German equity crowdfunder Companisto has churned out a successful exit.
“5 CUPS and some sugar” produces, sells and ships bespoke tea blends, which customers create for themselves by choosing from over 50 different ingredients. The fledgling company raised a grand total of €300,000 from 742 private investors via a Companisto fundraise in June 2013. Less than 2 years later, 5 CUPS made a redemption offer to those 742 investors. That offer has now been accepted.
5 CUPS proposed to buy back the shares that were distributed in the initial fundraise for €436,000 – a 45% return. Such is the structure of Companisto that in order for the offer to be accepted, at least 75% of the 742 investors had to be in favour of accepting. 93.79% of the investors took advantage of their right to vote. And 98.41% of those voters opted to walk away with 45% returns.
A fantastic story for an industry that sorely needs to start stockpiling examples of actual return. Companisto is certainly doing its bit. This is the second time that a buyout offer has been fielded by the platform’s investors. In November 2014, investors that had channeled €100,000 into the Companisto platform, through a self-sustaining crowdfunding round in 2012, were offered the chance to double the value of their investment. A VC by the name of Lake of Constance Ventures GmbH tried to scoop up the Companisto shares for €200,000. 68.11% of voters declined the offer, choosing instead to hang onto their shares in the hope of an ever greater upside in the future.
Another prominent example of equity crowdfunding returns is the now famous ReWalk Robotics IPO. The exo-skeleton technology company that was twice-crowdfunded via the Israeli platform OurCrowd generated its investors a 5.5x return on the value of their original investment. SyndicateRoom’s Mill Residential REIT has also generated a modest return for its investors.
So Companisto’s investor base declined the chance to walk away with 100% returns in December 2014, but jumped at the offer of a 45% return from the 5 CUPS campaign. What are we seeing here? I look upon these results as evidence that Companisto’s are making considered investment decisions. Only time will tell whether they prove to be the correct decisions. But as I wrote in a summary of equity crowdfunding development in 2014:
“Whether the wisdom of the crowd will be proven remains to be seen – but we are at least assured that equity crowdfunders seemingly do not jump indiscriminately at the offer of profit.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.