Draper Esprit, one of Europe’s leading venture capital firms, has taken a £6 million stake in Crowdcube, the global market leader in equity crowdfunding, to accelerate growth and continue its drive towards profitability in 2019.
Channel 4 is also investing via its Commercial Growth Fund following Crowdcube’s record-breaking commercial performance in 2018, which includes rising revenues due to increased demand from businesses and investors both in the UK and overseas.
The public will have the opportunity to invest alongside Draper Esprit, Channel 4 and Balderton Capital through a crowdfunding campaign, which will publicly launch on 14 November and will supplement the institutional investment. The round marks Balderton’s fourth investment in Crowdcube, and the second time Draper Esprit has backed the fintech pioneer, following its initial investment in 2015.
The funding comes as Crowdcube achieved a record quarter for revenue, which reached £1.6m for Q3 2018, an increase of 60% on the same quarter last year. In the same period, investment pledged through the platform increased by 97% (£50.4m vs £25.6m). Meanwhile, annual revenue is forecast to rise to £6m in 2018, up from £3.9m in 2017 and £3.6m in 2016.
Crowdcube has funded more equity raises in the UK than any other equity funder since its launch, according to the independent researcher, Beauhurst. Six weeks ago Crowdcube announced it had facilitated over 100 raises of £1m or more, including for well-known, high-growth companies such as Monzo, Mr & Mrs Smith, gohenry, Revolut, BrewDog, Camden Town Brewery, and Adzuna. Over £355m has been successfully invested into more than 600 start-up, early and growth-stage businesses on Crowdcube since 2011.
Darren Westlake, CEO and co-founder of Crowdcube, said: "We've transformed equity finance and funded more businesses than anyone else in the UK to become a preferred choice for British entrepreneurs. This latest investment, from two highly-regarded venture capital investors who are significantly increasing their stakes in Crowdcube and a famously forward-thinking media company, is fantastic proof of our progress and potential. It will enable us to accelerate our journey to profitability and expand faster in the UK and overseas, so we can help more innovative and ambitious businesses from across the globe grow, expand and make a difference to the world."
Simon Cook, CEO of Draper Esprit, which is investing £6m, including £2m in secondaries, said: “Crowdcube has demonstrated significant progress and impressive growth in the last 12 months. They have a proven and scalable platform, seven years of unrivalled experience, strong brand awareness and a clear market opportunity in the UK and abroad. They are the world’s leaders in equity crowdfunding, and I expect them to continue blazing a trail of innovation and success.”
Crowdcube will launch its first national TV advertising campaign in 2019 to increase brand awareness and accelerate growth across the UK following Channel 4's Commercial Growth Fund investment. Crowdcube intends to help more businesses, particularly regionally, secure funding, with over 60% of the amount invested on Crowdcube this year going to businesses based outside of London.
Jonathan Allan, Channel 4’s Chief Commercial Officer, said: “Crowdcube is the perfect fit for Channel 4’s Commercial Growth Fund investment. We both share a desire to support emerging talent and disrupt the status quo. This innovative business is powering the next generation of brilliant entrepreneurs all across the country and energising the investors who want to back them.”
The company is also seeking to make the most of a surge from overseas businesses seeking finance from Europe and the US. Through its operation based in the UK and Spain and via an exclusive partnership with leading US crowdfunder, SeedInvest, more than 90 overseas businesses have successfully raised on Crowdcube. Overseas businesses alone accounted for 18% of successfully funded businesses in the first half of 2018.
Suranga Chandratillake, partner at Balderton, added “Crowdcube has continued to demonstrate great progress and growth in the last 12 months and we’re pleased to be supporting the company alongside Channel 4 and Crowdcube’s global investor community. In the last seven years, Crowdcube has built a scalable platform and is the world leader in equity crowdfunding. We look forward to being partners on the journey ahead.”