OnMarket founder Ben Bucknell with Malcolm Turnbull, who placed the first bid for $2000 worth of shares in Bitcoin Group’s upcoming IPO on Bucknell’s trading account.

It was standing room only on the 26th floor of Bloomberg’s lavish Sydney CBD offices Wednesday morning as more than 100 members of the financial and start-up community gathered to watch the ‘innovation’ Prime Minister place a $2000 bid for shares in Bitcoin Group’s upcoming initial public offering.

Flanked by OnMarket CEO and founder Ben Bucknell, Liberal MP Angus Taylor and the new Assistant Innovation Minister Wyatt Roy, Malcolm Turnbull officially launched — and threw his considerable weight behind — OnMarket, a new fintech app which promises to give average Joes a shot at a lucrative investment market, previously the exclusive domain of the super rich.

“Ben Bucknell is about to risk $2000 of his parents’ hard-earned money,” Mr Turnbull quipped as he pressed the button.

Last year, only 16 per cent of initial public offerings were offered to retail investors. Those that are offered to the public are generally treated with suspicion — if it’s passed up by the big institutional investors such as UBS or Deutsche Bank, who invariably get first pick of capital raisings to offer to their wealthy clients, it generally means the IPO is a dud.

Billed as the first product of its kind in the world, OnMarket wants to shake up the primary investment market — IPOs and capital raisings through share placements — by making them available to everybody.

Mr Bucknell described the app as “borne out of the belief that technology has the power to transform capital markets”. “OnMarket aims to democratise access to capital raisings,” he said.

The app provides investors with free third-party research on each offer from more than 10 providers including Intelligent Investor, Motley Fool, Thomson Reuters, Fat Prophets and Stocklight, and guarantees fair allocations.

As of 2014, there were more than 534,000 self-managed super funds with more than one million members holding $557 billion in assets, with that figure growing at 7 per cent every year. OnMarket’s founders estimate over the past five years, retail investors were excluded from $66 billion in placements and $20 billion in IPOs.

With six million Australians direct investors in the share market and another 3.6 million keen to start — two million of whom are under 37 — OnMarket sees an opportunity to connect a massive pool with companies which need the money.

In the process, it could help bring down fees. “The brilliance of this application is simply that it makes it easier to buy, makes it easier to trade,” Mr Turnbull said. “If you want to sell something, make it easier for your customers to find you, to reach you, to transact with you. Inevitably this application will open up the investment market considerably.”

Mr Turnbull said the history of technology in financial services is that it had placed downward pressure on prices. “Technology has made price discovery much more immediate, and that has reduced spreads in every market,” he said.

“It’s made markets more efficient and given more power to the individual investor.

“People in the financial services sector are constantly having to work harder to justify the charges they make, and I think this is good. The more competition, the more power you give to the customer the better.

“The more choice you give people, the more freedom you give people, the more likely they will transact with you.”

OnMarket is based on the learnings from the company’s first product, OnMarket BookBuilds, which used the same technology but was available only to brokers. Since 2013 it has raised around $150 million via 15 share placements and six IPOs.

Diana D’Ambra, chair of the Australian Shareholders’ Association, said the big problem for the company would be the same issue faced by BookBuilds — attracting the high-profile placements that actually offer value to investors.

“I think the concept is great, it’s good because it’s available to all investors irrespective of what level they are,” she said.

“The big issue is whether they will attract some of the bigger placements. If you look at some of their past transactions, a lot of them are small and probably unknown companies. Savvy investors will be wanting contemporary, high-end companies that have quality and track record.”

For upcoming IPOs not on the platform, OnMarket has a ‘campaigns’ feature — a virtual petition which will allow users to indicate their interest in buying shares in the company. Once a campaign has enough votes, OnMarket will approach the company.

Ms D’Ambra welcomed the feature. “It’s people power,” she said. “Companies have to be seen to be treating all shareholders equally. If you can get enough people to respond and express their interest, to ignore a call like that [would look bad].

“At the end of the day everyone wants capital. If there’s no difference on pricing, it should be a win-win for both the companies wanting the money and the customer at the other end.”

frank.chung@news.com.au