Crowdcube has raised in £8 million in a mixture of venture capital and money raised from 3,700 investors through its own crowdfunding platform.
The firm, which recently powered challenger bank Mondo‘s fundraise – reportedly the fastest £1 million ever raised on a crowdfunding platform – is an equity crowdfunding platform where people can invest in companies for a stake in the business.
The firm now also wants to make it possible to sell those shares back. It says it is planning to use the new funding for growth, as well as developing a secondary shares marketplace where shareholders in UK private companies can sell their stake. This means the time shareholders can make a return is not limited to big exit events like IPOs.
Until recently, more restrictive laws in the US enabled the UK to make a name for itself in the equity crowdfunding space, with other high profile platform including Seedrs (which powered challenger bank Tandem’s recent fundraise).
Crowdcube picked up £1 million from Balderton Capital, which is investing in the business for the third time and backs other fintech players including wealth management platform Nutmeg and direct debit challenger GoCardless.
Glasgow’s Brewdog company is another high profile company that has raised money on the platform.
— Crowdcube (@Crowdcube) August 17, 2016
Crowdcube says this raise is the 41st on the platform higher than £1m. It is the fourth time the firm has raised money from investors on its platform, which now number a total of 300,000.
The company says it was able to raise more than the €5 million limit set by current EU rules because it published a prospectus. It says 82% of investors has previously backed companies on the platform.
The funding round totalled $61m, and will used to finance the company's global expansion plans.
Monzo also revealed its latest funding round last week.
A further £2.5m is expected to be raised from crowdfunding on Tuesday.
Funding Circle has perhaps started 2017 in a better way than most. The London-based lending platform that connects small businesses with investors has raised $100m (£82m) in equity investment.