European equity crowdfunding platforms to merge
The deal is structured as the acquisition by Exeter-based CrowdCube of Seedrs. Crowdcube will own 60 percent of the merged company, with Jeff Kelisky, Seedrs’ CEO as CEO of the combined company and Darren Westlake, CEO and co-founder of CrowdCube, Executive Chairman.
The merger creates the world’s largest private equity marketplace, says Westlake. Both platforms allow small investors to buy shares in startups without having to invest in equity funds. Crowdcube had recently teamed up with a tech investment fund, Episode1, to allow small investors to join large funds in deals around digital infrastructure.
“Equity crowdfunding has redefined how many ambitious businesses raise investment and engage with their customers. Today’s agreement is an incredibly exciting milestone that will benefit high growth businesses, their investors who believe in their vision and the wider entrepreneurial ecosystem that supports them. Together with Seedrs, we can accelerate plans to further expand in the UK and overseas, launch innovative new products and improve our customers’ experience,” he said.
Over 1500 startups on CrowdCube and Seedrs have raised $2bn since 2011. This includes sensor maker Nanusens, which raised over E2m on Crowdube, mapping company What3Words and graphene equipment maker PlanarTech.
“We are both fintech pioneers that have challenged the landscape of capital raising in Europe, building marketplaces for private equity investment,” said Jeff Kelisky, CEO of Seedrs. “We believe that you need to be a player of greater scale to serve companies and the investors who support them. Now is the right time to bring our strengths together, in order to meet our common mission to deliver a step change in the accessibility and efficiency of private company investing. This will not only create value for ambitious companies and their investors, but also for the economies and communities that they serve. As we look to the future, we’ll be well positioned to build on our combined strengths and create a powerful global private equity marketplace that will transform the ecosystem of equity finance globally.”
The deal still needs approval from shareholders, the Competition & Markets Authority (CMA) and the Financial Conduct Authority (FCA). The initial phase of the CMA process will take about two months, after which the CMA will either approve the transaction or move it to phase two of the process which could take six months or more.
The deal is expected to be completed in late 2020 or early 2021.
www.crowdcube.com; www.seedrs.com
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