Crowdfunding platform SyndicateRoom is doing a second crowdfunding round on its own website to fund its expansion into the public markets.
SyndicateRoom is hoping to raise at least £2.3 million at a valuation of £25 million. The startup was valued at £9 million in a £1.2 million funding round on its platform last May, which was filled in just 33 hours.
CEO Goncalo de Vasconcelos told BI: “The last round, the valuation was about £9 million, so it’s about 3 times as much. But most of our KPIs [key performance indicators] are 4 and 5 times larger.”
In March SyndicateRoom was rubber stamped by the FCA and the London Stock Exchange to take part in public market offerings, rather than private funding rounds as is usually the case with crowdfunding platforms. It means retail investors can buy into publicly traded share offerings at prices usually reserved for institutional investors, whose size lets them negotiate better deals.
de Vasconcelos says: “Last year we were purely an early stage crowdfunding platform. This time, we’ve got far more exciting developments. We are the only crowdfunding platform that has been approved by the FCA to take part in main market IPOs and placings. That is a much, much larger market than just crowdfunding.
“The money we raise is mainly to find more really, really good people and focus on that side of the business. We are 22 [staff] and we are planning to double that over the next year following the funding round.”
de Vasconcelos says he turned down a cheque for the full amount from an institutional investor in last year’s funding round in order to let “the crowd” invest. The same thing has happened this time around.
He says: “By huge coincidence, I just had a call where there was a very large institutional investor that manages in one fund alone about £150 million. They wanted to invest pretty much what’s left of the round, in fact, it would take it actually up to £4 million.
“I’m not even mulling it over. I told them, the funding round opens to everybody on Tuesday. They have exactly the same opportunity as everybody to invest but I want it to be open to our members. I don’t want them to take the whole thing but if they want to bring £1 million, as long as it’s fair for everybody then I’m happy with it.”
SyndicateRoom does not disclose how many investors are on its platform but de Vasconcelos admits it is lower than rivals. He says this is because his platform targets more sophisticated investors, of which there is a smaller pool. The upshot is they have more to invest, with SyndicateRoom’s users putting in an average of £15,000 in each investment.
Nearly £50 million has been invested over the platform since it launched in 2013.