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Merger in the Equity Crowdfunding Space




By Ryan Weeks on 10th February 2016


Newly launched equity crowdfunding portal Growthdeck has merged with Squareknot.

 

Growthdeck will in essence be absorbing the 5,000 strong investor base of the Squareknot platform. The vast majority of those investors are based in Scotland. The bulk of Growthdeck’s existing investors – which were sourced through a partnership with Radius Equity – are based in London and the Midlands. Squareknot MD Derek Bond will join Growthdeck in a “senior role” and will be bringing his team with him. Derek will continue to be based in Scotland.

 

Growthdeck has defined its key differentiator in the broader equity crowdfunding space as “professional grade due diligence” – taking a private equity-like approach to funding early-stage businesses. CEO Gary Robins spent 15 years in private equity prior to the inception of Growthdeck. The platform is not dissimilar in style and approach to VentureFounders, which arrived on the scene in late 2014 on a mission to “professionalise" the equity crowdfunding sector. James Codling, CEO of VentureFounders, and Paul Moravek, James’ fellow Co-Founder, also hail from private equity backgrounds. VentureFounders has already topped the £20m mark in cumulative funding, and completed a £1.8m fundraising round a few weeks back. The platform’s approach has clearly resonated with investors, and Growthdeck may be able to strike a similar chord.

 

M&A activity in the crowdfunding space has been fairly scarce to date. Trillion Fund and Buzzbank – two founding members of the UK Crowdfunding Association – joined forces in July 2014, but we haven’t heard much about the tie-up since.

 

Squareknot launched in Glasgow in 2013, and has facilitated a little shy of £1m in equity investments to date. Scotland has to date been fairly quiet on the alternative finance front, with Jude Cook’s ShareIn standing out as one of the few competitors in the local equity crowdfunding space. Could the joint forces of Growthdeck and Square take this nascent market by storm? Mr. Robins weighed in:

 

“Growthdeck is an ambitious business and this deal underlines that.”

 

“This provides us with an excellent foothold in Scotland, both in terms of investors looking for opportunities and entrepreneurs seeking funds.”

 

“By undertaking proper due diligence and using that as the basis for sensible valuations of investee businesses, Growthdeck represents the best option for prospective crowdfunding investors.”

 

“Derek shares our philosophy and vision for creating the most professional crowdfunding platform in the UK, and I am delighted to welcome him into the Growthdeck team.”

Comments

Clive Bonny

16 Feb 2016 10:17am

Having met Derek and discussed due diligence processes I'm confident that the merger will assist both parties and bring additional assurance to the crowdfund market. GrowthDeck have rightly emphasised the need for more comprehensive background checks. That will reduce future casualties and enhance investment opportunities.


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