Leading crowdfunding platforms Crowdcube and Seedrs are going to merge in a new deal, creating one of the world’s arguably largest private equity marketplaces.
Since 2011, over £2bn has been invested in campaigns on Seedrs and Crowdcube. They have helped more than 1,500 companies secure investment, including Brewdog, Revolut and Perkbox.
Jeff Kelisky, CEO of Seedrs, said that the deal will enable them “to harness the best of both companies”.
“We are both FinTech pioneers that have challenged the landscape of capital raising in Europe, building marketplaces for private equity investment,” he added. “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 merger will see Crowdcube acquire all outstanding share capital of Seedrs via scheme of arrangement. Existing Crowdcube shareholders and option holders will own 60% of the combined company. Existing Seedrs shareholders and option holders will own 40% of the combined company. The percentages are said to reflect the approximate valuations of the two companies based on each of their most recent fundraising rounds.
The deal is awaiting approval by regulators such as the UK Competition and Markets Authority, the Financial Conduct Authority, the court and shareholders of the two companies.
The merger is expected to be completed by late 2020 or early 2021. Until then, it is business as usual for the two companies.
Once completed, Kelisky will serve as CEO of the combined company whilst Darren Westlake (pictured), Crowdcube’s CEO and co-founder, will serve as executive chairman. The new joint venture’s management team will include key leaders from both businesses.
“Equity crowdfunding has redefined how many ambitious businesses raise investment and engage with their customers,” said Westlake. “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.”
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