Worlds first equity crowdfunding platform Crowdcube, is celebrating their third birthday this month. Since their launch in February 2011, the company has raised over £19.9 million for 103 start-ups as well as small and growing businesses. These companies are set to boost the British economy with the creation of an estimated 1900 new jobs over the next three years. These fast-growth businesses are contributing to Britain’s exports, supporting the Chancellor’s challenge to double Britain’s exports to £1 trillion by the end of the year. In many respect the United Kingdom has led the world with the new innovation of investment crowdfunding.
“When Luke and I founded Crowdcube equity crowdfunding didn’t exist; now it’s all over the media and is a mainstream source of capital for many businesses. In 2013 we grew 562% on the year before, securing over £12 million for 54 deals which is phenomenal. With over 100 applying to us to seek finance each month, it is clear that Britain is not short of entrepreneurial spirit.”
Crowdcube has established multiple ‘firsts’ including:
- It was the world’s first crowdfunding platform to offer shares to investors.
- Funding now totals nearly £20 million with over 60,000 registered members, making it the biggest equity crowdfunding website on the planet.
- In September 2013 Kevin McCloud’s Hab Housing broke the world record for equity crowdfunding investment with 649 people putting in £1.95 million.
- Crowdcube was the first to sign up an international partner and now has a presence in seven countries including: Brazil, Sweden, Dubai, Poland, Italy, Spain and New Zealand.
- January 2014 saw the launch of the first managed venture fund for crowdfunded equity investments.
- 25% are female, which contrasts strongly with the 3% of women who use traditional angel networks.
- 53% want some kind of role in the business they invest in. Most work in sales and marketing or finance and so have business expertise to offer the entrepreneur.
- 40% of members see themselves as both investor and entrepreneur, again showing the business insight available.
- 65% of investors live in London.
Examples of popular funding sectors and ones to watch include:
- gamesGRABR is a social network that gives its users the ability to discover, collect and play the games they love. The pitch overfunded, securing £174k from 73 investors for 8% equity.
- Fantoo raised almost £450,000 to launch its AI-driven corporate email solution that uses machine-learning to anticipate and automatically categorise a user’s email, presenting it as an optional tapestry of images.
- OVIVO, a Mobile Virtual Network Operator (MVNO) uses Vodafone’s UK network to provide competitive mobile phone packages that are subsidised by advertising and m-commerce. It secured its second round of funding in August 2013, overfunding by 29% to raise £418k.
- Solarmass has developed voltaic technology to make the lightest, most powerful solar panel. The Ergosun roof tile is a standard concrete/clay tile with Solarmass’s solar cell technology applied to the surface; this doesn’t change the appearance of the tile or the weathering performance. It overfunded by 20% to raise £120k from 97 investors for 12% equity.
- Disarmco secured £148k from 126 investors to finalise development of a product which enables the disposal of landmines in a simple, cost effective and environmentally friendly way.
- E-Car Club is the first electric-only car club that raised £100k in 2013 and has now gone on to secure £0.5 million of capital from an investment fund backed by Centrica plc, busting the myth that crowdfunded businesses limit future investment.
Food, drink and hospitality
- Pizza Rosso secured £440,000 (57% overfunded) from 121 investors to launch a new chain of Italian-style quick service pizzerias. It foresees the potential to open 12 outlets in five years.
- Kamm & Sons raised £180k in 2011 and £325k in 2013 to expand sales of its ginseng cocktail spirit.
- The Rushmore Group, owner of three members’ clubs in London, has used Crowdcube three times since November 2011 raising a total of £2 million.
- East End Manufacturing champions ‘Made in Britain’ by manufacturing garments in London for the likes of Debenhams and House of Fraser. It has raised £400,000 over two funding rounds. The business has moved to new premises in the East End and is expanding to sell its own brand of fashion through Asos.com (which sells in 237 countries and is about to launch in China).
- Front Up Rugby is a popular UK rugby fashion brand backed by a growing number of professional players and a team of experienced retailers. It raised £123k in 2012 and secured a second round of £100k in Sept 2013.
- Escape the City raised £600k and turned down two VCs to use Crowdcube. It helps those who want to escape existing careers to find exciting new jobs, start their own businesses, and go on big adventures.
- Lawbite, an online legal service providing simple contracts for small companies, acquired nearly £400,000.
Crowdcube’s disruptive model allows entrepreneurs to showcase their investment opportunity online and bypass the traditional business angel, venture capital or bank route, giving them more control and greater access to more investors. Crowdcube is regulated by the British Financial Conduct Authority (FCA).