Crowdcube looks to tap into IPO market, taking on the likes of PrimaryBid

By Aisling Finn on Wednesday 2 June 2021

Savings and Investment

Community IPO will see Crowdcube tap into the public company market after over a decade of supporting private firms.

Crowdcube looks to tap into IPO market, taking on the likes of PrimaryBid
Image source: Darren Westlake/Crowdcube

Still reeling from its failed merger with fellow crowdfunding platform Seedrs, Crowdcube has been on a product launching offensive as of late. 

Early last month, the fintech launched a brand-new secondary marketplace, Cubex, and, yesterday, Crowdcube revealed its plans to launch its own IPO offering.

In an update sent to shareholders and seen by AltFi, CEO Darren Westlake wrote: “Despite all the fintech innovation of recent years, everyday investors are still getting left on the sidelines when it comes to Initial Public Offerings (IPOs) - missing out on a financial opportunity that’s usually only available to wealthy institutions. We want to change that.”

“We’ve democratised investment into private companies. Now, we want to do the same in the public markets by giving you, our community of investors, a way to invest in Europe’s most exciting businesses at the point of going public.”

Community IPO will allow retail investors to take part in the stock market debuts of Europe’s fintechs, just like PrimaryBid that facilitated the participation of retail investors in the IPOs of the likes of Deliveroo and PensionBee.

“We’ve been in the equity crowdfunding business for ten years now and that has moved to later and later stages. The raises we are seeing on our platform are becoming bigger and bigger and later and more mature,” Sam Lawson, VP of capital markets at Corwdcube told AltFi.

“Community IPO is a pretty natural extension of our product both in terms of brand and our current offering as, specifically our technology and our expertise,” he added.

Westlake added that the launch of Community IPO has been bolstered by the Lord Hill Review into the way companies list on the London Stock Exchange and that the end goal is for Crowdcube to become the go-to marketplace for investment in both private and public companies.

Following the Competition Markets Authority (CMA) throwing a wrench in its merger with Seedrs, Crowdcube also had a run-in with the Financial Ombudsman.

Last month, the crowdfunding platform was ordered to repay an investor £18,000 after a company that raised money on Crowdcube turned sour. 

Crowdcube strongly disagrees with the regulator’s opinion and said that, at the time, the company’s pitch passed its stringent due diligence process and that the Financial Ombudsman is unfairly singling the platform out. 

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