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Crowdcube [Annual Review 2020]
Finance and Risk Capital
Impact for scaleups
793
Companies backed
21%
Follow-on investments
46%
Investments outside of London
56
Growth-stage investments
Key sectors
Online equity crowdfunding platforms, on which businesses pitch to receive investment, are becoming a conduit for finance among seed, early-stage and scaling businesses, bridging the gap from family and friends funding rounds and later, larger institutional rounds. On average, investors have five businesses in their portfolio. Institutionalisation of equity-based crowdfunding continues as VC firms, professional and retail investors co-invest on the platforms. Crowdcube invests in UK companies and has offices in Exeter and London.
Crowdcube typically invests between £250,000-£1m, with funding available as equity investment or mini-bonds. There were 56 growth stage investments made into UK companies since 2013 raising a total of £224m. During the period of January 2013 to June 2020, the fund has provided follow-on investments for 211 of the 793 UK companies. Two of its most popular fundraising campaigns of all time – for what3words and Moneybox – have been held during the Covid-19 pandemic.
Notable scaleups to have used the Crowdcube platform include BrewDog (this includes two debt funding deals totaling £12.3m), Monzo (which raised £20m via crowdfunding in December 2018) and Revolut. Popular sectors include food & beverages; consumer goods; fintech; and consumer internet. Over 46% (365) of the companies raising investment are based outside of London.
The platform provides companies that raise funds via the platform with access to a help centre and a campaigns team, access to a network of founders, and support with marketing and investor relations. The company has launched a Direct Community Offer, a secondary sales product that enables later-stage businesses to provide early investors with an exit while giving new investors a chance to invest.
In October 2020, Crowdcube announced its plan to merge with Seedrs. The deal is subject to approval from the Competition and Markets Authority, the FCA as well as shareholders.
