Q3 2016 Issue 2 - Q3 2016
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CUBEDIssue 2 - Q3 2016 Issue 2 - Q3 2016 www.crowdcube.com cubed - Foreword Foreword Welcome to the second issue of Cubed. As you’ll have seen, we have had an astounding few months here at Crowdcube, as we raised a total of £7.7m, launched our iOS app and have amassed the UK’s largest investor community, which now stands at more than 300,000 people. We couldn’t have achieved this without the support from our investor community and great British businesses, which are at the heart of Crowdcube. Luke Lang Co-founder The finance raised through our platform is helping businesses to boost UK exports through overseas expansion, create thousands of new jobs and led to the opening of offices, shops, bars, restaurants, fitness centres and much, much more - as you’ll read through this issue. A total of £5m has been delivered in returns for investors, including equity exits from E-Car Club, Camden Town Brewery and Wool & the Gang, along with bond interest repayments. This magazine sets out to show you more about our industry, whether its crowdfunding, finance or technology, and the effect your investment is having on businesses across the UK. Enjoy and read at your leisure. 3 cubed - Contents 16 34 Crowdcube Investing 8 Crowdcube’s raise 28 Who are the crowd? Our plans for growth Crowdcube gives everyone the opportunity to become an ‘Armchair Dragon’ 14 Investors in Crowdcube 30 Proud of our crowd A few words from our Funded Club members Investor insight into investing 16 Invest anytime, anywhere on Crowdcube Equity crowdfunding investment like you’ve 34 Building a well-diversified portfolio never seen before Help balance the risk of losing capital by 20 Our rapidly growing crowd of 300,000 investing across sectors and stages members 38 Crowdfunding myths debunked See what over 300,000 of our members equates to There are a number of myths that need to be dispelled 24 Crowdcube Spain approved by regulator Crowdcube is now internationally regulated in two countries 4 cubed - Contents 54 66 78 Industry Clean technology Funded Club 46 Latest industry data 60 Industry spotlight: 78 LICKALIX cleantech and A report by Beauhurst we caught up with the crowdfunding founders 50 The rise of fintech Guest article with Andrew 82 Escape the City, where Britain is the leading fintech Wordsworth are they now? centre in the world 66 Pavegen timeline Escape the City is on a 52 Post-Brexit Britain Milestones and mission to help one million We’ve got ambitious plans achievements people improve their lifestyle for the future 70 Cleantech business POD 90 Newbites 54 Spotlight on the UK’s Point leads the way Updates from our flourishing A.I. startup Erik Fairbairn, founder and Funded Club scene CEO of POD Point, shares 106 Stockbrokers turned Equity investments in A.I. the success of his campaign entrepreneurs turn to saw a record-breaking 143 74 Hear from the the crowd deals in Q1 globally entrepreneurs behind We welcomed ISO Spaces the world’s first into the Funded Club after crowdfunding exit successfully reaching their Find out how the business maximum target has grown 112 goHenry’s record raise of £3.99m A digital banking solution that aims to make kids smarter at managing money than their parents 116 Vivobarefoot discount 118 Million club 120 Key achievements 5 6 Crowdcube What a quarter at Crowdcube. Not only have we raised a total of £7.7m, we have launched the Crowdcube App and now have a community of over 300,000 members. 7 cubed - Crowdcube raise Thanks to the crowd, we raised £7.7 million Thank you to the 3,503 crowd investors, alongside prominent venture capital firm Balderton Capital, who helped us raise £7.7 million in growth capital. This sets a new record for the largest equity crowdfunding raise on a UK platform, the second being goHenry after raising £3.99m in June 2016. Long-term venture capital backers Balderton Capital invested £1 million in this latest round, in what is its third investment into Crowdcube. 8 cubed - Crowdcube raise 9 cubed - Crowdcube raise A huge thank you from the Exeter team 10 cubed - Crowdcube raise The news could well stun some industry commentators who predicted that Brexit would all but destroy funding for promising fintech businesses. 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. We will use the finance to realise our growth plans, which are aimed at providing both investors and businesses with opportunities that make investment easy and rewarding. This includes an ambitious move to develop and offer a secondary trading environment on the Crowdcube platform that will give shareholders of any UK private company the ability to sell their stake, if demand exists. The exchange will create immediate liquidity for people with shares in any private British business, meaning that potential returns are not limited solely to major exit events such as trade sale or IPOs. We’ve shown that ambitious later-stage British businesses can raise serious amounts of growth capital on Crowdcube. Our record-breaking £7.7 million raise, which is the 41st fundraise over £1 million in our history, is yet another watershed moment that will help us execute our plans to pioneer secondary liquidity for investors, whilst facilitating larger rounds to fund the growth of Britain’s ambitious businesses. As we embark on Crowdcube’s next stage of growth we’re excited for the future and are pleased to have 3,503 new investors join us on the journey. 11 cubed - Crowdcube raise This is the fourth time that we’ve raised finance from our crowd, which now stands at 300,000 people. This time we published a prospectus, which enabled us to raise more than the €5 million limit set by current EU rules, which was hit in just four hours. The average investment made in this round was £1,824 and the largest was £1 million, which came from a private investor. 82% of investors ‘came back for more’ after previously backing companies that have crowdfunded on our platform. On average, they hold shares in seven companies, with an average portfolio value of £5,871. Our growth plans that will be supported by the finance raised include: Providing unrivalled investment opportunities – targeting more venture and growth-stage businesses, many of which – such as BrewDog, goHenry and Sugru – are choosing to crowdfund. Fund businesses through the world’s largest investor community – 300,000 members already on Crowdcube, members numbers forecasted to hit 500,000 by the end of 2017. Deliver investor returns – plans to pioneer secondary liquidity to give early investors in private UK companies the opportunity to sell their shares if demand exists. Our London team and co-founders 12 cubed - Crowdcube raise 13 cubed - Investors in Crowdcube Investors in Crowdcube We spoke to our Funded Club members Grind & Co., goHenry and POD Point to find out why the companies’ founders backed Crowdcube in our latest round of funding. goHenry “The UK and Europe have created an excellent regulatory framework to help SMEs raise funds and grow faster. But this framework would remain what it is, i.e. nice policy words, if companies such as Crowdcube weren’t here to bring to life the desire of retail investors to back the causes they want to see succeed on a global scale.” Alex Zivoder, CEO of goHenry 14 cubed - Investors in Crowdcube Grind & Co. “Since our £1.3m raise I have lots of people contact me and ask for help and advice with crowdfunding, and I don’t hesitate to tell them to go with Crowdcube. The size of their audience and the pace at which they are developing makes them the clear market leader.” David Abrahamovitch, Co-founder of Grind & Co. POD Point “I decided to invest in Crowdcube as it provides an opportunity to invest in something that’s fundamental to the UK’s entrepreneurial endeavours. I know the senior team at Crowdcube and they’re doing a great job for the right reasons and I wanted to support that.” Erik Fairbairn 15 Founder of POD Point cubed - Crowdcube App Invest Anytime, anywhere Whilst catching some winter sun. Raised £753,430 from 310 investors. Capital at risk 16 cubed - Crowdcube App 17 cubed - Crowdcube App Throughout the day we all have pockets of time to spare, and instinctively reach for our phones. Perhaps it’s while commuting to work, waiting to meet friends for a drink, lying on a sunlounger in the Mediterranean, or camping in cloudy Cornwall. From today you can seize these moments to catch up on the latest companies raising finance, using the new Crowdcube iOS app, wherever you are. The Crowdcube App gives you easy access to all the investment opportunities on Crowdcube within just a couple of clicks. New opportunities are synced to the app which you can read at any time, even when you’re offline. You can browse, follow and invest quickly and easily using Apple Pay, which is also now offered on the Crowdcube website. To help you keep track of what’s new and interesting, the app can notify you when new opportunities launch, and you can archive any that don’t take your fancy, just like managing your email. Over time we plan to offer the complete Crowdcube investor experience in the app, including access to discussions and your portfolio, while also offering the app experience on non-iOS devices. In the meantime you can continue to access all aspects of Crowdcube on any mobile device using our website.