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The Funded Club: where are they now?

It will be a welcome sign to crowd investors, which are forecast to invest over £130 million in 2016 alone, that crowdfunded companies are outperforming traditional success benchmarks according to a recent report from AltFi Data.

To give our 300,000-strong crowd of investors a clearer view of Crowdcube’s portfolio of funded businesses, we take a look at the underlying information behind AltFi Data’s ‘Where are they now?’ report.

 

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Data source: AltFi Data

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Crowdcube has already delivered financial returns to investors; with three of the five exits highlighted in a report coming from businesses to raise on Crowdcube.

  • E-Car Club, the UK’s first entirely electric car sharing club for businesses and communities, raised £100,000 from 63 investors on Crowdcube in 2013. In what was the first full equity crowdfunded exit, E-Car Club was acquired to Europcar, Europe’s leading car rental and mobility company in 2015.
  • Camden Town Brewery, one of London’s biggest breweries, raised £2.75m on Crowdcube in 2015, following investment from over 2,100 investors. Just eight months later the company was acquired by AB InBev, the world’s biggest drinks company, delivering investors a multiple return on their investment.
  • Equity investors on Crowdcube received their third return in 12 months following the sale of disruptive global DIY fashion brand Wool and the Gang by BlueGem Capital Partners, which has also invested in the likes of Liberty London and Mamas & Papas.

In the form of exits, follow-on rounds of funding and businesses are showing no signs of distress, we’re seeing success for the vast majority of companies to fund on Crowdcube according to the report. An encouraging sign that shows crowdfunded businesses bucking the high failure rates often reported among early-stage businesses.

Some examples include:

JustPark, winner of App of the year 2015

JustPark, which raised £3.5m from 2,702 investors in March 2015, has been given a ‘Green’ status by AltFi Data. JustPark is taking parking to the digital era by giving drivers instant access to over 150,000 parking spaces across the country. Find out more about the VC-backed company, take a look at its company page on Crowdcube.

 

silkfred-200x150SilkFred, a marketplace for independent fashion brands which raised £145,000 from 70 investors in October 2013, has been given a ‘Green Plus’ status by AltFi Data. The company has reported year on year growth of 500% and now has over 290 retailers selling through its site. Take a look at SilkFred’s story so far here.

 

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Pip & Nut, which produce a range of nut butters that are stocked in leading retailers including Selfridges and Sainsbury’s, raised £120,000 in September 2014 thanks to investment from 81 people. Pip & Nut has been given a ‘Green Plus’ status by AltFi Data. For more information about the company, take a look at our recent blog Pip & Nut in a nutshell.

 

The majority of crowdfunded businesses are in rude health, however, there will, of course, be some businesses that don’t succeed. AltFi Data have given 37 Crowdcube funded business a ‘red’ status, of those, 26 are no longer trading.

Whilst the failure of any business is disappointing it should be viewed in context: statistically 50-70% of early-stage businesses fail according to the Financial Conduct Authority.  Fortunately, 94% of the businesses to fund on Crowdcube are still trading. Equity crowdfunding investments are high-risk and unfortunately, not all businesses will be able to give investors an opportunity to exit – like E-Car Club or Camden Town Brewery – so it’s important investors consider the risks and invest as part of a diversified portfolio, which we make very clear to investors on Crowdcube.

However it’s great to see both multiple exits, and a string of businesses raising further investment, delivering a healthy return for investors. The report claims an average internal rate of return (IRR) of 8.55% across the industry, which rises to over 19% with EIS and SEIS tax relief. With Crowdcube’s portfolio of funded businesses achieving the highest IRR of 13.27% (increasing to 25.75% with EIS and SEIS tax relief), when compared against the industry’s biggest players, according to AltFi Data’s findings.

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Data source: AltFi Data

You can download the full ‘Where are they now?’ report from AltFI Data here.

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