Britain’s biggest crowdfunding platform Crowdcube is eyeing major expansion to Europe and could one day put company stock on the blockchain after raising £10 million from a US cryptocurrency business.
US business Circle is backing the crowdfunding platform, which has helped the likes of BrewDog, Revolut and Mindful Chef raise money from small time investors. Existing investors Balderton and Molten also took part in the funding round.
Circle owns SeedInvest, a similar startup funding platform in the US. Crowdcube boss Darren Westlake told the Standard the investment extended a partnership between his business and SeedInvest. The pair have in the past partnered up to offer dual listings for startups looking to raise cash in both the UK and US.
“We’ve known SeedInvest for a longtime,” Westlake said.
The investment from Circle follows the collapse of merger talks with rival UK platform Seeders earlier this year. The deal was blocked by the competition watchdog, a decision that raised questions about the future of both businesses.
Westlake said Crowdcube had done “incredibly well” since then and became operationally profitable earlier this year. He decided to raise money to fund expansion to Europe after a rule change meant companies could raise up to €13 million from retail investors in Europe.
Crowdcube “spoke to all the usual suspects” about investment before being approached by Circle.
While Circle operates SeedInvest, it is best known for cryptocurrency. Founded in 2013, the Goldman Sachs-backed startup originally worked on crypto payment products but has found success with a ‘stablecoin’ -- a cryptocurrency pegged to the dollar. Its USDC stablecoin has a circulation of $33 billion
Westlake said Crowdcube shared a “longer term” vision with Circle that “capital formation and company formation is going to be internet native.” He said Crowdcube could look to tokenize equity in future, but said that was an idea probably 10 years out.
Ryan Feit, director of Circle and CEO and Co-Founder of SeedInvest. “Expanding online fundraising to new markets creates a massive opportunity for internet native capital formation.”
For now, Crowdcube hopes to be fully licenced to operate across the EUY by the end of the year, raising the prospect of a pan-European investment platform.
“I think it’s huge,” Westlake said. “I think we can double or triple the size of our business quite quickly.”
Crowdcube has grown from 70 staff to 110 over the year and hopes to reach 200 by the end of next year.
The company, founded in 2011, was valued at £140 million in the latest investment round. It has raised £30 million from investors to date. Over £1 billion has been invested over its platform, including £200 million over the last year.
Investment from SeedInvest raises the prospect of a possible sale or second merger attempt further down the line.
Westlake said: “Who knows - it’s not something we’ve talked about.”