p2p equity

Seedrs Acquires Junction Investments – Will Expand Into US Market

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Seedrs, a UK crowdinvestment platform, has announced that it acquired California based Junction Investments. Seedrs plans to use this acquisition to expand to the United States in early 2015. Junction’s co-founders, Adam Kaufman and Brian Goldsmith, are now Co-Heads of Seedrs America, and they will be leading this expansion.

Seedrs was already open to international investors and startups, but so far the focus was clearly on the UK and Europe.

Seedrs on building a global platform: ‘A founding principle of Seedrs is that investment in startups and growth businesses should be global. We believe in a future where entrepreneurs and investors from all over the world can connect online. Investors should be able to discover and invest in opportunities anywhere, and entrepreneurs should be able to access capital worldwide.

Financial regulation remains largely national or regional, however, and compliance with applicable law has always been a non-negotiable element of Seedrs’s approach to business. Building a global platform is thus a multi-stage process that involves identifying the right approaches and partners in different jurisdictions.

Having opened across Europe at the end of 2013, we began to look at the U.S. market at the beginning of this year. The U.S. has been slower to embrace equity crowdfunding than the UK and Europe have, and full-scale crowdfunding is not yet possible there. But with the opening of online investment to accredited investors at the end of last year (under Title II of the JOBS Act), and the prospect of wider crowdfunding on the horizon (under the yet-to-be-implemented Title III of the JOBS Act, or an amended version thereof), we feel that now is the right time to begin building our U.S. presence.’

My take: This is one of the first international mergers in the equity crowdfunding space. It will be interesting to see if and how other players do on taking internationalisation beyond Europe.

German Crowdfunding Platform Bergfürst is a Bank Now

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German crowdinvestment service Bergfürst announced yesterday that it has been granted a full bank license from German regulator Bafin. This status is not that frequently reached by new companies. In 2013 only 3 new companies were granted full bank licenses.

Bergfürst was launched in 2012 and featured a fully regulated exchange as USP from the start allowing investors to trade equity of funded companies with daily market prices fixed. Effectively Bergfürst allows companies to do a small IPO directly to the crowd. Since launch Bergfürst only did one funding – albeit a huge one – in the end of 2013, Urbanara raised 3 million Euro (about 4M US$). In September 2013 Volksbank Berlin became a shareholder of Bergfürst. Continue reading →

Crowdcube Raises 1.2M from the Crowd and 3.8M from Balderton Capital

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Today British crowdinvestment platform Crowdcube started pitching the crowd to raise 1.2 million GBP. This was on the same terms as the 3.8 million GBP it raises from Balderton Capital in this series B funding. The total raised is for 25.64% equity. This puts the valuation at about 19.5 million GBP. The pitch was funded  in a record 16 minutes by 142 investors. There was a minimum investment threshold of 1,000 GBP (and a maximum of 25K GBP) in this round.

Crowdcube launched in 2011 and has raised over 30 million GBP for more than 130 start-up, early stage and growth businesses. More than half of this finance has been secured in the first half of 2014. Crowdcube also succeeded to sign up international partners and now has a presence in seven countries: Brazil, Sweden, Dubai, Poland, Italy, Spain and New Zealand. I feel that Crowdcube has done tremendously well in terms of product development and building its market position.

Darren Westlake, CEO of Crowdcube commented: ‘We’re delighted to secure growth finance from such a renowned VC who will undoubtedly add tremendous value both strategically and operationally. We’ve built a pioneering and award-winning service over the last few years. This investment, alongside the crowd, puts us in an even stronger position to provide essential growth finance for businesses and inspire a new generation of investors.’

This round follows earlier rounds, where Crowdcube raised 320K GBP in Dec. 2011 (I invested a small amount during that round) and 1.5M GBP last year prompting Techcrunch to rightly state ‘Let no one accuse Crowdcube of not eating its own dog food‘. However I would expect a crowdinvestment platform to be a stellar role model in communication with its own investors and I feel there is lots of room for improvement there (especially when compared to some other equity crowdfunding pitches I invested in) as frequence and content of information provided has been sparse and I found the answers to my direct email queries to Crowdcube directors unsatisfying.

Seven Players Join Forces to Promote Alternative Business Funding

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In the UK 7 innovative finance companies have joined forces and launched the Alternativebusinessfunding.co.uk website to inform SMEs what alternative funding methods they offer. Two p2p lending services Zopa and Funding Circle, two p2p equity (crowdinvesting) services Crowdcube and Seedrs as well as three other services Pension-Led Funding, Platform Black and MarketInvoice participate in this non-bank funders collaberation.
These platforms account for 85% of alternative finance for businesses market and have provided more than 580 million GBP to SMEs between them.

Screenshot

The information website works like this:
1. Enter the amount of funding you require.
2. After each question you will see the lights change dependant on which funder suits your criteria.
3. At the final question click on any green (or amber) traffic lights for your preferred funder details.
4. All that is left now is for you to approach your funder of choice about sourcing SME finance.

Review of My P2P Lending Predictions for 2012

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In January 2012 I wrote down my predictions for p2p lending developments in 2012. The black text is my original prediction, with the review added in green and yellow.

Deeper integration of mobile (probability <25%)
Can you use a p2p lending service from a Smartphone? Sure. Some even have special apps for that purpose. But that’s not what we are talking about here. We are at the advent of a couple years timespan where several players (compare this infographic) will be fighting over market shares in the developing mobile payment market. If there is a role for p2p lending services, it is yet undiscovered (aside from the use p2p microfinance makes of it in underdeveloped countries). No action so far. Continue reading →

Extreme Crowdinvesting Experiment – How I invested in a Startup that had no Idea

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Roughly a year ago I came across an idea that sounded extreme. There was a crowdfunding pitch for a startup that had no team and no idea. What? Well the idea was that the startup once founded would use the ‘Design Thinking’ method to develop the idea and the business model in the first months after funding and company foundation. The pitch was for 100,000 CHF. It had a strange appeal to me, so I invested a small amount. The pitch did fully fun and 4 applicants – students of the university of St. Gallen, Switzerland – were recruited as founders and off they went. The founders are not paid a salary but compensated in shares for their work.

Soon the appropriately named ‘ Design Thinking Startup AG’ was incorporated.

One year of development

As investor I received nearly weekly updates newsletter-style on what the team was currently up to. Through 38 of these reports I was fascinated by successes, drawbacks, ideas and lots of work done. Initially the team sought idea and coaching, used the Design Thinking method to identify problems (needfinding) and did market research. Finally around week 11 one of the ideas substantiated into the idea that was developed.

In between there were events for investors and shareholder meetings approving the decisions proposed by the team.

Then a prototype was built, a development company contracted, the team moved office to Zurich and a second funding round was raised (again through crowdinvesting). During the last weeks the product was presented, tested and finalized in a closed beta.

The result

Last Friday Stablish.me went live. Stablish.me has set itself the goal to redefine the résumé. Further, the company aims to replace it through it’s social endorsement network in the
long term. Continue reading →