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Alternative Finance blog


The state of UK Equity Crowdfunding

The state of UK Equity Crowdfunding

1 month ago


Beauhurst have stated that equity investment into high growth UK firms is up this year. In their latest update, they said that May saw “an unusually large amount invested” and that June was higher still. The numbers are in part fuelled by some very large deals; in May ‘Improbable’ raised £389 million and in June FarFetch raised £311 million. Of course, large deals aren’t the norm in crowdfunding, although they are becoming more common place, so it is important to note the number of deals which Beauhurst believe increased from 96 to 110, with an average deal size of £9.2 million. One platform dominated this deal activity – Crowdcube – which participated in 15 investments in June, with Seedrs and VentureFounders each participating in 4. If you look at businessagent.com’s equity crowdfunding stat’s page you’ll see quite how much Crowdcube dominate.

 

This is all good news for British businesses and for investors. Equity crowdfunding still represents a small percentage of the routes used to raise capital by small businesses in the UK, meaning there is plenty of scope to increase these volumes further and for businesses seeking capital these results should be encouraging. Look behind the figures and it is evident that professional investor participation in crowdfunding is increasing – highlighting that they believe equity crowdfunding represents interesting growth potential (although it should be noted that the sums being invested are very small for this sector and represent a small toe being dipped into new waters).

 

The UK Regulator, the Financial Conduct Authority (FCA), will also be examining these figures with interest. A report is imminent from the Regulator and at businessagent.com we expect that they will highlight the increased participation of professional investors. The FCA will want to be sure that the deals and information on offer to professional investors is the same as that offered to the greater crowd. If they aren’t then the FCA will take steps, through regulation, to ensure that it is – meaning they will force increased transparency in the market.

 

At businessagent.com we are fans of transparency. It is needed to make markets more efficient, to help investors make informed decisions and to aid comparison. The Tools that we offer our users and the free summary Crowd Rating ratings that we offer for relevant equity crowdfunding pitches are all designed to increase transparency and make it easier for any investor, professional or not, to make an informed investment decision.

 

If you want to see the latest crowdfunding pitches available across the UK’s equity crowdfunding pitches you can do so in one easy click: https://businessagent.com/crowdfunding/all


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