Australia’s first listed fintech fund pulls its float

Elizabeth Barry 14 October 2016

h2 venturesH2Ocean will continue to raise a private fund after falling short of its capital raising target.

Australia's first listed fintech fund H2Ocean has pulled its ASX listing after failing to raise sufficient capital. The fund, started by H2 Venture founders Ben and Tony Heap, had been aiming to raise between $27.5 million and $55 million to provide an investment alternative to traditional equities and deliver capital growth to investors.

Speaking to the Australia Financial Review, Ben Heap said they preferred to withdraw the prospectus rather than continue with a lower amount.
"Ultimately we didn't get to the level of demand ... needed to construct a diversified portfolio," he said.

"A number of larger institutional investors that we spoke to professed the desire for it to begin unlisted. Their concern was that it would be difficult for the market to price the portfolio otherwise."

The fund had a promising start with high-profile support from Mike Cannon-Brookes, Atlassian co-founder and director or Tyro Payments, as well as David Koch, former Assistant Innovation Minister Wyatt Roy and Beyond Bank chair Anne O'Donnell as directors.

The Heap brothers planned to have a minimum of 15 startups in its portfolio, many of which were from the H2 Ventures accelerator program, but looked to expand it with as many as 50 startups from here and overseas.

The company is now aiming to raise capital as a private fund and has a slightly smaller capital raising goal of between $25 million and $30 million.

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