June 2024

How RareX saved $100k in broker fees whilst raising $1.5m through InvestorHub

Learn how RareX's CEO used InvestorHub to raise capital with 0% discount directly from its shareholders.

Industry: Materials
Headquarters: Western Australia
Market cap: ~$11m

Problem.To raise capital, most public companies rely on intermediaries. This leads to negative consequences, such as heavy discounts, high broker fees, share dilution, and significant post-raise share price slumps.

Solution.RareX engaged a list of top 50 and other high-net-worth investors identified using the registry-integrated CRM which created the confidence of sufficient investor demand to run their own placement.

Impact.RareX were able to raise with a 0% discount from existing shareholders, and in doing so saved $100k+ in broker fees and 15% in share dilution. They were also oversubscribed, which meant they could allocate shares to loyal shareholders who were less of a risk of selling off post-raise.

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"Our shareholders have been extremely loyal to us throughout rare earth metals' volatile ups and downs and we want to reward that loyalty. By minimising existing shareholder dilution and other costs like broker fees, we're fighting to bring this business back into profitability for them."

James DurrantCEO @ ASX:REE

Building confidence in your investor demand.

Most public companies need to raise capital once or twice a year but are forced to rely on intermediaries like brokers who only provide indirect access to investors. This causes companies to incur unnecessary fees while increasing dilution for existing shareholders.

RareX leveraged InvestorHub by marketing direct-to-investor as part of their raise engagement strategy. They built the confidence to run their own placement without a broker by proactively identifying investor demand through their high-net-worth investors in the top 50 and beyond with the registry-integrated CRM, ultimately saving $100k in broker fees and 15% in shareholder dilution.

We've gone through the step-by-step process below.

"I used InvestorHub to identify a list of high-net-worth investors in my top 50 and beyond. By reaching out these shareholders personally, I was able to answer their questions and have a conversation around the future of RareX, which was key towards shifting their perspectives into investing more and building the confidence that we could manage and fill our own placement."

James DurrantCEO @ ASX:REE

Identifying and engaging placement demand.

Here's how RareX leveraged InvestorHub as part of their direct-to-investor marketing strategy to identify their high-net-worth investors, engage them before the capital raise, and communicate with the market post-raise to execute a successful $1.5 placement while minimising dilution and saving fees.

Identifying investors.

RareX leveraged the registry-integrated CRM to identify a list of the top 50 investors and other high-net-worths to nurture and engage before making a decision on their capital raise.

Building interest.

James Durrant (CEO) personally called and engaged these investors by giving them updates, providing context to key decisions and listening to their concerns which created interest and confidence in their upcoming placement.

Converting demand.

With the confidence that existing shareholders supported them, RareX executed their own placement without a broker which enabled them to avoid broker fees entirely and raise with no discount or options to minimise existing shareholder dilution.

Post-raise engagement.

They hosted a post-raise investor webinar and communicated to the market the benefits of managing their own placement with an interactive session while answering investor questions publicly.

"We had the confidence to run our own placement because we identified and engaged with our shareholders beforehand. We didn't issue any broker options or market options and without the discount, that resulted in about 15% less dilution of the existing shareholders than would have been the case otherwise and saved us the best part of $100k worth of fees".

James DurrantCEO @ ASX:REE

ASX:REE used these InvestorHub features to scale their direct-to-investor marketing:

Investor CRM

Interactive investor hub

Automated announcement distribution

Email campaigns

Investor Q&As

Interactive announcements

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