Securities offerings via crowdfunding platforms in the UK had a gangbuster year, according to a report. In total, £332 million was raised led by the two dominant platforms – Crowdcube and Seedrs – that hoover up over 90% of the offerings.
A report by the independent data provider, Equity Crowd Expert, notes that 433 campaigns were funded during the year of COVID – an increas from 2019 when 403 offerings closed. 2020 represents the highest number of campaigns ever and the second-largest amount of capital raised in any one year. The report notes that offerings received a bit of a government boost via the Future Fund that supported 11% of offerings during the year.
Etienne Paresys, founder of Equity Crowd Expert Ltd., commented:
“2020 has been a rather difficult year for most so it is very impressive for the equity crowdfunding industry to end the year with record-breaking figures. Several positive developments happened in the equity crowdfunding industry this year. It’s shown its flexibility by swiftly adapting to the Covid crisis via Future Fund campaigns. It has substantially grown, now running an average of 100+ campaigns every month and attracting over 280K individual investments. At the same time some question marks remain around the possible merger between the two main platforms, the potential effect of Brexit and its ability to produce meaningful returns for investors. The coming twelve months should be a pivotal period for this emerging industry.”
The report notes that Crowdcube and Seedrs shared the market almost equally with Crowdcube booking the most funding and Seedrs listing the slightly more offerings.
Crowdcube raised 50% of funding where 7 of the top 10 largest campaigns took place vs. 44% for Seedrs and 6% for other platforms but the two main platforms raised a similar number of campaigns: 48% on Seedrs; 47% on Crowdcube and 5% on other platforms.
The largest offerings were hosted by Crowdcube:
- The largest campaign by capital raised: Chip reaching £11 million
- The largest campaign by the number of investors: Moneybox attracting 16,735 crowdfunders
- The largest campaign by pre-money valuation: what3words valued at £150 million
Regarding Future Fund offerings, 47 firms raised £62 million in conjunction with the UK government scheme.
Seedrs dominated Future Fund offerings, as 85% of the campaigns were listed on the Seedrs platform raising 71% of the capital.
London continued to capture the bulk of investment crowdfunding at 47% and 54% of money investment. Edinburgh took second place and Cambridge third.
Seedrs and Crowdcube are in the process of merging operations which should create a powerhouse marketplace for private investment – better able to compete in contintental Europe as well as other jurisdictions.
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