Crowdfunding platform Seedrs has today published its first ever “portfolio update”, claiming a platform-wide annualised rate of return of 14.44 per cent. The figure is 41.87 per cent when the impacts of tax reliefs and liabilities are taken into account.
The platform analysed the characteristics and performance of 253 deals funded between its launch in July 2012 and the end of 2015.
As part of the report, which was reviewed by accountancy giant EY, Seedrs broke down the deals by sectors.
In terms of non-tax-adjusted internal rates of return (IRRs), food and beverages was the best-performing sector at 22.77 per cent.
It was followed by home and personal (17.79 per cent) and finance and payments (16.91 per cent).
By far the worst performing area was entertainment, the only sector with a negative IRR of 29.96 per cent.
Content and information (1.99 per cent), travel, leisure and sports (2.86 per cent) and data and analytics (2.94 per cent) were the next worse performing.
The report said:
We would expect to see these numbers change a good bit over time, but there are a few interesting points that emerge from them. One is that every sector bar entertainment has produced positive results.
It is also worth noting that, consistent with the performance by level of digitisation described above, it is not only the highly digital sectors that are performing well: the best performer of all was food and beverage, many of the businesses in which are non-digital; and the next two best-performing sectors — home and personal, and finance and payments — have a range of levels of digitisation in their business models.
Seedrs chief executive and co-founder Jeff Lynn said:
The release of this portfolio update is momentous for Seedrs. I co-founded the business in 2009 because I am a strong believer that a portfolio of early-stage investments can produce great returns for investors large and small.
Now, for the first time, we have the data to prove it. The Seedrs portfolio has achieved an IRR in excess of nearly every other asset class, and that’s even without taking into account the impact of tax reliefs.
As importantly, our active investors have shown that, on average, they can beat the market, using Seedrs to build portfolios of outperformers. It is difficult to overstate the importance of this data: it is a game-changer for us and for the many investors from all over Europe (and, soon, the United States) who allocate capital through our platform.