Capdesk – Seedrs Partnership Creates First Private Secondary Market for Shareholders and Employees in Europe
Seedrs, a top UK based investment crowdfunding platform, is unique in the fact it has created a viable secondary marketplace for private securities issued via the platform. By enabling investors to trade securities, Seedrs has addressed an important aspect of early-stage investing by enabling an element of liquidity beyond an M&A or public offering. While relatively small, the Seedrs Secondary Market continues to iterate, improve, and add features. Today, Seedrs is reporting 1800 trades during the month of May, surpassing £1 million for the first time since the marketplace was launched. Digital bank Revolut share sales topping the list for the most amount of shares listed and sold. To date, the Seedrs Secondary Market has enabled over £5.2 million traded in secondary transactions in more than 400 companies.
Simultaneously, Seedrs has announced a strategically important partnership with Capdesk, an equity management platform that creates a more robust platform for investors and issuers to seamlessly manage their securities, to enable firms not crowdfunded on the Seedrs platform to participate in the marketplace. Capdesk provides a holistic digitized portfolio management tool for investors while providing a single point of management for issuers to track shareholders while disseminating information and managing transfers. Now, all firms using Capdesk will be able to trade their securities.
The Seedrs – Capdesk partnership is described as “opening up liquidity to a wider group of private businesses and allowing investors to trade shares as freely as a public company.”
Seedrs states that as investor demand in private securities grows, the partnership with Capdesk will extend the breadth of private companies trading on the Seedrs Secondary Market. Most firms have moved to delay an initial public offering (IPO) as long as possible due to excessive cost and added compliance demands that harm firms in early/growth stages. Yet investors are still very interested in liquidity options. As private securities are historically an illiquid asset, a robust marketplace can benefit sellers as well as new investors.
From today, Capdesk-listed businesses in need of funds can directly list their shares on the Seedrs secondary market, while early investors or employees with vested options now have the choice to cash out early, according to Seedrs.
The inclusion of non-Seedrs crowdfunded firms participating in its Secondary Marketplace is a natural next step but may also completely transform the company beyond a primary issuance platform. While other investment crowdfunding platforms have attempted to launch a secondary market, both in the UK and in other markets, it appears that Seedrs is getting it right and innovating where others have struggled.
Jeff Kelisky, CEO at Seedrs, commented on the news:
“Our vision is to be the largest marketplace for private equity investment and to be an essential part of the investment lifecycle. Our secondary market delivers liquidity to a previously highly illiquid asset class and is already seeing great success as our May window shows. But, to make real change to private equity, we knew we needed to open up and integrate with other innovative fintech players. We welcome Capdesk to the fold and invite others to join them as we build out the ecosystem that serves businesses and makes trading for investors as easy, as trusted, and eventually as fast as a public market.”
Christian Gabriel, co-founder and CEO at Capdesk, explained that as the amount of IPOs have declined the amount of employees holding shares along with venture funding into private firms, has increased dramatically:
“This has been the paradox Capdesk was set up to solve. Capdesk helps +1,000 companies and +100,000 employees and investors manage their equity. With Capdesk technology and Seedrs network we are creating the first private secondary market for shareholders and employees in Europe. This is going to be huge.”