Crowdcube, a leading online investment platform in the UK and Europe, says secondaries have quickly become a significant part of its business.
According to a blog post, Crowdcube reports that £543 million in PISCES secondaries are in the pipeline. In total, including the PISCES listings, there is said to be the potential for 29 listings worth £750 million over the next two quarters.
Like most securities crowdfunding platforms, the initial business focused on startups and very early-stage ventures. The goal was to broaden access to private securities while matching risk capital with firms in need of funding. Over time, most of these platforms have expanded into other verticals, including secondary security offerings, typically enabling the trading of shares in firms that have previously received venture backing but before an initial public offering.
PISCES, or Private Intermittent Securities and Capital Exchange System, is part of a UK initiative to improve both public and private markets. A PISCES offering lets a private firm remain private while providing some liquidity. Regulated platforms offer the shares. Crowdcube has partnered with the London Stock Exchange on the service.
Crowdcube reports that its pipeline of secondaries includes some of the fastest-growing companies in the UK and EU.
“What is different about this pipeline is that it is near-term, and we have good visibility on it. We built the infrastructure for this before PISCES existed, and that is why these transactions are coming to us,” explains Crowdcube co-CEO Matt Cooper.
The company also shares that the new PISCES ecosystem has so far enabled four transactions, with three on the London Stock Exchange Private Securities Market (PSM) in which Crowdcube was involved. Crowdcube is a Registered Auction Agent (RAA) on the PSM.
Crowdcube adds that it pursued secondaries years before the PISECES framework existed. The secondary business is transforming Crowdcube’s business and helping the company grow and expand. Secondaries could become the largest segment of its business as it becomes more sustainable. A similar phenomenon has taken place in the US, with multiple platforms going beyond primary issuance to support secondary offerings
While the offerings under PISCES have been UK firms so far, the company reports that it is seeing interest from European companies looking to use PISCES for their next liquidity event.