Chan­nel 4 backs Crowd­cube in its £8.5m fund­ing round

The Daily Telegraph - Business - - Technology Intelligence - By Han­nah Boland

CHAN­NEL 4 has thrown its weight be­hind crowd­fund­ing site Crowd­cube, join­ing a £8.5m fund­ing round.

The broadcaster is in­vest­ing through its com­mer­cial growth fund, to­gether with ven­ture cap­i­tal firms Draper Esprit, which led the round, and Balder­ton Cap­i­tal. Draper Esprit ac­counted for £6m of the to­tal £8.5m round. Crowd­cube said it is plan­ning to launch a crowd­fund­ing cam­paign later this month, through which the pub­lic will be able to in­vest. It did not dis­close how much it was look­ing to raise, but said this would “sup­ple­ment” the in­sti­tu­tional in­vest­ment.

The cash will help to “ac­cel­er­ate our jour­ney to prof­itabil­ity and ex­pand faster in the UK and over­seas”, it added. Crowd­cube is plan­ning to be prof­itable next year.

Jonathan Al­lan, Chan­nel 4’s chief com­mer­cial of­fi­cer, said: “Crowd­cube is the per­fect fit for Chan­nel 4’s com­mer­cial growth fund in­vest­ment. We both share a de­sire to sup­port emerg­ing tal­ent and dis­rupt the sta­tus quo.”

Fol­low­ing the in­vest­ment, Crowd­cube said it would be rolling out its first na­tional ad­ver­tis­ing cam­paign next year, as it seeks to grow the num­ber of re­gional busi­nesses us­ing its site for fund­ing.

About 60pc of the amount in­vested on Crowd­cube this year has gone to com­pa­nies out­side London.

The lat­est raise comes amid ac­cel­er­at­ing growth at the busi­ness, and in the third quar­ter of this year rev­enue was up 60pc on the prior year at £1.6m. Crowd­cube has said it ex­pects to post an­nual rev­enue of £6m for 2018, com­pared with £3.9m for 2017.

Since Crowd­cube was founded in 2011, it has funded more than 750 deals, and more than £500m has been in­vested on its plat­form. Busi­nesses rais­ing funds on its site have in­cluded brewer BrewDog, mo­bile-only bank Monzo and soft-drink maker Caw­ston Press.

How­ever, un­like other crowd­fund­ing web­sites, Crowd­cube of­fers peo­ple eq­uity in busi­nesses, and not just early ver­sions of prod­ucts, mean­ing the pub­lic may be able to sell shares at a later date if a busi­ness was, for ex­am­ple, bought or de­cided to float.

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