Crowdfund update #10 April 2021 (Catch up edition)

It's been a while since the last update, i'm sorry about this! i'm pretty confident about keeping a bi-monthly schedule going forwards - thanks for waiting. Anyway,let's dive in:

Crowdfunding Platforms🖥️

The competition markets authority (CMA) blocked the Crowdcube and Seedrs merger, noting their dominant market share, and the merger's risk to innovation.

Crowdcube will now charge a 5% carry (take 5% of any profitable exits). It is also rumoured that Crowdcube will now soon launch a secondary market offering.

Above: Correspendence from Crowdcube regarding their new 5% carry fee. This can be found on their homepage.

Crowdcube achieved profitability at the EBITDA level for two quarters straight in 2020, whilst Seedrs grew revenue faster but was just shy of profitability, with their secondary market making almost ~25% of revenue.

It is rumoured that Crowdcube will fundraise soon. Seedrs announced a fundraising almost immediately after the CMA announcement.

Across the pond 🌎

Gumroad - Patreon competitor Gumroad (think Ebay for the creators/influencers) raised $5m in a single day on US crowdfunding platform Republic. Gumroad is the first high profile company to take advantage of recent changes in legislation around crowdfunding in the US (there was a ~$1m cap on what US companies could crowdfund before this). The company is profitable, VC-backed, and has grown ~250% in the past year.

Above: A screenshot of Gumroad's now-closed crowdfunding campaign on Republic

Wefunder, a crowdfunding platform, raises $5m in a crowdfund.

Republic, another crowdfunding platform, closes first tranche of a $36m Series A round.

Good news 😀

Gohenry, Landbay, Adludio and Oppo Ice Cream (exited) and many other crowdfunded businesses make the 2021 FT1000 list - the Financial Times' list of the fastest growing startups in Europe.

Senta, a seedrs-funded accountacy software startup, was acquired by IRS Software group. To my knowledge, the return is a record amongst UK crowdfunding platforms, realising a 120x return (and this is before accounting for SEIS relief) for Senta's earliest investors from 2015.

Freetrade's Series B round (see below) came with an optional secondary offering for crowd investors. Crowd investors from Freetrade's first round would realise a ~47x return if they accepted this offer; If you take SEIS relief into account, this becomes a ~95x return.

Mindful Chef + Simply Cook - two Crowdcube funded businesses- are acquired by Nestle. Mindful Chef's exit led to a 3.5x return for crowd investors. Returns for Simply Cook are unknown.

Snoop, a crowdfunded savings fintech, entered acquisition discussions with price comparison giant MoneySuperMarket. It is rumoured that Snoop has been approached several times regarding acquisition, although has denied all offers.

Revolut broke even recently (unclear if this is operating profit, net profit, etc). They have made inroads with US expansion, pursuing a US banking licence, and have even began Indian expansion.

Bad news 😔

Football Index (sports gambling), Mrs Wordsmith (Gaming/Edtech) and The house crowd (property crowdfunding) all failed since the last crowdfund update. A gentle reminder that startups are incredibly risky.

Crowd investors in pet insurtech Felcana were not given/missed an opportunity for pre-emption, following a recent fundraising by the company. It is unclear whether the fault lies with Seedrs, Felcana, or anyone at all. What is interesting is that Seedrs explained it would not be in the interests of investors to pursue legal action (who would sue their own startup into bankruptcy, after all?), raising serious questions about how enforcable any of the agreements in crowdfunding 'term sheets' are.

Tom Blomfield, founder of Monzo, departed. Ex-Visa team TS Anil took on the CEO role. Monzo now has 135k subscribers, following criticsm of their lack of profits. (e.g. Competitor Starling is profitable - at the operating level).

Raises 🤑

Brewdog, the famed craft brewer, has now raised a staggering £22m in their latest crowdfunding campaign "Equity for punks tomorrow". Since the last crowdfund update, Brewdog have officially become a "B Corp", opened their first bar in Mumbai, India, and are currently the fastest growing craft brewery in America.

Drop Bear Beer, the craft brewer, raise £1.8m from the founder of Admiral Group (the insurance company).

Curve (all-in-one card fintech) has closed a $95m Series C fundraise, bringing its total raised to date to $175m. The funds will primarily go towards US and further Europe expansion. Whilst Curve's 2020 financials are unknown, their 2019 accounts show revenue doubling to ~£6m and losses quadrupling to ~£29m.

Gohenry - the banking app for teens, raises $40m in a VC round. The funds will be used to drive US expansion. Gohenry recently reached 1.2 million customers (incl. parents and children users of the app).

Freetrade raise their series B, comprising $35m in newly issued shares (growth capital) and $15m in secondaries (Exit for earlier crowd investors, realising up to a 47x return). Participating VCs include left lane, L Catterton and Draper Esprit. Having already set up international offices in Australia and Sweden, is now aiming to launch their product in france before H2 2021. Launches in Germany, The Netherlands (they already have 1k beta users in The Netherlands) and Ireland are planned for later this year. Freetrade now have 600k+ users, 200k of which are 'active' and 30k of which are subscribers (as of january) - the average portfolio size of users now sits at ~£4k.

Above: A detailed chart of Freetrade's user growth, taken from their community. The spike in growth in January was fueled by the reddit-driven popularity of GameStop stock.

Freetrade competitor Bux have raised a hefty amount of funding at an uplifted valuation for what is presumed to be their Series B. This is as yet unannounced so I'll omit the details for now.

(Private) Live raises 👤

None of note this time i'm afraid! 😔

Upcoming campaigns 📆

Simple Feast - Vegan meal delivery company (think HelloFresh meats Beyond Meat). Backed by Balderton Capital (Lovefilm, Revolut, Nutmeg) Pre-register here.

Tred - Neobank with a green bent. Think Monzo but hyper-ecofriendly. Pre-register here.

Ikigai - a wealth management and neobank rolled into one. Think Monzo meets Nutmeg Pre-register here.

Much better Adventures - Seedcamp backed adventure travel startup. Pre-register here.

Rumoured campaigns👂

An Index-ventures backed european startup... (more to come on this soon hopefully - remember, it's just a rumour!)



Crowdfeed labs🔬

Thanks for reading! As always, please don't hesitate to give your feedback on this post. Also, If their are any startups/campaigns you'd like a research post on, please let me know. 🤗

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