With Crowdcube merger scuppered, Seedrs pre-announces new funding round

Just hours after the Competition and Markets Authority (CMA) threw a wrench in Seedrs and Crowdcube’s plan to merge, both platforms have agreed to terminate the merger.

“We're obviously disappointed with the CMA's findings but we have taken the decision to terminate the proposed acquisition,” said Crowdcube CEO and co-founder Darren Westlake.

Seedrs CEO Jeff Kelisky echoed Westlake’s comments and added that “we had prepared for this possibility, and we’re pleased to announce that we have agreed a new funding round for the business.”

While Kelisky didn’t reveal any details about this round’s size, he added that more details would be announced “very shortly”.

“Given the strength of the business’s recent performance, we will be able to use this round to return to our pursuit of major growth initiatives.”

On Crowdcube’s side Westlake added that the crowdfunding platform had seen two consecutive quarters of profitability in 2020, along with record revenue, and that he expects the business to be profitable again in the first half of 2021.

In their evidence submitted to the CMA as part of the merger approval, the two platforms said they faced closure unless the deal was greenlighted.

As part of the investigation, however, the CMA found that the collapse of one or both firms would be unlikely if the merger were not to go ahead and that “both parties will continue to compete to offer services for all types of SME customers.”

Indeed with fresh funding now on the cards and profitability ahead, it seems increasingly likely that both Seedrs and Crowdcube will remain among the largest equity crowdfunding platforms in Europe for the foreseeable future.