behind the startup.

“Every home can and should have a garden—even if you live in an apartment or condo,” said Varshney.

“The whole idea to get people connected or reconnected back to food, especially with the millennials and urbanization trend, eating fresh locally grown in season is the best thing for the body and the best thing for the planet (we should be saving greenhouse gas by not shipping food all over the world).”

Varshney said he was attracted to My Green Space’s “globally scalable business model with a good recurring revenue,” as well as its social benefits, which includes helping to put gardens in schools and other public buildings and growing communities.

Crowdmatrix closes first deal

Crowdmatrix recently closed its first deal with home concierge app Homigo, for $230,000, which was above the original goal of $200,000 in pre-seed capital. It was the first financing round for Homigo, which has since attracted other investors across North America.

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Crowdmatrix’s largest raise to date is Zoom, an automated virtual assistant company, for $650,000. The lead investor, Extreme Venture Partners, put in $500,000. Zoom was founded in 2016 by entrepreneur and investor Roy Pereira.

Crowdmatrix is also raising $495,000 for e-commerce app Spently, which is being led by Extreme Venture Partners and Vitality Capital.

Growing startup ecosystem

Ho says Crowdmatrix is “almost overwhelmed” by the number of startups seeking financing across Canada today, which underscores the growth in the entrepreneurial community.

“We are trying to help some of these companies find lead investors and create a more efficient ecosystem — to get these companies their early round of funding,” Ho said. “There is no end of demand on the company side. On the investor side, we’re seeing a lot of interest. It’s just that Canadians by nature are a little more conservative.”

He notes the crowdfunding market in Canada is disproportionally smaller to countries such as the U.S. and UK, as evidenced in a recent report from the National Crowdfunding Association of Canada (NCFA).

It says crowdfunding volumes were expected to reach $190 million in 2016, up from $133 million in 2015. Still, that’s well below $36 billion USD in the U.S and £3.2 billion in the UK.  The NCFA says Canada’s crowdfunding industry is “punching below its weight” compared to international markets, due in part to country’s patchwork of regulations for the alternative investing model.

Ho said Crowdmatrix is seeking to grow, in part by diversifying into other assets classes such as real estate development, resource company startups, down the road.

“We are working towards that in 2017,” he said.

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