Crowdfunding platform named UK’s most active investor in private companies
A crowdfunding platform has been named as the UK’s most active investor in private companies by a new report.
In the first quarter of 2016, Seedrs made 37 investment deals. It was followed in second place by fellow crowdfunder, Crowdcube, which was involved in 30 deals.
The Business Growth Fund was the next most active, with 11 deals completed.
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Overall, Beauhurst’s report tracked 71 crowdfunding deals in the first quarter, below 91 across private equity and venture capital.
Despite the dominance – in terms of number, rather than values, of deals completed – of these two crowdfunding platforms, the sector experienced a slowdown in activity in the first quarter of this year. Beauhurst said its figures for crowdfunding were the lowest since the end of 2014.
The total number of deals across all sectors also dropped off in the first quarter, down 44 per cent year on year to 556 deals overall.
The report suggested the slowdown could be explained by fears over the EU referendum and other more global concerns.
It said: “Investors clearly still have money to invest, so why are they making fewer investments? Investors are committing more money to larger rounds into more established businesses, which suggests they’ve developed less of an appetite for risk.
“As 23 June looms, it’s tempting to wonder if jitters about the country’s future membership of the EU are prompting investors to hold fire on backing riskier propositions but that might be overthinking it.
“Global concerns such as China’s economy and the oil price are more likely culprits as investors look to derisk their overall portfolios in response.”
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The first-quarter report showed that London continues to dominate fundraising. In the first quarter, 255 London deals were tracked, with value totalling £624m. Across the rest of the UK, 301 deals worth a total £675m were announced.
Westminster borough on its own outperformed most regions, including Scotland, Wales and Northern Ireland, with 40 deals. The next best performing boroughs were the City of London and Camden, both with 29 deals, Hackney with 28 and Tower Hamlets with 25.
The report is based on Beauhurst's tracking of equity investments into UK-based, high-growth companies.
Seedrs
Seedrs took the crown of being the most active investor in private companies back from Crowdcube in the first quarter.
Its total of 37 deals tracked by Beauhurst was up from 29 in the last quarter of 2015. Crowdcube, meanwhile, fell from 37 at the end of 2015 to 30.
Jeff Lynn, chief executive and co-founder of Seedrs, said: “The equity crowdfunding industry continues to grow rapidly, and the numbers and types of businesses choosing to use this solution alongside traditional fundraising methods continues to expand substantially.
“Seedrs has become the first of port call in providing funding for these businesses, and we have campaigns ranging from £20,000 to more than £3 million being funded through Seedrs. We have very much opened the conversation about early-stage investment as an asset class, and we believe that it is an asset class which can form an important part of almost any investor’s portfolio.”