Republic, a New York-based investment platform that backs startups, real estate, crypto, and video game businesses, announced on Thursday, September 1, that it has completed the acquisition of UK-based crowdfunding platform Seedrs.
The deal is completed almost 9 months after Republic announced the acquisition of Seedrs at approximately $100M (then, approx €88M).
Both Republic and Seedrs have maintained a longstanding partnership over the last four years. The Seedrs leadership team has served as trusted advisors to Republic’s leadership team.
An equity crowdfunding platform
Founded in 2012 by Jeff Lynn and Carlos Silva, Seedrs is 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.
Seedrs claims to be the first regulated securities crowdfunding platform in the world. Since its inception, it has funded more than 1,400 deals, with nearly £1.5B (approx €1.7B) invested on the platform to date. Seedrs is backed by various European institutional investors and over 4,600 of its customers.
Despite the acquisition by Republic, Seedrs will continue to operate under its existing name and brand as part of Republic’s newly formed global retail arm.
The Seedrs’ leadership team will continue in their leadership roles to grow the Republic’s footprint across Europe, while contributing to the global mission.
Aim of the acquisition
With this deal, Seedrs will become the European section of Republic’s recently expanded global retail business, enhancing investment prospects for the 2.5 million users and 1,370 active portfolio firms that make up the whole user base.
With 600 deals and $300M in net investment anticipated to pass through the merged platform in 2022, Jeff Kelisky, the current CEO of Seedrs, will head the global retail division.
According to Republic, the deal strengthens its mission to make private investments available to everyone, while also expanding its footprint throughout Europe. Seedrs claims to have facilitated companies with more than £2B in investment on its platform. It has managed more than 1,700 successful campaigns, including fast-growth brands like THIS, Revolut and Chapel Down, while the pioneering Seedrs Secondary Market has seen over 700 companies have their shares traded in over 44,000 transactions.
Kendrick Nguyen, Republic’s founder and CEO, says, “This is an exciting time for Republic as it extends our global reach and broadens our capabilities. Seedrs has long been a force in Europe within equity crowdfunding and private investing. By bringing Seedrs into Republic we gain, not just further geographical expansion, but also the team’s talent, technology and knowledge. This will help strengthen our position as a global leader and better serve the founders and businesses and the investors that support them.”
Developments by Seedrs
Recently, Seedrs launched its European HQ in Dublin, with MD Randal MacDonald and Finance Director John Gavin now onboard to help accelerate European growth. This is in addition to the recent addition of senior hires in Lisbon, Madrid, Amsterdam, Stockholm, and Copenhagen.
Since the beginning of the year, Seedrs has seen a number of continental campaigns raising millions of dollars for European companies, including Fishbrain in Sweden, BUX in the Netherlands, and Estate Guru in Estonia. Therefore, Republic has also invested funds into Seedrs to provide new technologies and solutions to European investors and private enterprises in order to further drive growth throughout the area.
This acquisition and recent European growth caps a landmark 18 months for Seedrs. After celebrating 10 years since its first campaign in July, Seedrs crossed £2B in total investment in August.
Last year, Seedrs witnessed a 137 per cent growth in investment activity. It completed 310 deals in 2021, helping businesses from 14 different countries to raise funds and received investment from investors in over 74 countries. It also facilitated over £12M of secondary share sales between 19,000 buyers and sellers on the platform.
Highlights from the last 18 months include:
- Making investment opportunities into VC funds, including JamJar Investments and Passion Capital III fund, available to retail investors
- Ongoing leadership in the equity crowdfunding space, with Chapel Down raising £6.9M from 4,700 investors; Spoke raising £4.7M from 1,579 investors, THIS raising £11M in total across 2 raises and Crypterium, a crypto app, raising €3.1M from over 2,500 investors
- The ongoing growth of the secondary market, with 17,000 trades in 2021 alone and 44,000 total trades since its launch in 2017
Leadership structure after the deal
The structure of Republic/Seedrs leadership team will be adjusted as following: Kendrick Nguyen, Republic’s founder, will remain as CEO of Republic’s parent company, OpenDeal Inc, while Jeff Kelisky, Seedrs CEO, will be taking responsibility for Republic’s global retail investing arm via his continued leadership of Seedrs Limited as well as executive roles at other Republic entities. Seedrs CMO Kate McCutchen will oversee Republic Retail’s global marketing efforts and Joel Ippoliti, Seedrs CPO, will become the global product lead for the retail investing organisation.
CEO Jeff Kelisky, says, “We have built a really great business, driven by a mission to disrupt the world of private investing and become a global leader. This deal is a natural extension of our relationship with Republic – a coming together of two pioneers with a shared vision and purpose. Together we are now the first truly global platform for private equity investing with the drive, capital, and capabilities to shape the future of the industry.”
Brief about Republic
Founded in 2016, Republic allows everyone to invest in private market equity, debt, or crypto offerings through their retail platform The company operates several distinct business lines, including a retail investment platform, a private capital division, and a blockchain advisory practice.
Republic has almost $1B in assets under management through its private asset management practice.
The big disappointment!
In 2020, UK’s crowdfunding platforms Crowdcube and Seedrs announced their £140M (€162.5M) merger. But in order to complete the development, they needed to go through an approval process with shareholders, the Competition & Markets Authority (CMA), and the Financial Conduct Authority (FCA).
The CMA agreed to ‘fast track’ the anticipated merger to an in-depth Phase 2 investigation, after finding likely competition concerns. The CMA found that both companies compete closely against each other to win the business of SMEs, with a significant number of businesses viewing equity crowdfunding as their only way to secure financial backing.
Unfortunately for both companies, the Competition and Markets Authority (CMA) blocked this merger, as it believed that “a deal between the two could result in UK SMEs and investors losing out as a result of higher fees and less innovation.”