All earlier self-funding rounds by the platforms have proved to be popular with investors who are eager to snap up the opportunity to get their share of the equity crowdfunding industry. All platforms have successfully reached their targets, in some cases substantially over subscribing within minutes. This raise by Crowdcube looks set to continue the trend having already received over £50m in expressions of interest from potential investors.
The prospectus has not yet been launched, but the platform claims the first £20m of interest came through in just six hours and highlights an exceptional and unprecedented demand for investing in Crowdcube.
Crowdcube is currently inviting investors to register for early access to its upcoming round and seeks to raise more than £5m. The offer will be opened to pre-registered investors on Monday at mid-day.
This will be the first time that Crowdcube has raised funds with a prospectus, which is required to issue shares to the crowd above the limit set by EU rules.
To date, the company has raised a total of £12.8m after attracting investment from over 500 crowd investors, as well as leading venture capital firms Balderton Capital and Draper Esprit and city stockbroker Numis Securities.
Crowdcube’s earlier funding rounds:
Initially bootstrapped with seed funding from friends and family, Crowdcube has gone on to have four rounds of finance which include:
£319,000 was raised in December 2011 – the first official raise on its own platform which funded in 10 days.
£1.5m was invested in May 2013 by 262 investors in the company’s second round of crowd investment. The pitch hit its target in three days.
£5m was raised in July 2014 – another 145 crowd investors contributed £1.2m alongside Europe’s leading VC firm Balderton Capital. The raise closed in 16 minutes.
In July 2015, Crowdcube led its first venture and institutional investment round to the tune of £6m. Investors were leading UK stockbroker and corporate advisor Numis Securities, Silicon Valley investor Tim Draper and London-based venture capital firm Draper Esprit and existing backer Balderton Capital.
The founders drew inspiration for the platform from the popular TV show, Dragon’s Den. They wanted to develop a way for ordinary people to become armchair dragons, but rather than finding one high net worth individual to invest £50,000 in a business, they wanted to make it easier for 1,000 people to invest £50 each.
The site launched targeting ‘Anyone with a little bit of disposable income and a single typical investment amount of around £50’.
Since then the site has amassed a crowd of over 285,000 members, which have invested more than £160m in over 400 raises, with £110m being raised since the start of 2015. The platform currently employs over 80 people.
Crowdcube says “As one of the world’s first investment crowdfunding platforms, Crowdcube enables entrepreneurs to bypass the traditional business angel, venture capital or bank finance routes, giving them more control and access to more investors.”
Recently the platform rolled out a new product in the form of a mini-bond for established companies, giving investors the option of a fixed return investment.