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Platform Preview - Seedrs




By Lisa Walls-Hester on 24th June 2016


Seedrs was recently named the most active investor in private companies in the UK in a report from independent research firm Beauhurst. The report, The Deal 2015/16, also showed that the platform has over 52 percent market share within the UK equity crowdfunding space.

 

The report gives the top three sectors for investment as Technology, Business and Professional Services and Industrials. It reports that Seedrs took the lead for the most active investor in Technology with 81 deals compared to second place contender Crowdcube’s 56 deals. In Business & Professional Services sector Seedrs funded 55 deals and nearest competitor was Crowdcube with 26.

 

About Seedrs:

 

The platform started life as part of an MBA project at Oxford’s Said Business School, by Jeff Lynn and Carlos Silva.

 

Lynn says “The idea for Seedrs emerged during my and my co-founder’s time at Oxford. Carlos had had the idea of a peer-to-peer investment platform like Kiva or Zopa, but with equity rather than debt.  At first, I thought this was just a really interesting intellectual exercise. Still very much in a legal mindset (I was a lawyer in my previous life), I thought the challenges around making this work legally were fascinating.

“I fairly quickly realised that it was not just theoretically doable in the UK but also a really compelling business idea.

“There were lots of people who were interested in early-stage businesses but had no way to invest in them. If you wanted to invest in a startup as an individual, you had to be an angel. Carlos and I liked the idea of being able to invest £500 or £1,000 in an interesting new business rather than £25,000.

“So we were looking at classic market failure: unmet demand and untapped supply, both waiting for an intermediary to bring them together. The Seedrs concept as a solution seemed very apt.”

The platform went on to launch commercially in July 2012 and was the first crowdfunding equity platform to receive regulatory approval from the Financial Conduct Authority.

 

The platform allows all types of investors to invest as little as £10 in businesses in many sectors.

 

All investments made through Seedrs offer voting shares and use professional-grade subscription agreements to ensure all investors get the same level of protection.

 

Key developments:

 

  • In May 2014, Maily became the first business to receive venture capital investment alongside crowd investment, raising a total of almost £300,000 on Seedrs.
  • In July 2014, Seedrs launched the world's first convertible equity crowdfunding campaign, featuring Adludio (then known as Future Ad Labs).
  • In September 2014, Seedrs launched the world's first equity crowdfunding campaign for a publicly traded company - Chapel Down.
  • Since its launch the platform has grown exponentially and claims to have trebled its turnover between 2013-14, and again in 2014-2015.
  • So far Seedrs has funded over 350 deals and with over £130 million invested into campaigns on the platform.

 

Seedrs made the decision to start small and grow organically. It started funding small deals, capped at a £150,000 and funded larger deals gradually. The site has now grown into one of Europe’s leading equity crowdfunding platforms and it says its rapid growth is due to the value it provides to entrepreneurs and investors alike.

 

The site now runs campaigns ranging from £20,000 to more than £3 million.

 

Owners:

 

Seedrs received £1.3 million of funding in May 2012 from investors including DFJ Esprit, Digital Prophets and a number of angel investors. In December 2013, Seedrs raised just over £2.5 million through its own platform from 909 investors.

In 2015, Seedrs announced a £10 million Series A fundraising round led by star fund manager Neil Woodford and Lord Rothschild’s Augmentum Capital. It also included a £2.5 million crowdfunding component. The Series A valued Seedrs at £30 million.

 

Seedrs will continue to grow the business in the UK and internationally. The platform aims to expand in Europe and the US.

 

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