Dundee firm plans further funding
Games firm Tag secures LendingCrowd finance
The Dundee company has been backed by LendingCrowd, chaired by internet entrepreneur Bill Dobbie, after struggling to raise capital from the banks.
Paul Farley, who set up the business in 2006, now hopes to use the finance to conclude a £1 million deal with a private equity company in a couple of months which will involve selling an undisclosed stake in the business.
LendingCrowd’s debt finance was sealed before Christmas but has just been made known as the company embarks on an expansion plan which Mr Farley said would otherwise have been held back.
“The banks won’t touch us. They don’t understand the business,” he said. “We have approached the banks over the years but to get this sort of funding just isn’t possible.
“We would have been six months behind if we had not got the money from Lending Crowd.”
He said that the company is likely to seek a further round of funding in 18 months time.
Mr Farley, 41, left Dundee university part-way through studying architecture and was drawn into the city’s still flourishing games industry.
The initial period was what he called “seat of the pants stuff’, raising capital from its own resources, but the company was profitable by its third year.
Tag has developed games for an international list of clients including Electronic Arts, Ubisoft and MindCandy.
It has created some top-selling games, including Doctor Who and is now hoping that it can generate cash through selling software.
It unveled ChilliSource – a free, open source game engine – at a presentation in London.
ChilliSource is the first product to be launched from Tag’s ChilliWorks suite of tools currently in production, and the company said it marks a “momentous occasion in the game engine’s development”.
LendingCrowd was launched by Mr Dobbie and business partner Stuart Lunn in October. The online crowd lender is aimed at small firms and has already helped businesses raise approximately £250,000.
LendingCrowd operates an order-driven exchange where the most competitive bids fund the loan application, providing the borrower with the lowest interest rate on their loan.
Investors retain complete control over their investment, setting the terms and rates they are prepared to offer businesses. Investments on LendingCrowd’s platform start from as little as £20 and an independent risk assessment, carried out by an expert team of credit risk specialists with more than 100 years’ experience, alongside the bespoke assessment tool, ExpertLender, evaluates each loan request on its merits.
The first business to secure a loan via the LendingCrowd platform was Vision Events (Manchester), an event production agency. Its clients include Excel Publishing and The VEKA UK Group. The business successfully raised a sizeable fund to purchase essential technical equipment this month.
Some 7,000 SMEs have used crowdlending platforms to access loan finance in the UK which is expected to top £1 billion by the end of 2014.
Mr Lunn, chief executive, said: “Our aim is to offer a convenient and flexible alternative for SMEs to secure credit and grow their business.”