Crowd fundraising platforms Crowdcube and Seedrs are set to merge in a move that will create one of the world’s largest private equity marketplaces.
The merger is expected to be completed by early 2021 at the latest.
Both companies have played a role in the growth of Europe’s equity funding ecosystem. Some £2 billion has been invested in campaigns on Crowdcube and Seedrs between them.
The two firms have helped a combined 1,500 companies secure investment, including well-known names such as BrewDog, Revolut, and Perkbox.
The merger will be structured as an acquisition of Seedrs Limited’s outstanding share capital by Crowdcube through a scheme of arrangement, with shareholders and option holders of the new company being split 60/40 in Crowdcube’s favour.
This is derived from approximate valuations of both companies based on their most recent fundraising rounds.
Darren Westlake, CEO and co-founder of Crowdcube, and soon-to-be CEO of the combined company, said: “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.
“Together with Seedrs, we can accelerate plans to further expand in the UK and overseas, launch innovative new products and improve our customers’ experience.”
Jeff Kelisky, CEO of Seedrs and soon-to-be executive chairman of the joint business said: “We are both fintech pioneers that have challenged the landscape of capital raising in Europe, building marketplaces for private equity investment. We believe that you need to be a player of greater scale to serve companies and the investors who support them.
“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 of private company investing.”
The deal is subject to approval from shareholders, the Competition and Markets Authority (CMA), and the Financial Conduct Authority (FCA).
Both businesses will continue to operate as usual until the finalisation of the process at the end of 2020 or start of 2021.