The UK equity investment market was worth over £12B (approx €13.2B) in 2019 and was the ‘busiest year on record’ for crowdfunding as per crowdfunding platform Crowdcube. Both the equity crowdfunding platforms – Seedrs and Crowdcube, have collectively raised £2B (approx €2.2B) in fundraising to date for 1,500 UK businesses.
Since lockdown, Freetrade, Moneybox, and what3words have all raised over £7M (approx €7.7M) from over 35,000 investors – three of the most popular campaigns of equity crowdfunding history.
Crowdcube and Seedrs merger
With this development, Two UK-based equity crowdfunding platforms Crowdcube and Seedrs have agreed on terms for a merger.
Both companies believe this move will accelerate their plans to create one of the world’s largest private equity marketplace and further democratise investment.
On completion of the merger, Jeff Kelisky, Seedrs’ CEO, will serve as CEO of the combined company, and Darren Westlake, Crowdcube’s CEO and co-founder will serve as Executive Chairman. The management team will include key leaders from both businesses.
The combined company aims to deliver new innovations and products that will make it significantly easier, more affordable, and valuable for ambitious businesses to raise growth finance, and investors will have a greater selection of investment opportunities with richer investment tools.
“Together with Seedrs, we can accelerate plans to further expand in the UK and overseas, launch innovative new products and improve our customers’ experience,” says Darren Westlake, CEO and co-founder of Crowdcube.
Crowd control
The merger will be structured as an acquisition by Crowdcube of all of the outstanding share capital of Seedrs Limited via a scheme of arrangement. Existing Crowdcube shareholders and option holders will own 60% of the combined company, and existing Seedrs shareholders and option holders will own 40% of the combined company. The merger ratio reflects the approximate valuations of the two companies based on each of their most recent fundraising rounds.
The transaction is subject to approval by, among others, the UK Competition and Markets Authority (CMA), the Financial Conduct Authority (FCA), and shareholders of the two companies as well as the sanction of the Court.
Following the completion of the merger, the companies will work together to define how the two businesses will combine their teams, customers, brands, services, and technologies. The transaction is expected to be completed in late 2020 / early 2021.
Why merge?
Both companies, independently have disrupted equity investment in the UK and played a key role in Europe’s fast-growing equity funding ecosystem. Both companies believe this proposed merger will create substantial value for their investors. Here how both these platforms have helped various companies over the years.
- There have been 3 IPOs and 49 acquisitions of companies that have crowdfunded through one or both platforms
- In February, Pod Point, which raised on both Crowdcube and Seedrs, was acquired by EDF
- Three businesses, BrewDog, Monzo, and Revolut, which are collectively valued at over £7B (approx €7.7B), have gone on to become unicorns following successful crowdfunding campaigns
- The Seedrs Secondary Market launched June 2017, has facilitated over 30,000 investor exits, and has seen more than £13M (approx €14.3M) traded at up to 23x returns.
- Since 2011, over £2B (approx €2.2B) has been invested in campaigns on Seedrs and Crowdcube
- Together, the companies have helped over more than 1,500 companies secure investment
By joining forces, the combined company will aim to deliver new innovations and products that will make it significantly easier, more affordable, and valuable for ambitious businesses to raise growth finance, and for investors to have an even greater selection of investment opportunities with richer investment tools.
About Crowdcube and Seedrs
As an investment crowdfunding platform, Crowdcube enables entrepreneurs to raise funds with the added benefit of being backed by their community. For investors, the platform provides a way to hand-pick a stake in an innovative business they believe in that traditionally would have been restricted to professional investors.
Since its inception in 2011, Crowdcube has helped more than 1,120 startups to raise funds. With more than 900,000 members, a total of £1B (approx €1.1B) has invested on the platform to date.
Businesses that have successfully raised funds with Crowdcube include BrewDog, Camden Town Brewery (acquired by AB INBev), carwow, JustPark, eCar Club (acquired by Europcar), Feedr (acquired by Compass Group), among others.
As for Seedrs, it is also an online investment platform. It allows investors to buy and sell shares in private companies, and ambitious entrepreneurs to gain investment for their businesses while building communities in the process.
Since its launch in 2012, Seedrs has funded over 1,140 deals, with nearly £1B (approx €1.1B) invested on the platform to date. Businesses that have successfully raised funds with Seedrs include Revolut, Perkbox, Wealthify (sold to Aviva), Tandem, FreeAgent (sold to RBS), and Allplants, among others.
Seedrs is backed by leading European institutional investors, as well as over 4,600 of its own customers.
Image credits: Crowdcube