City comment: Seedrs sale to Republic has the CMA’s finger prints all over it

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Is Britain’s competition watchdog really helping Britain? Selling seeders is not recommended.

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Seeders, a leader in crowdfunding, is selling itself to US investment start-up Republic for $100 million.

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Rewind to October 2020 and the Seeders were about to merge with their nearest rival, Crowdcube. Both were major players in the crowdfunding market, but less so than investment banks and other businesses that arrange funding.

The Competition and Markets Authority put Kibosh on the merger plan, although Cedars and Crowdcube said they needed the deal to support themselves. The watchman stood firmly. The pair called off the deal in March, raising fears about their future.

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Crowdcube recently raised $10 million from an American business, and now Cedars has sold it to Americans. It’s not inconceivable that Crowdcube could go down the same path.

Politicians lament that there is no British Google. Why show such cases.

CMA took a very narrow view on the deal and ended up trying to scuttle a promising start-up that was trying to scale. The watchdog may also have placed the seeders on a plate.

To be fair to CMA, it is taking action against real giants like Facebook. This week it ordered it to be sold to Giphy.

But Sentinel ignores global dynamics when it comes to home businesses.

The Financial Conduct Authority is being asked to consider Britain’s global competitiveness when policing banks. The CMA should do the same.

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