The moment that Crowdcube, its investors, and indeed the UK equity crowdfunding market has been waiting for has arrived.
E-Car Club raised £100,000 in 2013 from 63 investors via the Crowdcube platform. The business has just been sold to Europcar, Europe’s foremost car rental and mobility company. Though exact figures are yet to be disclosed, the 63 private investors will reportedly receive “a multiple return”.
E-Car Club pairs the concept of pay-as-you-go car usage with electric vehicles in order to deliver an affordable and environmentally friendly service to its customers.
Christopher Morris, Co-Founder of E-Car Club, weighed in:
“By joining forces with Europcar we now have access to the considerable investment and resources that we need to accelerate our growth and reach more communities. We will continue to have a social mission at the heart of our business: to improve mobility on a local level whilst simultaneously reducing the cost and environmental impact of each journey taken.”
While we’re lacking in hard numbers – namely, the exact return achieved by the 63 investors – we have a clear picture of the activity of those investors. The average investment size in the E-Car Club round was £1,500. The single largest: £15,000. Collectively, the 63 investors have made 894 investments through the Crowdcube platform – 237 of which belong to a single investor’s portfolio.
87.5% of E-Car Club’s 63 investors went on invest in other businesses via the platform. For these very active investors, the exit is most welcome, but more of the same will be needed before the efficacy of their Crowdcube investment strategies may be ascertained.
Harald Neider, an investor in the E-Car Club round, commented:
“I am delighted to have such a good return on my investment and I wasn’t expecting it to happen so quickly.”
This is certainly the first exit that we’ve seen take place within the UK crowdfunding market. SyndicateRoom funded Mill Residential REIT in May, which then went on to list on the AIM. But REITs are required by regulation to be listed, and whilst some return may have changed hands, we wouldn’t go so far as to call this a true exit.
Gazing through a pan-European lens, the E-Car Club case is the second successful exit. “5 CUPS and some sugar”, a producer of bespoke tea blends which raised €300,000 from 742 private investors in June 2013, recently offered to buy back the shares that were initially distributed in that fundraise. Over 98% of the Companisto investors voted to accept the offer, and made a 45% return on their money.
Taking a world view places the E-Car Club exit in third place, behind “5 CUPS and some sugar” and the industry poster child that is ReWalk Robotics. The robotic exoskeleton producers raised $3.3m in a pair of OurCrowd campaigns between 2013 and 2014, and listed on the NASDAQ in September, raising $36.3m. OurCrowd’s accredited investors pocketed over 5.5x the value of their original investments in under 18 months.
It’s heartening to now be able to make reference to multiple examples of equity crowdfunding exits, and more heartening still to cite a UK example. Of course, the future success of the sector depends on the E-Car Club exit being the first in a chain of successes. As Crowdcube Co-Founder Luke Lang put it:
“With over 260 businesses funded on Crowdcube I am certain that this will be the first of many."
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.