Investment crowdfunding platform Crowd2Fund is raising capital in a self-crowdfunding round seeking up to £1.2 million in an EIS approved offering. Shares in the company are being offered at a pre-money valuation of £35.8 million. Crowd2Fund says this round is in advance of a future Series A round raising £10 million.
Of note, Crowd2Fund reports that following this current raise, they are planning to use the remainder of their £12 million EIS allowance to conduct a Series A investment round to “pioneer the world’s first decentralized bank, combining the benefits of a challenger bank with P2P lending.”
Crowd2Fund plans to offer direct investing into entrepreneurs along with an AI automated investing system with deposit capabilities and full banking services.
This most recent round was originally revealed in September.
According to the offering page, about £225,000 has already been raised from 25 individual investors. The EIS qualification provides important material benefits for investors as tax benefits can reduce actual exposure while possibly removing any capital gains tax.
Crowd2Fund explains the EIS benefits as follows:
“For example, if you invest £10,000 in Crowd2Fund, you will potentially be eligible to receive up to £3,000 from HMRC in the form of tax relief, depending on your individual circumstance. Investors are sheltered from paying capital gains tax on any future returns and they could also be protected from losses, with up to £3,150 of loss relief. This means that their financial exposure to Crowd2Fund is potentially reduced to £3,850 while retaining the full £10,000 in equity.”
Crowd2Fund plans an ambitious growth trajectory. In a comment, Crowd2Fund states:
“… we can grow the business to be lending £210m per year to 2,628 hard-working entrepreneurs and value Crowd2Fund at £99m, based on £12.5m generated in revenue. We do however plan to go further than that, in line with our original forecasts and raise at least a further £20m after EIS to allow us to achieve the £1bn valuation which is eminently achievable with 30% UK market penetration – which is looking more and more achievable, due to the poor service offering from the larger competitors.”
Previous predictions of growth have not matched actual platform performance but Crowd2Fund is confident in its growth plans.
The funding round is apparently an extension of a round from earlier this year that was paused due to a delay in EIS authorisation.
Crowd2Fund is both a debt and equity platform that allows investors to back individual entrepreneurs. While many of the largest debt based platforms (P2P) have shifted to funds, Crowd2Fund continues to pursue a single investment platform where:
“investors control and choice over the investments they make. Businesses leverage this approach because having access to the community of investors helps their business grow and they can also reduce the cost of the finance.”
Crowd2Fund adds that it is expanding internationally via the UK Fintech bridge programme
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