Investment app Hedgehog closes crowdfunding round at £1.56m

Fractional investing app Hedgehog does not have a “eureka” idea but the biggest win from its above-expected £1.56m crowdfunding raise is bringing in corporate expertise, says its co-founder.

Hedgehog has today (Monday) completed its Seedrs investment raise, raising £1.56m, more than 50 per cent than it had earmarked and ahead of schedule.

UK-based Hedgehog, which launched earlier this year, enticed investment from nearly 400 individuals across 27 different countries. 

There were several six-figure investments as part of the crowdfunding round, co-founder Rob Lamb told AltFi.

Lamb, who previously worked at Partners Group, said the funding round was not intended as a capital raise exercise per se, but an opportunity for earlier investors in Hedgehog to become shareholders in the fintech.

It was “more of a community building exercise”, he says.

Hedgehog, which now has a valuation of £21.96m, offered 5.34 per cent of its equity in the funding.

Lamb says “the biggest win” from the investment round is Hedgehog can now call on regulatory, and legal expertise from its shareholders on an ad hoc basis, expertise which would have been expensive if it came via employing staff full-time.

Lamb admits that Hedgehog (which had over 1,000 people on its waitlist before launch) is not a “eureka” idea but says making a success of the business is a big challenge.

He said: “Fractional investing as a concept is one that everyone understands and in different asset classes it has been done very successfully. 

“It hasn’t been done at scale and with great success in our space, in the private markets in real estate specifically., because it is such a difficult model to pull together.” 

Hedgehog offers easy access to $1.5bn of investment assets including warehouses, content studios, renewable energy infrastructure and more.

The company uses "tokenization" technology, underpinned by blockchain-based smart contracts, to offer digital tokens that are backed by income generated, directly or indirectly, by real world assets.

Through the app, users select from categories that are tailored to their goals. The investment process is all automated with a dashboard showing the user their investment portfolio.

The new funding will be used towards marketing and product development, which will include launching more investments and continuing to build the technology that brings the barriers to entry down, such as integrating the option to sell tokens and launching Hedgehog in new territories globally. 

Michael Ward, co-founder of Hedgehog, who previously worked at Goldman Sachs, added: “We are delighted with the results of the crowdfunding and pleased to be welcoming nearly 400 individuals as new shareholders.

"Having been self-funded by our co-founders to date, we deliberately crowdfunded our first ever round of external funding to build a high calibre shareholder community that understands the problem we are trying to solve.”