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Investing without borders: Crowdcube receives European authorisation

By Mark Tyler, General Counsel. 20th Apr 2022

European licence cover image

It is an exciting time for European crowdfunding. More unicorns across the continent are keen to champion inclusion from the very top down by turning their customers into shareholders – having them on their cap table. This is propelling notable growth, with the European crowdfunding market predicted to be $5BN by 2025.

Before 2021, equity crowdfunding was fragmented across Europe, making it impossible for European businesses to raise capital across borders in multiple markets. Under the new EU regulations, any European business can now raise up to €5m from European investors, enabling them to turn their customers into shareholders and access new markets.

We’re proud to be part of the UK equity crowdfunding market, a global leader in connecting retail investors with the most exciting high-growth companies. But while Crowdcube was founded in Britain, we have always had European investor interest on our platform. That’s why we are delighted to announce that Crowdcube has become the first equity crowdfunding platform to be granted a European Crowdfunding Service Provider authorisation.

Issued by the Spanish regulator, the Comisión Nacional del Mercados de Valores (CNMV), this licence allows European businesses to use Crowdcube to raise capital from our million-strong community across the continent, under one set of rules.

What’s more, retail investors can get access to even more incredible businesses in the same way and with a level of investor protection that didn’t previously exist.

A continent-wide approach to crowdfunding

Until now, the crowdfunding market across the continent has been localised, with companies tending to choose platforms within their own country to raise capital and retail investors taking a similarly restricted approach.

This is because, until now, a crowdfunding platform wanting to operate across Europe would need to navigate a complicated map of national laws that apply in each country across the continent, covering crowdfunding activity, corporate law and the marketing of offering shares. Companies and crowdfunding platforms wanting to enter new European markets have had to undergo the complicated and time-consuming process of doing so on an individual, country-by-country basis.

However, from 10th November 2021, new European Crowdfunding Regulation came into effect, unifying crowdfunding rules across the continent. This is good news for founders and retail investors alike, saving time, money and a lot of potential confusion.

With the backdrop of this new regulation, and now having been granted a European authorisation, Crowdcube has the opportunity to build a pan-European marketplace – the first crowdfunding platform to be able to do so.

Democratising capital across Europe

This is tremendously exciting for European business and retail investors alike, bringing down regulatory and geographic barriers to allow capital to flow between companies and individuals. Businesses across the continent will gain far greater access to equity crowdfunding, exposing them to opportunities to raise investment of up to €13m (€8m from UK retail investors and an additional €5m from retail investors across the rest of Europe).

European retail investors will be able to invest from wherever they’re based in companies across Europe, marking a groundbreaking shift towards genuine financial inclusion.

Collaborating to make change happen

We could never have gained our licence at this point without the active and enthusiastic support of the Spanish regulator, the CNMV. Every regulator has to issue these permissions under their local regime – no easy feat when it has never been done before. The CNMV has understood Crowdcube’s value from the start, and spent a lot of time getting to know our business. Together we have pushed forward to put Spanish crowdfunding and fintech at the forefront – a testament to how proactive and forward thinking it is as a regulator.

So, why Crowdcube? Well, while the news is recent, it has been a long time in the making. Over the past two years, people across the Crowdcube team have put immense effort into meeting the criteria for a European licence. We are – we hope, justifiably – proud of achieving our goal at such an early stage in Europe’s crowdfunding journey. By doing so, we’ve opened up the field for the next generation of licensees, much like we’ve done in the past for the UK market. Crowdcube has been built on a history of firsts, and we are thrilled to be entering this new chapter.

Risk warning

Investing in start-ups and early-stage businesses involves risks, including illiquidity, lack of dividends, loss of investment and dilution, and it should be done only as part of a diversified portfolio. Crowdcube is targeted exclusively at investors who are sufficiently sophisticated to understand these risks and make their own investment decisions. You will only be able to invest via Crowdcube once you are registered as sufficiently sophisticated. Please click here to read the full Risk Warning.

Crowdcube is authorised and regulated by the Financial Conduct Authority (FCA) and the Comisión Nacional del Mercado de Valores (CNMV). This page has been approved by Crowdcube. Pitches for investment are not offers to the public and investments can only be made by members of crowdcube.com on the basis of information provided in the pitches by the companies concerned. Further restrictions and Crowdcube's limitation of liability are set out in the Investor Terms and Conditions.

Investment opportunities are not offers to the public and investors must be eligible Crowdcube members. Please seek independent advice as required as Crowdcube does not give investment or tax advice.