The injection of funds into the crowdfunding platform is a welcome good news story for British fintechs and startups
Crowdfunding has become an increasingly popular way to get everything from startups to niche indie movies off the ground. But since Britain voted to leave the EU, venture capital funds like Augmentum Capital have voiced fears that the referendum result might cause confidence in the UK sector to plummet — which could have a downward impact on the number of people flocking to sink their coppers in fledgling companies. So news of crowdfunding platform Crowdcube’s ability to attract investment comes as a welcome indication that investors still have faith in the industry.
Over 3,700 crowdfunders and the venture capital firm Balderton Capital have invested over £8m in the startup, with the average investment standing at £1,824 and the largest at £1m. The company hit its £5m target in just four hours.
And it seems the startup will be putting the money to good use: it’s already advertised for a new chief technology officer to help Crowdcube develop a secondary trading environment. The exchange will enable shareholders to sell their stakes and create immediate liquidity for people with shares in any private British business — meaning potential returns will no longer be limited to major exit events such as trade sales or IPOs.
The company’s leadership believe the influx of capital would suggest an end to fears about the sector’s future after the referendum results threw the future of the industry into doubt. “Crowdcube has played a key role in cementing Britain’s position as a global fintech leader and this shows that investors’ appetite for backing ambitious British businesses seeking growth capital remains as strong as ever,” said Darren Westlake, CEO and co-founder of Crowdcube.
After two months of Brexit uncertainty, seeing confidence return to the fintech sector is certainly cause for celebration.