We have launched a campaign to secure more equity funding deals for startups and growth businesses outside London, in partnership with six leading supporters of regional SMEs. We are aiming to double equity funding deals in the regions within five years.
We share a belief with our six partners that the combination of technology, networks and regional funding expertise offers a powerful way to boost SME growth in the regions. Working as a team, we will engage with regional SMEs, advising them on their suitability for crowdfunding and co-investment, share information appropriately, and work with them to help them launch funding rounds on our platform.
The partners working with us are:
- G by Grant Thornton
- Harper Macleod
- Techstart Ventures
- Virgin StartUp
We will also connect SMEs to tens of thousands of locally-registered investors among its membership, helping these ‘micro-angels’ invest in their local SMEs. Additionally, we will assess recommendations from local investors who wish to refer SMEs to Crowdcube and our partners.
Doubling equity funding deals in the regions in five years is an ambitious target, but it reflects the shared commitment Crowdcube and our partners have to driving change. Working together makes all of our networks, technology and access to funding much more powerful. There is brilliant entrepreneurial talent and dedication across the country - we’re going to free more of that potential.
Simon Calver, Head of BGF Ventures, said: “Whilst we see many great companies in London and the South East, we must ensure that the UK’s increasingly vibrant regional economies can also support more fast-growing companies and entrepreneurs. With 12 UK offices, BGF’s regional commitment matches Crowdcube’s ambition to accelerate the growth of more earlier-stage companies, wherever they are in the UK, with funding, advice and support.''
Sarah Abrahams, Head of Growth Finance at G by Grant Thornton, said: “Given crowdfunding is now established as a mainstream source of finance, we are proud to be addressing the critical funding gap for small businesses looking to raise finance for growth through our Crowdfunding Ready service together with Crowdcube. With Grant Thornton's powerful global network of more than 47,000 people in over 130 countries and Crowdcube's 500,000-strong crowd of investors, we are excited to be working with Crowdcube, in support of entrepreneurs at a local, regional and national level.”
Andrew Hutchison, Head of Strategy Virgin Startup, said: “With London’s ever-increasing proportion of investments into high-growth private companies now surpassing 50%, there is clearly a pressing need for more focus on, and support for, the regions. We are well aware from our experience that there are thriving startup ecosystems all over the country but they currently lack the support and resources that are enjoyed by entrepreneurs in London – so we are thrilled to be partnering with Crowdcube on this timely national initiative.”
While the proportion of regional equity funding deals launched on the Crowdcube platform increased from 38% in 2016 to 50% in 2017, the overall picture is of London increasingly dominating SME equity fundraising deals from all sources. Data from the research firm Beauhurst shows there were 328 regional funding deals in 2011 compared to 160 for London, while in 2014 the figures were 770 and 629, and in 2017 the figures were 736 and 769, with London having overtaken the regions during the year.
Our experience points to the great potential of regional startups and growth businesses, and the difference equity funding can make. Regionally-based companies that have funded on the Crowdcube platform include:
- Aviva Ventures-backed Cocoon, the high-tech home security system supplier based in Leeds, which raised £2.39m on Crowdcube in March 2017
- Money Dashboard, the free Edinburgh-based online personal financial management service, which raised £1.25m on Crowdcube in August 2017
- Vibe Tickets, based in Preston, Lancashire, which raised £609,000 on Crowdcube in September 2016, 47% of which was from investors who live in the North West
- WITT Energy, based in Plymouth, which has developed technology to convert motion into electricity, raised £2.39m from over 1,500 investors on Crowdcube in March 2016
- Wild Beer, a brewery based in Somerset, raised £1.76m from more than 1,900 investors on Crowdcube in March 2017
- Based in Northern Ireland, See.Sense, an award-winning cycling technology and data company, raised £711k in July 2016 on Crowdcube. Venture capital firm Techstart Ventures also invested alongside Crowdcube investors in this round.