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Sydney-based startup accelerator and investor Scalare Partners has been cleared by the corporate regulator to proceed with its planned $8 million backdoor listing next month.
After issuing two interim stop orders on the prospectus last week, the Australian Securities and Investments Commission (ASIC) has now lifted those orders, paving the way for Scalare to list as planned on October 10.
The reverse takeover of the defunct listed shell company Candy Club Holdings aims to raise $8 million, valuing Scalare Partners at up to $26.8 million with the fresh capital to be used for new and existing investments, as well as an expansion of the company’s Tech Ready Women initiative both in Australia and the US.
The company also aims to fast-track technology development for digitising its products and services.
ASIC put the brakes on the listing on 16 September after raising concerns over the company’s risk disclosures for a US market expansion, the valuation and performance of portfolio companies, and the target market determination (TMD) of its prospectus.
The company this morning revealed that ASIC has now lifted the stop orders issued against Candy Club Holdings, noting that it received notification of the go-ahead on 20 September.
"After conducting its normal examination at that point of any IPO and liaising with the team at Scalare Partners to answer any queries, ASIC has validated the company’s business model by giving it the green light for the offer opening to list on the ASX," says Scalare Partners' CEO Carolyn Breeze.
"Scalare is made of operationally focused entrepreneurs who have founded and scaled many businesses over many years.
"The team is set on delivering significant growth for investors by building on a proven foundation and using their experience and deep industry connections."
Scalare provides scalable startups with a range of services including investment, expert advice, a diagnostic platform, and community programs to spur their growth.
The company says it has delivered 298 per cent total return from inception in 2020 through 27 investments in total which include the likes of Zondii, Brauz, and Loyalty Republic.
The company aims to invest in eight startups per year at an average of $150,000 and a maximum of $250,000, with three full exits to date including the sale of fintech Cape to the UK's Anna Money with Scalare's consideration paid in equity shares in the parent company.
Scalare sources revenue from multiple streams including investment returns from its portfolio of companies, gains from exits, fees for conducting fractional products and advisory services, and membership fees for its development programs and events.
Breeze has previously noted that Scalare is not a fund and does not have a separate fund structure, making it different from other investment firms in the Australian startup ecosystem.
The company posted revenue of $1.99 million and $1.19 million in investment gains in FY24, although the bottom line edged into the red to the tune of $195,000.
Scalare is offering shares at 25c each to raise between $4 million and $8 million, implying a market capitalisation of between $22.8 million and $26.8 million.
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