Seedrs is the first UK equity crowdfunding site to make the move stateside by acquiring the platform Junction.
The US equity crowdfunding market is expanding and evolving at a very fast rate. It is also poised for significant progression just as soon as new legislation is passed that will allow retail investors to participate in the sector. The platform will be unrivalled within the States in terms of its past dealings with retail investors.
Junction is a California-based company that was founded in 2012 by Brian Goldsmith and Adam Kaufman. The company has up to now been focused on raising finance for entertainment assets. Junction created a way for ordinary people to invest in films alongside the “smart money” (professional film financiers). The platform aimed to make film financing more efficient, transparent and inclusive.
“The management teams of Seedrs and Junction have been in contact for nearly a year, and it has been obvious from the outset that we would be a great cultural fit. We share a passion for connecting investors with opportunities to invest for growth, as well as a commitment to professionalism, investor protection, and compliance.”
Compliance is one of the main problems that Seedrs will face when trying to merge the 2 platforms. Equity crowdfunding was opened up to accredited investors by Title II of the JOBS act at the end of last year. Title III is caught in a regulatory holdup – but once passed it will open up equity crowdfunding to the masses. By that point Seedrs will hope to be in prime position to take advantage of the massive US market opportunity.
Seedrs has indicated that one of its founding principals is that investment in startups and growth businesses should be global and this has driven its expansion to the US. For Junction, the move to should make for rapidly accelerated growth. The move is not dissimilar in style to Funding Circle’s crossing of the pond last year. The UK’s leading peer-to-business lender acquired another lending business – Endurance – in order to leapfrog regulatory barriers to entry.
This is the first UK crowdfunder to expand to the US. We have previously seen platforms expanding to Europe. For example Crowdcube have extended into Italy, Spain, Poland, Sweden and Dubai. It is highly likely that we will see many more platforms following in Seedrs footsteps and take on the challenge of entering the US market.
Now in its sixth year, the AltFi London Summit returns on 18th March 2019 to 155 Bishopsgate. Last year proved to be a crucial turning point for the key players building the future of finance. Leading platforms launched oversubscribed IPOs, digital banks proliferated and mainstream financial institutions started their own disruptive propositions. With 2019 certain to be another landmark year, more questions will be asked by regulators with investor interest in disruption also poised for more rapid growth.