On the basis of what’s good enough for its customers is good enough for itself, London-based crowdfunding start-up Seedrs has just raised £750k for its own expansion through its own platform. This was 50% more than the £0.5m mooted yesterday when the company revealed its fundraising plans. The investment puts a nominal value of £5.2m on Seedrs’ business.
This is an interesting move considering that Seedrs raised £550k from angel investors in March 2012 and a further £450k in May that year from DFJ Esprit, Digital Prophets along with a number of angel investors. At the time Mark Hunter, co-founder and CEO of UK-headquartered SAP shop Axon, joined Seedrs as a ‘board observer’ (Hunter sold Axon to HCLTechnologies in 2008). Good example of bootstrapping I would say!
Clearly crowdfunding has taken a firm grip as an alternative source of funding for start-ups (e.g. see Clear Books growing with the crowd). The attraction for start-ups is the simplicity and relatively low cost (Seedrs charges start-ups 7.5% of funds raised). The challenge is managing an investor base which can typically reach into the several hundreds. For investors it is, as always, ‘caveat emptor’.