Ritten’s biggest crowdfunding platform Crowdcube is eyeing a major expansion in Europe and could one day put the company’s stock on the blockchain after raising £10 million from a US cryptocurrency business.
US Business Circle is backing the crowdfunding platform, which has helped BrewDog, Revolut and Mindful Chef raise money from small-time investors. Existing investors Balderton and Molten also participated in the funding round.
Circle owns SeedInvest, a similar startup funding platform in the US. Crowdcube boss Darren Westlake told Standard that the investment grew out of his business and a partnership between SeedInvest. The pair have partnered in the past to offer dual listings for startups looking to raise cash in both the UK and the US.
“We have known SeedInvest for a long time,” Westlake said.
The investment from Circle follows the collapse of merger talks with rival UK platform Cedars earlier this year. The deal was blocked by competition watchdog, a decision that raised questions about the future of both businesses.
Westlake said CrowdCube has done “incredibly well” since then and became operationally profitable earlier this year. They decided to raise funds for expansion in Europe after the rules changed, which meant companies could raise up to €13 million from retail investors in Europe.
Crowdcube spoke to “all the usual suspects” about the investment before being contacted by Circle.
While Circle operates SeedInvest, it is best known for cryptocurrency. Founded in 2013, the Goldman Sachs-backed startup originally worked on crypto payment products but has found success with a ‘stablecoin’ – a cryptocurrency pegged to the dollar. Its USDC stablecoin has a circulation of $33 billion. Is
Westlake said Crowdcube shared with Circle a “long-term” vision that “capital building and company building is going to be Internet core.” He added that Crowdcube may be looking at flagging equity in the future, but added that it was an idea that was probably 10 years old.
Ryan Feet, Director of Circle and CEO and Co-Founder of SeedInvest. “The expansion of online fundraising to new markets creates a huge opportunity for internet native capital formation.”
For now, Crowdcube is expected to be fully licensed to operate throughout the European Union by the end of the year, raising the prospect of a pan-European investment platform.
“I think it’s huge,” Westlake said. “I think we can double or even triple the size of our business very quickly.”
Crowdcube has grown from 70 employees last year to 110 and is expected to reach 200 by the end of next year.
The company, founded in 2011, was valued at £140 million in its latest investment round. It has raised £30 million from investors so far. More than £1 billion has been invested on its platform, including £200 million over the past year.
Investing from SeedInvest further increases the likelihood of a potential sale or second merger attempt.
Westlake added: “Who knows – it’s not something we’ve talked about.”