Update (2021.12.02)

On October 5, 2020, hours before the adoption of the The Regulation on European Crowdfunding Service Providers (ECSP), the two oldest and largest British platforms announced a merger. The timing could not have been a coindicence; the intent was clearly to prepare for rapid European expansion.

On March 25, 2021, it was announced that the UK Competition and Markets Authority did not approve the Crowdcube-Seedrs merger. Although the market share of the two marketplaces in the British venture capital market is only 4%, it’s more than 90% in the total crowdfunding market. As Seedrs announced the conclusion of their debate with the authority, Jeff Lynn –with his characteristic optimism – also announced a new fundraising round.

On December 1, 2021, one of the largest US platforms, Republic, announced the acquisition of Seedrs and the establishment of a global crowdfunding marketplace. Barely half a year has passed since the failed merger, and another spectacular transaction took place.

According to TechCrunch, Republic had recently raised $150 million, a large part of which will cover the $100 million deal. Seedrs’ approximately 5,000 small investors will be paid in cash, but their institutional investors will also benefit. The professional relationship between the two platforms is longstanding; the founder of Seedrs used to be their advisor.

You can read more about US investment crowdfunding platforms here.

And you can listen to the Seedrs story in detail here.

You can read our previous article below.

Crowdfunding allows for active participation in the pre-IPO phase, the growth stage of a company’s life cycle, and two major providers of this service, the British Crowdcube and Seedrs, have announced their merger.

By the end of March 2021, more than £2 billion has been invested in campaigns through the two platforms combined, primarily into British startups, from British and international investors. From the merger, both companies expect an increase in funding opportunities for pre-IPO companies, enhanced secondary market activity, better capital raising ability of the economy and overcome the crisis. The adoption of ECSPR makes this news of particular relevance for European capital markets, as a platform of this size has very good expansion prospects.

In the light of the adoption of ECSPR, this news is of particular importance for European capital markets, as the prospects of such a strong platform expanding in Europe are very good, which we will address extensively in our articles and strategy development.

The British Competition and Markets Authority (CMA) expressed it’s concerns about the merger of the two crowdfunding giants. In their statement on March 24, they argued that the two companies would cover 90-94% of the British equity crowdfunding market after the merger, potentially monopolizing the sector. In response to the news, Seedrs announced that they would end the merger process due to CMA’s negative attitude and instead raise capital in another round. Becoming an investor in Seedrs is open for everyone, as they regularly launch crowdfunding campaigns, most recently raising 4.4M pounds from about 2,700 investors a year and a half ago. Jeff Lynn, the founder of Seedrs, remains optimistic, or as he puts it, bullish: the capital raised on Seedrs in Q1 2021 broke the previous record, reaching 1.3 billion dollars. The two platforms account for 95% of the very young investment crowdfunding market, but they only reach 4% in the total venture capital market, so they do not consider CMA’s decision to be justified, but they have accepted it, and as Jeff Lynn put it: from marriage plans, back to competition. Well, a leader who can manage this change is sure to be on his feet.

Our previous article on the British market praised the British crisis package, which provides genuine market-based assistance to British businesses in crisis, making deserving businesses truly crisis-proof. In addition, it also presents tax incentives to encourage startup investments.