By Oliver Smith on Thursday 6 May 2021
“A big part of the future of our business,” CEO and co-founder Darren Westlake tells AltFi.
Crowdcube is today launching a brand-new secondary marketplace, and extending an invite to all high-growth European startups to come and use it.
Called Cubex, the new marketplace has already been used to facilitate over £16m in secondary share sales for fintechs like Freetrade and Revolut, but is now being opened-up for non-Crowdcube startups to use.
“Our aim is to have a European marketplace that allows venture-backed and high-growth companies from all over Europe to be able to trade their shares,” Crowdcube’s CEO and co-founder Darren Westlake told AltFi.
“This has been in-demand from companies and from investors for years.”
It could be a huge potential new revenue stream for Crowdcube and the companies, with Westlake saying that the buyer and seller in a trade would both be charged a fee for trading their shares.
“We charge the investor 1.5 per cent, and then we'll charge the seller a small percentage as well, depending on the type of transaction. It's likely to be a similar kind of fee on both sides,” the CEO added.
“I think that [Cubex] will be the future of our business... a big part of the future of our business.”
“The idea is to really focus on Crowdcube becoming a marketplace, and enabling shares to be traded of all different kinds.”
To kick off demand, Westlake said Cubex has built a database of private European high-growth startups where Crowdcube customers can register their interest in buying or selling equity.
With that data, Cubex hopes to be able to demonstrate where there is enough liquidity for a company to offer a secondary market sale through its platform, with pricing based on recent valuation data plus market demand.
It’ll then be up to those companies to decide whether to pursue a secondary sale, but returns could be lucrative.
Freetrade’s recent secondary share sale, which used Cubex technology, saw some early Crowdcube investors see returns of up to 47x (4,670 per cent), with six becoming millionaires.
Certainly, there are many Monzo, Revolut and Curve shareholders out there who will be hoping for a similar return, maybe now sooner rather than later.
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