Seedrs and Crowdcube go head to head
As the UK equity crowdfunding platforms are named the country's most active investors, Startups.co.uk weighs up the success of the rival businesses...
Having both made major growth announcements in 2016, UK equity-based crowdfunding businesses Seedrs and Crowdcube have now been named the UK’s most active investors as the competition for the majority share of the crowdfunding market hots up.
Startups.co.uk brings you the latest news and delves a bit deeper into the two rival crowdfunding platforms and their successes to date…
Action point: Start your own crowdfunding campaign here
In the news
Today, a report from Beauhurst named Seedrs (founders pictured left) and Crowdcube as the most active investors in the country respectively, following an analysis of investments into non-listed UK companies.
The report, entitled The Deal, found that Seedrs and Crowdcube enabled more transactions than any other UK investors between January and December 2016, with Seedrs facilitating 134 deals and Crowdcube facilitating 124 in this time, making the two platforms responsible for 86% of all crowdfunding activity and 21% of equity investments.
Earlier in the past year, Seedrs, which claims to be “Europe’s number one equity crowdfunding platform”, issued plans in July 2016 to help the investment eco-system in the Benelux region with the launch of an Amsterdam office.
The launch – “building relationships for Benelux start-ups” – coincided with news that the UK Financial Conduct Authority (FCA) had granted Seedrs a ‘financial services passport’ which effectively meant that Seedrs can provide services anywhere in the EU.
Meanwhile Crowdcube, which claims to be the “world’s first” investment crowdfunding platform, unveiled plans to create a secondary liquidity market with the intention to prevent shareholders “being locked-in” and to “accelerate potential investor returns”, with the ultimate aim to “encourage further investment in British businesses”.
Crowdcube has also said it will be launching a series of products and services to help businesses manage investors “more efficiently”, and has also revealed it will be broadening its portfolio to include more venture and growth-stage companies.
Additionally, the business is currently inviting investors to register for early access to its own £5m funding round; with £50m already received in expressions of interest.
Seedrs and Crowdcube: Head to head
Given that Seedrs and Crowdcube have now been recognised as the UK’s most active investors, and both argue that their respective platforms are best for investors and start-ups, we’ve decided to take a closer look.
We’ve weighed up some of the key statistics to see how the two crowdfunding platforms compare. Which platform is best for business? That’s for you to decide…
|Launched: July 2012||February 2011|
|Founders: Jeff Lynn and Carlos Silva||Darren Westlake and Luke Lang|
|HQ: London (has offices in Lisbon and New York)||Exeter (has offices in London and Spain)|
|Proposition: FCA-regulated – and the first platform to receive FCA-approval – equity-based crowdfunding platform. It allows investors to back anything from £10 or €10 into “businesses they believe in” – it offers three campaigns; equity, funds and convertible loans.||FCA-regulated, equity-based crowdfunding platform. Claims to give entrepreneurs “more control and access to more investors”. Also offers a mini-bond scheme whereby companies can raise money by offering investors a fixed return per annum.|
|Focus: Idea-stage start-ups through to publicly-listed companies. 30% have been early-stage, 34% start-up, and 36% growth.||Start-ups through to growth-stage businesses. 46% have been early-stage, 28% start-ups, and 26% growth.|
|External funds raised: Over £13m||Over £12.8m|
|Key backers: Woodford Patient Capital Trust, Augmentum Capital, Faber Ventures||Balderton Capital, Draper Esprit, Numis|
Advisors: Includes tennis ace Andy Murray, Zopa co-founder James Alexander, and TechCrunch editor Mike Butcher
|Includes Draper Esprit CEO Simon Cook, Draper Associates founder Tim Draper, and Numis CEO and founder Oliver Hemsley|
Deal structure: Operates a nominee structure whereby investors hold equity interest but Seedrs has control over voting and direction power over the group of of shares held by all investors as their nominee. Seedrs claims this structure allows it to negotiate certain protections for investors such as anti-dilution.
|Investors hold a direct equity interest in a company subject to the rights and risks of any other minority investor. Crowdcube also offers a nominee structure, which it launched in February 2015 when JustPark used the platform to raise £3.7m.|
Fees: Tiered success fee system – 6% on first £150,000 raised, 4% fee for funds after first £150,000 up to £500,000, 2% fee for everything raised over £500,000.
|7% fee for successful raises (excl. VAT)|
|No. of investors: Not publicly disclosed||In excess of 340,000|
|Total amount raised for businesses: Over £190m (February 2017)||Over £212m (February 2017)|
|No. of raises: Over 460 (February 2017)||481 (January 2017)|
|Largest fundraising: Chapel Down (£3.95m)||BrewDog (£10m)|
|Average no. of investors per raise: 189||225|
|Top sectors: E-commerce, tech, and retail||Tech, internet companies, and food & drink|
|Exits: None so far||Three – E-Car Club, Camden Town Brewery and Wool and the Gang|
To find out more about crowdfunding or to find out more about Seedrs and Crowdcube and how they work, click here.