Founding members of the UK Crowdfunding Association are first to consolidate in the investment-based crowdfunding sector.
The UK’s first crowdfunding platform within the social enterprise sector Buzzbnk is to merge with Trillion Fund - the renewable energy crowdfunding platform whose biggest shareholder is Vivienne Westwood, the fashion designer.
After an explosion in the number of alternative finance platforms over the past few years, many commentators have predicted a period of consolidation for the industry involving several platform mergers and takeovers – could this just be the first of many that we are going to see over the coming months?
Trillion Fund was founded in 2011 to enable opportunities for people to profit from clean energy and help finance the extortionate $1 trillion a year that the UN has reported is necessary to halt global warming by more than 2 degrees. The company’s initial marketing platform was launched in June 2012 and in June of this year, AltFi news reported that Trillion Fund had launched its Peer to Peer lending platform. To date the company has aided more than 20 projects in meeting their funding targets. Current projects include a £1.25m loan for E2Energy to fund the construction and installation of new wind turbines across the UK.
The crowdfunding website Buzzbnk introduces social entrepreneurs seeking start-up or growth capital to like-minded people, eager to participate in revolutionary methods of funding social change. Since its inception in 2011 Buzzbnk has maintained Chairman Michael Norton’s (OBE) vision of empowering “positive people to back bright ideas” by raising funding for more than 100 projects. The company is more than 50% owned by charities and foundations within the UK and holds a social purpose mandate to support the social enterprise, social investment and charitable sector. Shareholders include The Esmée Fairbairn Foundation, The Wates Foundation, The Centre for Innovation in Voluntary Action, The Lloyd Fund and The Tudor Trust.
The merger between the two platforms is currently pending full shareholder approval, but subject to that approval, the combined operation is due to commence on 1st September 2014. Chief Executive of Trillion Fund Julia Groves will be leading the new venture with Theresa Burton, chief executive and co-founder of Buzzbnk, becoming chief information officer and deputy chief executive.
The combined entity will become the largest social crowdfunding platform in the UK with an estimated 14,000 users. Both social and sustainable projects will have access to prospective funding of up to £500 million and perhaps a half a million crowdfunders by the end of 2017.
Julia Groves stated:
“By joining forces, Trillion Fund and Buzzbnk will create a crowdfunding resource of real scale. Social investing is just people deciding where they want to put their money so that they can make a good return, but not at the expense of other people or the planet. We will create investment opportunities that previously would have been the preserve of the rich, starting with this country’s clean energy infrastructure.”
Theresa Burton commented:
“This deal creates a platform of complementary strengths. Together, we can provide early stage capital to start-up social enterprises. We can support those worthwhile projects that may be struggling for lack of capital. Organisations that can build a crowd of supporters and advocate around them will be stronger, more resilient and more successful.”
The social funding platform will provide projects with the opportunity to raise both equity and debt finance from the crowd as well as making alternative investments accessible for those that wish to make a profit and a difference.