Crowdcube and Seedrs agree merger

Crowdcube and Seedrs today have agreed terms for a merger, in a move that will combine two of the UK’s largest crowdfunding platforms.

The deal will accelerate the companies’ plans to create the world’s largest private equity marketplace and aims to further democratise investment in startup and scale-up companies across the UK.

In a statement, the companies said that by joining forces, thousands of ambitious fast-growth businesses and millions of investors will be able to benefit from the expertise, services and returns offered by their respective investment platforms.

The two companies have facilitated crowdfunding campaigns for 1,500 companies, with a total of £2 billion invested since 2011.

The combined company aims to deliver new innovations and products that will make it easier, more affordable and valuable for businesses to raise growth finance, while investors will have a greater selection of investment opportunities and investment tools.

Companies to have launched funding rounds include Brewdog, Revolut, Perkbox. In the last six months they have both raised significant milestone, including Crowdcube’s campaigns with what3words and Moneybox - two of the most popular equity crowdfund campaigns ever - and over £1 million of private company shares traded in a single month on the Seedrs secondary market.

On completion of the deal, Seedrs’ chief executive Jeff Kelisky will serve as chief executive
of the combined company, while Crowdcube’s chief executive Darren Westlake will serve as executive chairman. The management team will include key leaders from both businesses.

Westlake commented: “Today’s agreement is an incredibly exciting milestone that will benefit high growth businesses, their investors who believe in their vision and the wider entrepreneurial ecosystem that supports them.”

Kelisky added: “Now is the right time to bring our strengths together, in order to meet our common mission to deliver a step change in the accessibility and efficiency within private company investing.”

The merger will be structured as an acquisition by Crowdcube of all of the outstanding share capital of Seedrs via scheme of arrangement.

Existing Crowdcube shareholders and option holders will own 60 per cent of the combined company, and existing Seedrs shareholders and option holders will own 40 per cent of the combined company.

The merger ratio reflects the approximate valuations of the two companies based on each of their most recent fundraising rounds.

Following completion, the companies will work together to define how the two businesses will combine their teams, customers, brands, services and technologies.

The transaction, due to be completed in late 2020 to early 2021, is subject to regulatory approval and the shareholders of the two companies.

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