Match made in Heaven? A brief history of Seedrs and Crowdcube

By Aisling Finn on Monday 22 February 2021

Alternative Lending

The two most prominent crowdfunding platforms have been on the scene for the best part of a decade, but has it all been plain sailing?

Match made in Heaven? A brief history of Seedrs and Crowdcube
Image source: Darren Westlake and Jeff Kelisky.

 

The world of fintech was shocked when back in October when the two biggest crowdfunding platforms announced that they were to merge.

Crowdcube and Seedrs are undoubtedly two of the largest crowdfunding platforms, not just in the UK, but in the world and, in turn, have been home to some of the biggest equity crowdfunding campaigns in history.

The two are even among the first fintechs that AltFi wrote about, seven and a half years ago all the way back in 2013!

So come with us on this journey as we travel back in time and up to the present day to delve into the history of Crowdcube and Seedrs.

Back to where it all began...

Crowdcube first burst onto the scene back in 2011, with Seedrs following suit just a year later in 2012. 

Darren Westlake and Luke Lang took up CEO and CMO’s roles respectively when they first set down the roots for Crowdcube in Exeter in 2011.

Seedrs was originally an MBA project for founders Jeff Lynn and Carlos Silva at the Saïd Business School at the University of Oxford.

In March 2012, Seedrs and its founders made their mark after raising £1m from VC firm Draper Esprit, using the cash to become the first equity crowdfunding platform to gain accreditation from the Financial Conduct Authority just two months later. 

By July 2012, Seedrs had officially launched to the public, with users being able to put up as little as £10 to invest in companies.

Crowdcube received its accreditation from the FCA in February 2013, just shy of a year after Seedrs, but would quickly play catch up.

Picking up steam

Both Seedrs and Crowdcube began to attract increasingly large hordes of investors for increasingly large companies, helped along by the platforms’ own fundraising. 

Crowdcube received a boost from Balderton Capital to the tune of £3.8m in 2014, with the crowdfunding platform making up another £1.2m for the £5m round by using its own platform and raising the cash in just 16 minutes.

In 2015, Seedrs signed up tennis player Andy Murray to its advisory board after the tennis ace had previously used the platform to invest himself.

Soon after, Seedrs closed a £10m funding round, with £2.5m being raised on its own platform.

Seedrs also became the first equity crowdfunding platform to host an IPO, when cloud-based accounting software FreeAgent chose to list on AIM in November 2016.

Crowdcube was soon attracting the likes of digital banking service Revolut, Mexican fast-food chain Chilango and job advert search engine Adzuna, all of whom raised upwards of £1m on the platform.

In another first for Seedrs, the fintech became the first equity crowdfunding platform to launch its own secondary share market, allowing investors to buy and sell shares in unlisted companies in June 2017. 

To the moon

Crowdfunding received its biggest boost to date in December 2018 when new digital challenger bank on the block Monzo decided to launch its own campaign on Crowdcube.

The round, which remains the largest crowdfunding campaign in history, saw over 36,000 investors pump £20m into the bank. 

Monzo’s infamous campaign saw the cash raised in just over two days and firmly cemented its position as one of the first fintech unicorns to have come out of the UK fintech scene. 

Since then, Crowdcube has been home to the likes of Moneybox, which raised £7m from nearly 17,000 investors in July 2020, and Freetrade, which closed its heavily overfunded campaign having raised over £7m from almost 6,000 investors. 

While Seedrs has played host to the likes of Revolut, which launched a £4m crowdfunding campaign that saw over £17m pledged before the campaign had even gone live, and money management app Snoop, which raised over £10m on the platform in November 2020. 

When worlds collide

Fast forward to the present day…

In October 2020, Seedrs and Crowdcube made the shock announcement that the two crowdfunding platforms were to merge.

To date, over £2bn has been raised across both platforms, with the merger to be structured more like an acquisition of Seedrs by Crowdcube and for the new company to take a different route into equity crowdfunding by accommodating larger private equity-level deals.

Following the news of the merger, speculations began flying around about the health of the two businesses, with Seedrs publishing its not-so-rosy results no more than a day after.

Losses at the firm widened to £4.7m as Covid-19 caused “material uncertainty” over the company’s ability to continue its operations. 

Despite the dip, Seedrs saw investments through its platform top £293m in 2020, hitting a milestone of £1bn invested to date on Christmas Day.

Hitting another bump in the road, the merger was called into question by the Competition and Markets Authority (CMA) over fears the deal would hamper competition, a claim both platforms deny and say that they would be forced to close if the merger falls through.

It’s still unknown whether or not the Seedrs Crowdcube merger will go ahead, although for the sake of fintech funding you would want it to.

In nearly a decade on the scene and over £2bn invested across both platforms, there’s no doubt that both Seedrs and Crowdcube changed the way fintech and other startups around the world were funded. 

Here’s to the next decade! 

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