The move comes as the latest of Crowdcube’s multiple efforts to expand internationally. The platform will soon open in New Zealand and Spain, and has signed partnership agreements in seven other countries. The joint venture is a focal feature of Crowdcube’s overseas expansion.
“To successfully expand internationally it’s vital to have a strong presence at a local level, and this is why joint venture partnerships are an important aspect of our strategy for long term success,” explained Danny Westlake, co-founder and CEO. “People who understand the local culture and are already immersed in the start-up and investment scene are critical for success: it is not sufficient simply to build a website and hope that people come – we all know it takes more than that.”
The move will be financed with £1.5 million growth capital raised in just three days earlier in the year through crowdcube.com itself. Crowdcube will be hoping their Italian operation can emulate the success enjoyed by the platform in the UK.
Equity Crowdfunding was legalized in Italy from July 13th 2013. Italy thus became the first country in the world to implement laws which support crowdfunding for equity. The Crowdfuture conference – which occurred late October 2013 – determined that the number of Italian platforms has almost tripled in the last year, and in that time half of the total amount raised in the history of Italian crowdfunding was generated (11 million Euros).
But the crowdfunding scene in Italy also presents a number of issues. The number of platforms currently far outstrips the amount of suitable projects, and rejection rate is very high. Furthermore, the crowdfunding market still faces challenges in the form of overcoming social norms and cultural barriers.
Crowdcube’s new partner will be key in helping Crowdcube navigate these concerns. Xandas invest in and subsequently lend expertise seed and early stage businesses. They have a deep understanding of the status quo relating to start-ups and investors.
Crowdcube expects to sign further agreements in 2014 and is already seeking potential partners in France, Germany, Canada and the USA.