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Platform Preview - SyndicateRoom




By Lisa Walls-Hester on 6th June 2016


SyndicateRoom recently closed its latest funding round which drew in £3.1 million to fund its ambitious expansion policy. It plans to double its team from the current 22 members and focus on providing investors with access to Initial Public Offerings (IPO) and share placements, in effect acquiring intermediary status with the London Stock Exchange.

 

SyndicateRoom also wants to develop its platform to provide a service which will allow companies to raise equity finance from its very first round right through to its last. This will offer investor’s access to the full spectrum of equity opportunities from the earliest, riskiest, most illiquid opportunities, right through to the later stage, tradable opportunities.

 

The platform wants to equip investors with a single dashboard for their entire range of investments.

 

This latest funding round follows a raise of £1.2 million in May 2015. At that time the sites’ pre-money valuation was £7.3 million, this latest fundraise was conducted at a valuation of £25 million.

 

The last year has been eventful for SyndicateRoom it grew its key KPI’s by three times and became a member of the London Stock Exchange, created its public markets offer and was given the status as an alternative investment fund manager.

 

The platform is pushing the envelope of innovation with a series of first mover initiatives, it’s “intermediary status” with the London Stock Exchange, makes it the first crowdfunding platform to join the public markets.

 

The move will allow all investors to obtain IPO discounts and share placement previously only accessible by institutions. Co-founder and CEO Goncalo de Vasconcelos described the initiative as “Putting the public back into IPO.”

 

About SyndicateRoom:

The site launched in beta at the Great British Private Investor Summit in March 2013.

 

Its founders are Goncalo de Vasconcelos and Tom Britton. They met by chance at a networking event in Cambridge. Both studied at the Cambridge Judge Business School at the University of Cambridge where they were awarded their Naster of Business Administration in 2010 and 2012 respectively.

 

Britton says “The idea for SyndicateRoom stemmed from our belief that the crowd should be offered the same investment opportunities as those being invested in by experienced early stage investors. In a space where valuations and terms are near on impossible to calculate, combining the wisdom of the experienced investors with the power of the crowd provides investors with an added layer of due diligence (for both lead investor and crowd). It provides the companies with the guidance of the experienced members and the network of a much wider audience.”

 

Key developments for SyndicateRoom:

  • In its first year in business, SyndicateRoom raised over £10 million of investment for British companies.
  • July 2014, SyndicateRoom became a founding member of Innovate Finance - an organisation whose goal is to accelerate technology-lead financial services innovation.
  • August 2014, Aeristech Ltd became SyndicateRoom's fastest raise, funding in just 24 hours.
  • March 2015, Con Air Director Simon West's film "Salty" closes funding round on SyndicateRoom raising almost £2.3 million.
  • April 2015, SyndicateRoom launched its Investors Academy. It partnered with BDO, TaylorWessing, and experienced angel investors to provide content and tools focused on educating newer investors on what it takes to be an informed angel investor.
  • March 2016 SyndicateRoom gains intermediary status with the London Stock Exchange.
  • May 2016 SyndicateRoom closed Series A funding round raising a total of £3.1 Million.

 

The platform differentiates from other with a philosophy that all investors should have equal access to investment opportunities, and the crowd should get the same deal as professional investors. It believes other crowdfunding platforms focus on the entrepreneur and on providing value to entrepreneurs, not investors.

 

SyndicateRoom’s investors co-invest in start-ups alongside experienced business angels and receive the same economic rights as the lead investors. If they make money, so does the crowd.

 

The platform marries investors with entrepreneurs who have already secured the backing of at least one angel investor. Companies seeking investment via SyndicateRoom are required to have at least 25 percent of the investment round already committed from business angels and/or professional arm’s-length investors.

 

The SyndicateRoom model focuses on adding value to investors and attracts sophisticated investors who typically invest larger sums.

 

"Much of crowdfunding is about small amounts of cash to support what I call social enterprise. The syndicate room is different because it is all about using the business know-how and due diligence of the professional class of large-scale private investors." Says de Vasconcelos.

 

At £1,000, minimum investments are higher than most crowdfunding sites, which can start at £10, but in return, investors are treated in the same way as the lead angel investor, who has funded at least 25 percent of the investment.

 

SyndicateRoom restricts private market offers (equity crowdfunding rounds) to those investors who have certified as sophisticated or high net worth investors. Retail investors are only able to invest in the public market offers.

 

In addition to individual investors, institutional investors have invested through the platform.

 

It has gained the support of several angel networks across the UK and works with over 40 different lead investors or investor groups. This ranges from individual angel investor including Jim Mellon who led the round for the Diabetic Boot Company to Mercia Technologies who led the round for Canary Care.

 

To date, SyndicateRoom has been funded to the tune of almost £5 million and its owners are a combination of Angels, The Crowd, a VCT, and other investors. It is at the leading edge of the alternative finance landscape helping to raise over £50 million for British Businesses through participation in so far over 80 funding rounds. 

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