Crowdcube is planning to raise money under a prospectus on its own platform, meaning the round could well top the €5m mark.
Crowdcube is poised to follow in the footsteps of Brewdog. The UK’s largest equity crowdfunding platform by volume is planning to raise money on its platform under a prospectus, allowing the crowd to contribute more than the €5m cap that applies to ordinary crowdfunding campaigns, according to EU law. No platform in the UK, or indeed in Europe, has yet raised funding in this way. It has not been specified exactly how much Crowdcube will seek to raise through the round, which will go live on the platform in a few weeks' time. The prospectus has not yet been made available, but it is expected to contain details of the company’s future growth plans.
Brewdog blazed the trail for these sorts of offerings with its “Equity for Punks” campaign. The craft beer brewery raised £19m from over 42,000 backers between May 2015 and April of this year. Brewdog in fact turned to Crowdcube for assistance in September of 2015. The brewery opened up the Equity for Punks campaign to Crowdcube investors, while concurrently running a “Brewdog Bond” campaign, raising a little over £800,000.
Brewdog’s flair for marketing certainly seems to have rubbed off on Crowdcube. That same attention-grabbing style is on display in the campaign’s promotional video, in which Crowdcube co-founders Darren Westlake and Luke Lang invite investors to partake in an “Incrowdible” investment opportunity.
When last Crowdcube turned to the crowd to raise funding (in July 2014), the £1.6m of available equity was snapped up in just 16 minutes. This formed part of a larger round which also saw Balderton Capital pile in with £3.8m. Crowdcube then raised £6m in July 2015, in a round led by Numis – a leading UK stockbroker and corporate advisor. Numis was then singled out by Crowdcube as a key strategic partner, one which could help the platform to open up IPO investing to individual investors.
Darren Westlake, co-founder and CEO of Crowdcube, says that investor demand for backing British businesses through the platform has been “unwavering” in the wake of the nation’s decision to vote to leave the EU. He claimed that investment through the platform was up 18% on Crowdcube last week, despite what he called a “disappointing” referendum result.
Westlake also intimated that the proceeds of the impending fundraise may be used for the purposes of international expansion: “In just five short years we have firmly established our position as a global fintech pioneer and the UK’s dominant equity crowdfunding platform but we’re not stopping there. We’ve got ambitious plans for the future and we’re excited to be able to give the crowd the opportunity to join us on our next exciting phase of growth.”
Investors are being asked to register their interest now for early access to the round. Registered investors will be offered access on 18 July, with public access opening a day later.
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.