Rampant Demand for First Listed Company to Turn to Equity Crowdfunding

By AltFi on 6th October 2014

Equity Crowdfunding

The largest equity crowdfunding campaign in history closed its doors last Wednesday with £3,953,819 in the pot.

Rampant Demand for First Listed Company to Turn to Equity Crowdfunding

Chapel Down made the headlines in early September by becoming the first listed-company to attempt an equity crowdfunding campaign – via ascendant UK platform Seedrs. As was perhaps to be expected, the fundraise has been an unprecedented success. Chapel Down had initially sought to raise £1,667,506 – and ultimately topped that total by over £2m. The excess money piled into the project has driven up the equity share on offer from 6.48% to 14.11%.

The near £4m is clearly the largest amount ever raised via an equity crowdfunding platform. Leading German equity-based site Companisto claimed to have hosted the sector’s record campaign in early September, when Weissenhaus Grand Village Resort and Spa completed a fundraise of €3,450,615. Although the deal was actually structured as a subordinated profit participating loan, the amount itself qualified as the biggest amount ever raised by a typically equity-focused platform. But now the Chapel Down deal has blown that figure away.

There are two clear factors at play behind the success of the Seedrs campaign. The first is that Chapel Down is listed on the ICAP Securities & Derivatives Exchange. That means that contributors to the £4m total have a ready-made exit route in place. They’ll be able to trade their newly acquired shares on the ICAP exchange – an almost singularly unique luxury within the world of equity crowdfunding. The fact that the winemaker is a thriving and profitable company must have gone some way to swaying the minds of Seedrs’ investors too. Chapel Down is an established business, but it is also a high-growth business – the type of company that equity crowdfunding investors rarely get the chance to buy into. 

Jeff Lynn, CEO of the Seedrs platform, weighed in:

“Equity crowdfunding has tremendous potential, and when done in a professional and serious way, it can apply to a wide range of businesses -- including well-established listed companies.  By turning to Seedrs, Chapel Down has opened their door much wider, to welcome new, smaller shareholders who love their products, through to major corporate investors who know a great investment opportunity when they see it. And with EIS giving individual investors 30% of their investment right back as a reduced income tax bill, it is no surprise that this crowdfunding campaign has established a new world record.” 

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