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Crowdfunding update #9 November 2020

News 📰

Sorry to all about the wait for this one. There's been so much news I can't keep up! As always, some exciting bits and pieces to share!

Revolut Founder Nikolay Storonsky has made headlines as the UK's first startup billionaire. Revolut also had buzz around their newly launched 4.5% bonus interest on US accounts, and a new subscriptions feature that rids users of pesky forgotten direct debits.

Bloombox club (Plant delivery startup; Think 'Patch Plant's' or 'Bloom & Wild's' little brother) was acquired for £8m, having raised ~£250k at ~£2.3m pre-money just over 2 years ago.

Freetrade (commission free share dealing app) are slated to launch their pension account (SIPP) later this year, or end of Q1 2021 at the latest. At £10/month (£7/month for freetrade premium users/subscribers), it will be one of the cheapest offerings on the UK market.


Gohenry (challenger bank for kids) may have some exciting announcements to make in the coming weeks.. 👀

Platform Updates

As some of you might already know, Crowdcube and Seedrs are merging. This confirms rumours from update #6. The resulting company will be valued at ~£140m (60% Crowdcube, 40% Seedrs). Jeff Lynn, Co-founder of Seedrs, will leave the resulting company after 11 years as CEO/Chairman, but he is keeping his equity stake.

🤔I'm very keen to here everyone's thoughts on this. Bad or good for the consumer/investor? Bad or good for startups? Please share your thoughts in the comments. 👇

Speaking of Crowdcube, they had a record quarter in Q3 this year, realising £2.6m in revenue compared to their previous record of £2.6m in Q4 2019. Crowdcube also reached a milestone of 1m registered users. Oh, and did I mention they released a nifty search feature on their portfolio page?:

As for Seedrs, they have launched their 'pre-emption club', having started with a pre-emption campaign for a british agtech startup that has since closed. The 'pre-emption club' allows Seedrs users access to pre-emption campaigns, even if they aren't existing investors. I do not believe they have any campaigns live at the moment, but I will keep everyone posted on updates.

💡 Regulatory News alert: The FCA's (The UK's financial regulator) American twin sister, the SEC, raised the maximum amount startups can raise without effectively going public/issuing a prospectus from $1M to $5M. This follows the SEC imposing less restrictions on what qualifies for 'accredited investor' status in the US earlier this year. Although the US is 'home' to venture capital, their crowdfunding market is relatively poor compared to the UK's, owing to restrictive regulations (e.g. JOBS act), the SEC's recent plans are intended to bolster US crowdfunding and drive startup access to capital.

Private Live Campaigns 👤

Dozens/project imagine - Challenger bank known for their 5% 'bonds'. Invest here.

Assetz Exchange - Property crowdfunding platform (downround). Invest here.

Freddie's Flowers - (Flower delivery startup, think 'Patch Plant's' or 'Bloom & Wild's' twin brother) raising off-platform and via mini-bonds (i.e. debt not equity). Invest here

Festicket - Expedia but for Music Festivals. Existing investors only. 😔

⚠️ Warning! Private/pre-emption campaigns, such as those above, often don't have much information available. This is because the raises are intended for existing investors who have been kept informed of business developments anyway. More so, retail or so-called 'mini-bonds' (as above for Freddie's flowers) come with their own, unique risks and I advise doing your own research before investing.

Upcoming Campaigns 📆

Truth be told, there are more upcoming campaigns than I can count at the moment, but here is something of a curated list:

Reflex Vehicle Hire - B2B Van/Car hire company with £38m in revenue, growing profits (you heard right, profits!) 60% YoY and paying a 2.5% dividend (you heard right again, dividend!). Pre-register here.

Perlego - Spotify for Textbooks. Backed by Alex Chesterman (Founder of Lovefilm, Zoopla and Cazoo)

Mintos - Europe's largest P2P lending marketplace. Pre-register here.

Celtic Renewables - Renewable energy startup; makes car fuel from Whisky waste. Pre-register here.

Laka - Bike insurance startup backed by LocalGlobe (backers of Zoopla, Transferwise and Tide Bank). Pre-register here.

GeoDB - Blockchain/Big Data startup. Pre-register here.

Genuine Impact - Stock research app. Think Freetrade meets Wikipedia. Pre-register here.

Crowdfeed labs🔬

Unfortunately, due to an early campaign close, I had to abandon my wirex blog post, but you can see my TL;DR below:

To elaborate on the above, the highlight/biggest red flag for me was that Wirex were being quite liberal with their accounting (that is not to say you should or shouldn't have invested);

e.g. let's say a wirex user deposits £1k to purchase something in bitcoin. The £1k is converted to bitcoin before payment, and Wirex take a ~£30 in fees for that conversion and/or payment.

Wirex are claiming £1k as their revenue, rather than the £30. Wirex's justification is that they are the 'principal' rather than an 'agent' in the transaction. This is technically true, but expressing revenue in this way doesn't reflect true business performance in my opinion; I would be more inclined to refer to the £1k as 'sales'. I saw similar accounting practices in their profits, too.

Thanks for reading! Please do let me know your thoughts on this post in the comments below. Feedback is always appreciated too! 🤗


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