A leading crowdfunding platform sees strong upswing in investment since Brexit vote.
Crowdcube, one of the UK’s leading investment crowdfunding platforms, has seen a strong upswing in investment through the platform since the decision to leave European Union (EU) last June. While the shock Brexit decision was expected to impact investment decisions among both UK entrepreneurs and investors, Crowdcube finished 2016 on a high with its best quarter since the platform launched in 2011 and investment up 20 per cent in the six months following the Brexit vote.
The figures, announced ahead of the publication of the latest Beauhurst report, ‘The Deal’, which analyses equity investment in non-listed UK companies, show that investors’ appetite for backing innovative and exciting businesses continues despite Brexit.
Crowdcube, which celebrates its 6th birthday this month, continues to break industry records, including BrewDog’s latest crowdfunding round, which saw the company raise £10m on the platform in December – the largest raise to date. This brings the total amount invested on Crowdcube to £210m.
Over its six-year history, Crowdcube has seen a number of changes in investment behaviour on the platform:
- Successful investment through the platform was just £2.2m in 2011, but last year was almost £80m.
- Nine businesses broke the mould and funded on Crowdcube when it first launched in 2011, but 2016 saw 121 businesses raise money on the platform.
- The average raise for a business was £239k in 2011, but in 2016 it was £642k.
- The size of the largest funding round has gone up ten-fold in six years to £10m in 2016 (BrewDog).
- London, the South West and South East maintain the top 3 regional slots for funded businesses, but the North West is rising up through the ranks thanks to the Crowdcube North office.
- The Crowdcube investor community has grown to over 340,000 from just 8,000 in 2011.
- Investor returns have topped £5m, with exits including Camden Town Brewery, E-Car Club and Wool and the Gang and via regular bond interest payments from the likes of Eden Project and River Cottage.
“However, the Government needs to stop paying lip-service and step up to support entrepreneurs more. Announcing £400m of funds last year was a start, but limiting this investment to traditional VCs fails to recognise the influence that crowdfunding has had, and will continue to have, on growth businesses in this country.”
As the crowdfunding industry continues to mature, Crowdcube has also seen a trend for more co-investment, with crowdfunding forming part of a larger investment round alongside VCs and institutional investors, and also a move towards corporate venturing, recently seen with Aviva Ventures’ first investment in smart-tech startup, Cocoon.