Equity Crowdfunding Pioneers, Crowdcube and Seedrs Announce Merger
As the world’s first investment crowdfunding platform, Crowdcube enables entrepreneurs to raise finance with the added benefit of being backed by their community.
For investors, Crowdcube provides a way to hand-pick a stake in an innovative business they believe in, that would traditionally have been restricted to professional investors. Since Crowdcube was founded in 2011, they have facilitated more than 1,120 successful raises.
With more than 900,000 members, a total of £1bn has invested on the platform to date.
Seedrs is a leading online investment platform.
It allows investors to buy and sell shares in private companies, and ambitious entrepreneurs to gain investment for their businesses, whilst building communities in the process. Since their launch, in 2012, Seedrs have facilitated over 1,140 deals, with nearly £1 billion invested on the platform.
Seedrs is backed by leading European institutional investors as well as over 4,600 of its own customers.
The two fintech pioneers have agreed to join forces to take on the UK’s £12bn equity funding market. So far, 1,500 companies have raised finance through Crowdcube and Seedrs, with £2 billion invested into campaigns.
“We are both fintech pioneers that have challenged the landscape of capital raising in Europe, building marketplaces for private equity investment. We believe that you need to be a player of greater scale to serve companies and the investors who support them. Now is the right time to bring our strengths together, in order to meet our common mission to deliver a step change in the accessibility and efficiency within private company investing. This will not only create value for ambitious companies and their investors, but also for the economies and communities that they serve. As we look to the future, we’ll be well positioned to build on our combined strengths and create a powerful global private equity marketplace that will transform the ecosystem of equity finance globally.“Jeff Kelisky, CEO of Seedrs
By joining forces, thousands of ambitious fast-growth businesses, and millions of investors, will be able to benefit from the best expertise, services and returns offered by both investment platforms.
On completion, Jeff Kelisky, Seedrs’ CEO, will now serve as the new CEO of the combined company. Darren Westlake, Crowdcube’s CEO and Co-Founder, will serve as the Executive Chairman. The new management team will include key leaders from both businesses.
The new combined company aims to deliver new innovations and products that will make it significantly easier and more affordable for ambitious businesses to raise growth finance. Investors will have an even greater selection of investment opportunities with richer investment tools.
The two leading investment platforms play a key role in Europe’s fast growing equity funding ecosystem, both through the success of primary raises through their platforms and the scaling of their secondary offerings, and wider marketplace initiatives.
They have both reached significant milestones in the last 6 months. Crowdcube had successful campaigns with what3words and Moneybox (two of the most popular equity crowdfund campaigns ever) and Seedrs saw over £1million of private company shares traded on the Seedrs secondary market, in a single month.
The merger will be structured as an acquisition, by Crowdcube.
Existing Crowdcube shareholders, and option holders, will own 60% of the combined company and existing Seedrs shareholders, and option holders, will own 40% of the combined company. The merger ratio reflects the approximate valuations of the two companies, based on each of their most recent fundraising rounds.
Following completion of the merger, the companies will work together to define how they will combine their teams, customers, brands, services and technologies.
The transaction is subject to approval by the UK Competition and Markets Authority (CMA), the Financial Conduct Authority (FCA), shareholders of the two companies and the sanction of the Court. The transaction is expected to be completed in late 2020 / early 2021.
“Equity crowdfunding has redefined how many ambitious businesses raise investment and engage with their customers. Today’s agreement is an incredibly exciting milestone that will benefit high growth businesses, their investors who believe in their vision and the wider entrepreneurial ecosystem that supports them. Together with Seedrs, we can accelerate plans to further expand in the UK and overseas, launch innovative new products and improve our customers’ experience.“Darren Westlake, CEO and co-founder of Crowdcube