Darren Westlake and Jeff Kelisky.
Match made in Heaven? A brief history of Seedrs and Crowdcube
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?
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!
Back to where it all began...
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.
Picking up steam
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.
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.
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
The round, which remains the largest crowdfunding campaign in history, saw over 36,000 investors pump £20m into the bank.
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…
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.
Here’s to the next decade!