Equity crowdfunding now the second most active funding source in the UK

Beauhurst says Seedrs was the "top seed stage investor" and Crowdcube was "the single most prolific investor in high-growth companies" in 2015

Equity-based crowdfunding is now the second most active funder type in the UK, far ahead of angel networks and private investment vehicles, data firm Beauhurst has revealed.

Published in its report The Deal 2015/16, which analysed investments investments and deals in the UK’s high-growth companies since 2011, Beauhurst said that over £4.9bn was invested into UK start-ups and scale-ups over 2015 across 4,629 deals – yet 1,640 of these deals were actually unannounced (dubbed “secret deals”).

The report suggested that crowdfunding platform Seedrs was the “top seed stage investor” in 2015 with 98 seed-stage deals while its competitor Crowdcube was the “single most prolific investor in high-growth companies” with 136 transactions.

Crowdcube was also ranked as the top venture-stage investor in 2015 with 40 venture-stage deals, above the London Co-Investment Fund and Angels Den, while Seedrs ranked above Crowdcube in the index of the UK’s top technology investors.

What’s more, crowdfunding platforms are also beginning to take a bite out of the growth-stage market; Crowdcube was ranked in joint third position alongside Index Ventures, Balderton, and Woodford Investment Management, as a top growth-stage investor in 2015 with eight deals each.

Out of all the various investor types – such as angel and VC – equity crowdfunding was the only investor type whose deal numbers increased by a significant amount (45%) between 2014 and 2015. Crowdfunding was also found to “dominate” seed-stage rounds with 228 seed-stage deals in 2015; compared to 116 private equity deals and 114 deals led by private investment vehicles.

Beauhurst CEO, Toby Austin, commented:

“Last year was another record year for equity investment into the UK’s fast-growth companies. Crowdfunding’s impact is now really being felt, particularly on institutional seed-stage investors who almost disappeared from the market in October to December 2014.

“We expect that these platforms have yet to reach their full potential, despite the controversy that they continue to attract.”

Learn more about crowdfunding and whether you should raise finance via crowdfunding here.

 

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