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Mon 18th Jul 2016 - Crowdcube hits £5m crowdfunding target four hours after launching to registered investors
Crowdcube hits £5m crowdfunding target four hours after launching to registered investors: Crowdcube has hit its £5m target on its own crowdfunding platform just four hours after launching to registered investors at midday today (Monday, 18 July). The company, co-founded by Darren Westlake and Luke Lang, is offering a 7.14% equity stake in return for the investment. So far, 1,629 investors have pledged £5,005,740 and it is now “overfunding” with 29 days remaining. Separately, venture capital firm Balderton Capital has also invested £1m in the round. The fund-raise, which is the company’s first with a prospectus to allow shares to be issued above the limit set by EU rules, will open to the public at midday tomorrow (Tuesday, 19 July). The pitch states: “Our mission is to make investment easy and rewarding for anyone, anywhere. So far, we’ve amassed a crowd of over 285,000 people and secured almost 50% of the £245m UK equity crowdfunding market. We’re not stopping there though. We want to dominate the UK equity investment market for private companies, estimated to be worth £5.3bn, and become the partner of choice for investors and ambitious high growth companies. To achieve this, we’re focused on three key strategies: 1. Provide the crowd with unrivalled investment opportunities: we’ve completed over 400 successful raises (39 over £1m), numerous rounds with leading venture capital firms and delivered the first two successful UK crowdfunding exits. 2. Fund businesses through the world’s largest active investor community: we’ve attracted one of the largest equity investor communities in the world that we forecast to reach circa 500,000 by 2017. 3. Deliver investor returns: we plan to pioneer secondary liquidity for investors and intensify our focus on attracting later stage businesses that have potential for faster returns. We’re also planning exciting new software products to enable businesses to manage their investors more efficiently and give investors greater transparency on how their investments are performing. We’ve achieved great things and have ambitious plans for the future, and we want you to be part of the next, most exciting stage of our growth. Since launch in 2011 revenue has continued to grow year-on-year. This has been achieved by successfully funding an increasing number of higher value raises and maintaining price. Between FY12 and FY15 (30 September year end) revenue grew by at a compound annual growth rate of 149% to £2.7m. In the first six months of FY16 revenues doubled year-on-year to £2.1m. As we continue to leverage our market leading position in a growing industry we are focused on delivering ongoing annual revenue growth driven by our product development. We currently expect revenues to reach our break-even point by the end of 2018. Our use of proceeds from the minimum net raise proceeds of £4.8m is as follows: £3.65m in working capital to fund our existing operations based on average monthly expenditure of £740,000 in 2017; £0.75m to increase our technology team; £0.4m increase in our 2017 marketing budget. We believe the proceeds of the raise will enable us to deliver on our three key growth strategies – provide unrivalled investment opportunities, fund businesses through the world’s largest investor community and deliver investor returns – which we believe will drive continued revenue growth and ultimately shareholder returns. We believe that the vision outlined in our prospectus will take three to five years to execute fully. In our view delivering this vision will maximise the potential for an exit.” Its last crowdfunding round in 2014 saw Crowdcube raise £1.2m from crowd investors, alongside £3.8m from Balderton Capital, in just 16 minutes. It had previously raised a total of £12.8m to fund its growth after attracting investment from more than 500 crowd investors, as well as venture capital firms Balderton Capital and Draper Esprit and city stockbroker Numis Securities. Since Crowdcube pioneered equity crowdfunding in 2011 it has amassed more than 285,000 members who have invested more than £160m in more than 400 raises, with £110m being raised since the start of 2015 alone. River Cottage as well as Camden Town Brewery, which has been acquired by Anheuser-Busch InBev, are among the companies to have successfully raised funding through the platform.


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