Losses at Seedrs widen to £4.7m as it issues "going concern" warning over Covid-19

By John Reynolds on Tuesday 6 October 2020

Alternative Lending

Seedrs, which yesterday announced a merger with rival Crowdcube, said revenues were up to £4.3m and said its performance had been "very encouraging".

Losses at Seedrs widen to £4.7m as it issues
Image source: Darren Westlake/Seedrs.

Seedrs, which yesterday announced a merger with rival crowdfunding platform Crowdcube, has reported a loss of £4.7m in the year ending December 2019 and has said Covid-19 has caused a “material uncertainty” which “may cast significant doubt on the group’s ability to continue as a going concern”.

The £4.7m loss marks a bigger loss than the £4m Seedrs lost the year before.

Revenues, though, were up to £4.3m from £3.2m the year before and Seedrs said the performance had “been very encouraging” citing “record levels of investment and fundraising activity”.

Included in the losses were over £4m in operating costs and over £1m in investing activities.

“The group completed a fundraising round of £4.4million in the second half of the year in order to accelerate investment in the group’s research and development of new investment services and platform features while ensuring the group’s cost base follows a path to further efficiency and scalability to meet the group’s primary objectives,” the report says.

On the impact of Covid-19, Seedrs issued a “going concern" warning.

It said: “Should the present Covid-19 pandemic situation have an adverse business impact (which is currently unknown), the group may be unable to meet its objectives and to discharge its liabilities as they fall due and, as a result, the directors have concluded that these circumstances represent a material uncertainty that may cast significant doubt on the group’s ability to continue as a growing concern.”

The group, though, said Brexit was not a “material risk” to its business strategy.

Seedrs and Crowdcube, who say £2bn has been raised across their combined platforms since 2011, announced details of their planned merger yesterday.

Existing shareholders in Crowdcube, which is also loss-making, will own 60 per cent of the combined company, and existing Seedrs shareholders and will own 40 per cent.

The two firms are hinting at a bold new strategy to include marketplace access to larger private equity-level deals for investors.

Jeff Kelisky, Seedrs’ CEO, will serve as CEO of the combined company, and Darren Westlake, Crowdcube’sCEO and co-founder, will serve as Executive Chairman.

Kelisky says the firms are well-positioned to "create a powerful global private equity marketplace that will transform the ecosystem of equity finance globally.”

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