Back in October, UK-based equity crowdfunding platform, Seedrs, announced plans to expand in the U.S. in early 2016.
The website declared one year ago its intent broaden its investment crowdfunding platform into the US with the acquisition of US-based Junction Investments. Junction, at least initially, had targeted film finance as a focus.
Now, Seedrs CEO, Jeff Lynn, is ready to share details about the upcoming expansion. During his interview with Business Insider at the Fintech Connect Live conference in London this week, Lynn explained:
“We think that’s a very exciting opportunity. It’s a bit of a counterintuitive one, normally it’s Europeans investing in Silicon Valley, but actually there’s a lot to be said for Europe. Data we have seen is surprising. What it’s essentially saying is that European exits, while smaller, tend to be more profitable because far less capital has been invested in the company to get them to that point. It’s easy to say, ‘oh we don’t have the $10 billion companies, we don’t have a Google’ etc. but actually we’ve built a hell of a lot of £500 million and £100 million businesses. Often they’ve been done with a quarter of the capital that an American company would need, so early investors are actually doing really well out of it.”
Although Seedrs is prepared for the expansion, Lynn admitted he is still pretty cautious about taking on the U.S. market:
“We’re conscious that a lot of European businesses have tried to take on the US and sort of floundered.” Seedrs is partnering with US businesses to do things like compliance to help manage to push. One of the things we’ve learned from the very beginning is talk is cheap and you never quite know until people move their wallets.
“There is a lot of enthusiasm and interest. I’ll be interested to see how much that converts to investment and then we’ll pivot our strategy and learn as much as we can. We learned a lot in early days here and I expect to learn a lot in early days in the US.”
Lynn also went on to explain the key strategy to selling European startups to the U.S.:
“The idea of facilitating cross-border investment flow across Europe is at the heart of what we do. And we’re already doing a lot of it, but quietly. About 20% of our investments are coming from outside of the UK right now. We have a significant number of investors and a rising number of deals coming from all over Europe. That’s where we’re really leaning in.”
In regards to Seedrs expanding to other countries in the future, Lynn added:
“The US is going to be a long-term thing. But Europe we see as a much short to medium term thing. We see the opportunity to build a significant presence across a number of European jurisdictions by the end of 2016.”