StartEngine has been raising growth capital once again in a self-crowdfunding round that has been available for several months now.
According to the offering page, $13,858,375 has been raised in a Reg A+ offering for common equity from 7669 investors. StartEngine is selling shares at a pre-money valuation of $1.32 billion. In the past, StartEngine has raised money for itself from individual investors to the tune of $69 million. StartEngine aims to raise up to $46 million, but it has already topped its lower-end funding hurdle.
StartEngine promotes the fact that it is the largest securities crowdfunding platform in the United States when you take into consideration two exemptions – Reg CF and Reg A+ which allow a company to raise up to $5 million and $75 million, respectively.
StartEngine compares its services to Wefunder, which raised $314.2 million, and Repubilc, which raised $225.2 million during 2021 and 2022.
StartEngine gained market share when it acquired competitor SeedInvest – owned by Circle at the time, adding the SeedInvest community to its database of potential investors, which is estimated at 1.7 million (after it closes).
StartEngine is also running a pilot program on secondary trading for securities issued on its platform. This is a key component for the future of private securities as it provides an alternative path for liquidity beyond a public offering or acquisition by another firm.
As of February 9, 2022, StartEngine reports having hosted 60 Reg A offerings, having raised a total of approximately $263 million, not including five offerings for StartEngine itself and 33 offerings of series of companies sold through StartEngine Collectibles Fund I LLC.
Reg CF went into effect on May 16, 2016, and as of February 9, 2023, StartEngine has enabled 1,007 offerings. As of February 9, 2023, in addition to the funds they have raised in their offerings, companies on StartEngine have raised a total of $672 million from all offering types.
In 2021, the funding cap for Reg CF was raised to $5 million. Currently, there is legislation in Congress that may raise the funding cap to $10 million. At the same time, there is a pending bill that may raise the funding cap of Reg A+ to $150 million. If this occurs, this will be a positive for the entire securities crowdfunding ecosystem.
The StartEngine Offering Circular is viewable here.