John Goodall and Gray Stern launched their company, Landbay, with the help of Seedrs. Before their website was even live, Goodall and Stern were raising seed capital on the crowdfunding platform for their vision of mortgage finance. Their first funding round was for only £50,000 in SEIS eligible seed funding. The round closed in December of 2013 at £71,590 with a pre-money valuation of £616,667.
Jump forward three years and several crowdfunding rounds later, and Landbay, a peer to peer lending platform for secured property loans, has now financed over £42 million for hundreds of mortgages. Landbay has joined the highly respected UK P2PFA, received an investment from Zoopla and reported a £250 million wholesale funding line provided by a European asset management firm and a major bank. Landbay is now moving forward with a strategy of balancing retail investors and institutional money and ultimately securitization. These are a step stones to furthering growth as Landbay has captured traction as a niche player in the vibrant peer to peer lending market in the UK.
Landbay is, so far, a clear success in the investment crowdfunding sector. While there is no exit sign yet, smaller investors were able to participate at a very early stage with a team that possessed a solid skill set regarding the market they wanted to tackle. Last week Crowdfund Insider reached out to John Goodall, CEO of Landbay, to inquire about his decision to utilize crowdfunding as a strategic move to raise capital and to get an update on his P2P platform. His responses are below.
Crowdfund Insider: Why did you decide to use crowdfunding to raise capital?
John Goodall: We chose crowdfunding as we have found it to be an effective marketing channel to increase brand awareness and to build a network of users from day one, whilst of course raising capital! The nominee structure at Seedrs was particularly attractive and their team are on top of collaborative marketing efforts.
Crowdfund Insider: At what stage was your business at the time of your first funding round?
John Goodall: Our first funding round was before we had even launched the product. Many of our equity investors have been with us from day one and have been a great support both financially and in terms of feedback on our product.
Crowdfund Insider: How did that initial funding round impact your business?
John Goodall: The initial funding round helped to validate our idea. If you can get friends, family and even complete strangers to invest in your business, you know you’re doing something right! And of course, the capital was instrumental in getting us off the ground.
Crowdfund Insider: Were there any surprises (good or bad) in the process?
John Goodall: Not really to be honest. We planned our campaigns diligently and set ourselves realistic goals, and usually oversubscribed fundraising targets. I suppose it came as a welcome surprise when Andy Murray chose to invest in us via Seedrs!
Crowdfund Insider: How many additional funding rounds have you completed since your first one? What is the investor make up today?
John Goodall: 27% of our business has been funded via Seedrs. We’ve done five rounds since our first.
Crowdfund Insider: Do you have a strategy for an exit? How will investor capture gains?
John Goodall: We don’t have a set date for an exit or sale, but of course we will do what is right for our shareholders in terms of bringing them the best value for their investment. Our main focus at the moment is to build the healthy foundations for a sustainable business which will have both short term and long term success.
Crowdfund Insider: How is your business doing today?
John Goodall: Things are going really well at Landbay. It’s now been two years since our first loan completed, and we’ve lent a total of £42.78 million – in fact, we were 2015’s fastest growing peer-to-peer lending platform in the UK. We have won numerous awards and we’re looking forward to sustaining our growth over the remainder of 2016 with the launch of our partnership with Landbay shareholder Zoopla and our Innovative Finance ISA.
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