Platforms to merge
Murray choice Seedrs seeks cuts in Crowdcube deal
Andy Murray has invested through Seedrs
Seedrs, which formed a strategic partnership with Scottish tennis ace Andy Murray, says its merger with rival investor platform Crowdcube will allow the two loss-making services to cut costs and deliver new services to investors and companies.
The two firms said the merger, which will be structured as an acquisition of Seedrs, will create “one of the world’s largest private equity marketplaces”.
Murray has used the Seedrs platform to invest some of his winnings in a portfolio of early stage British tech companies, including Perkbox and WeSwap.
Seedrs revealed today that it made a £4.6 million loss last year on a revenue of just £4.2m. There was a 20% drop in platform activity on the platform in the early part of this year.
Crowdcube also made a loss of £2.47m for the year ending 30 September 2019 on revenue of £7.7m.
Its losses fell by 13% compared to 2018, but a 2020 decline in launches, funding and investment could impact on this year’s figures.
The merger, which is expected to be completed later this year or early 2021, is subject to approval by shareholders, as well as the Financial Conduct Authority and the UK Competition and Markets Authority, which could block the tie-up on grounds of a monopoly.
Both firms were founded after the 2008 financial crisis. Analysts currently value Crowdcube at £84m and Seedrs at £56m. Crowdcube shareholders will own 60% of the combined company, and Seedrs shareholders the remaining stock.
In a joint statement issued yesterday the companies said: “The combined company will aim to deliver new innovations and products that will make it significantly easier, more affordable and valuable for ambitious businesses to raise growth finance, and for investors to have an even greater selection of investment opportunities with richer investment tools.”
Following the merger, Seedrs boss Jeff Kelisky will become chief executive, while Crowdcube’s co-founder Darren Westlake will serve as executive chairman of the combined business.
The firms have not yet announced how they plan to combine their teams, customers, brands, services or technology.