Channel 4 backs Crowdcube in its £8.5m funding round
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.