Seedrs has retained its crown as the UK’s most active investor in private companies throughout 2016. With more than £85 million invested into campaigns on the platform and 159 deals funded in 2016, the Neil Woodford-backed investment platform has seen another year of impressive growth. The British fintech company has now been live for four-and-a-half years and recently surpassed £190 million invested into campaigns with more than 450 deals funded since its launch.
October marked the platform’s biggest ever month with almost £20 million invested into campaigns, £4.35M of which was invested into employee and customer engagement provider, Perkbox, becoming Seedrs’ biggest fundraise since launch. In the same month almost 3,000 Seedrs investors backed peer-to-peer travel money platform,WeSwap, raising over £2.4M and setting the record for the most investors in a single campaign
2016 was also the year of co-investment, with a host of leading institutions or strategic partners investing alongside the crowd, highlighting a growing trend by VC firms to lead or support crowdfunding rounds on Seedrs. These included Draper Esprit into Perkbox, Ascot Capital into WeSwap, Zoopla into Landbay, Unilever Ventures into blow Ltd, JamJar Ventures into SuperCarers. Other campaigns received investment from Passion Capital, IW Capital, Techstars, Seedcamp, Tesco Backit and TrueStart, among others.
Simon Cook, CEO, Draper Esprit added: “We are strong believers that VCs, angels and the crowd can work together to provide the right long term patient capital to the best entrepreneurs, empowering teams to build global companies that last.”
2016 also saw Seedrs release the first-of-its-kind Portfolio Update with methodology validated by EY and following International Private Equity and Venture Capital (IPEV) guidelines. It provided a comprehensive analysis of all Seedrs deals and their performance.. From the 375 Seedrs deals across 15 sectors that had been completed between launch and 30 September 2016 (the period covered by the most recent version of the report), the data showed a platform-wide IRR of 14.4% (non-tax adjusted) and 49.1% IRR (tax adjusted). Seedrs was applauded by a number of industry bodies for leading the field in transparent reporting into early stage investment. The results inspired wide discussions in the finance space around the great potential of early-stage equity as an asset class and the role equity crowdfunding is playing in democratising investment previously reserved for the professional investor.
Seedrs investor Robin Vaudrey, Head of CEE Region at the European Investment Fund (EIF) says: “My work at the EIF, the largest investor into European venture capital, has brought me close to the cutting edge of European technology and innovation, but until I came across Seedrs the opportunity to personally invest in such exciting new ventures did not exist given the traditional barriers to investing in private companies. I find the investment propositions attractive even without any additional tax incentives, as I am resident on the Continent and not a UK taxpayer. I find the level of professionalism of other investors, fundraising entrepreneurs, and the platform itself, to be very high. I’m particularly pleased Seedrs uses private equity industry best practice for valuations.”
The nature of the early-stage investing is long term, and Seedrs investors are aware that potential returns on their investments are likely to take five to seven years minimum. However, many of the earlier funded Seedrs companies are already showing meaningful success, with 2016 being a transformative year for some. FreeAgent became the first-ever UK equity crowdfunded business to IPO, giving Seedrs shareholders liquidity on a public stock exchange. Meanwhile, Veeqo acquired ParcelBright and went on to raise a Series A round, as did Satago, blow LTD, Poq and POD Point. House of Fraser announced plans to invest £35M into challenger bank Tandem and Landbay partnered with Zoopla to launch an investment channel for buy-to-let mortgages; Landbay was also one of the first p2p companies to be granted full authorisation by the FCA, paving the way for the launch of a property backed Innovative ISA.
Jeff Lynn, CEO and Co Founder of Seedrs: “2016 has been the biggest year ever for Seedrs with an unprecedented amount of capital invested into 159 inspiring deals . In late summer, we continued our European expansion, despite the outcome on Brexit, opening offices in Berlin and Amsterdam. In September we released our inaugural Portfolio Update to illustrate to our investors the performance of their early-stage investment portfolio and in November we had the first ever IPO for a Seedrs crowdfunded business,by FreeAgent.
“The on-going success of many of our portfolio companies is exactly why equity crowdfunding is instrumentally important to the future of the early stage investment and why sophisticated investors should be looking at this asset class as a part of their broader investment portfolio in 2017.”
2017 Trends: the Seedrs team has predicted a few trends for the startup ecosystem in 2017:
1. Futuristic innovators within: DataTech ‘deep learning’, AI ‘machine learning’, DigiSec ‘digital security’ and DataSec ‘data security’. These technologies will automate the mundane and provide a more personalised experience for the everyday consumer – think ‘Chatbot Tech’ such as Personal Assistant Bots, and Personal Finance Bots – which will be mainstream and seamlessly incorporated into everyday life in 2017.
2. Traditional sectors will continue to inspire new startups that use tech to streamline and solve age-old problems. Brands like SuperCarers innovating the care sector, blow LTD innovating the beauty space, Veeqo disrupting global distribution channels.
3. Macro trends sparked by global uncertainty due to political shifts, climate, terrorism and such like, will inspire investors to look at ambitious ‘social enterprise’ startups that make a difference in addition to generating future returns.
4. Continued evolution and growth in the Proptech and Fintech sectors.