Equity crowdfunding platform Crowdcube is steadily losing cash, with new fundraising on the horizon

Emily Nicolle
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Digital bank Monzo raised £2.5m on Crowdcube last year from 6.484 individual investors, but was it enough?
Digital bank Monzo raised £2.5m on Crowdcube last year from 6.484 individual investors, but was it enough?

Exeter-based Crowdcube has posted losses for another year, as revenues slump due to sources of new campaigns on the platform drying up.

Despite its status as one of the UK’s largest crowdfunding platforms, and having previously raised an additional £1m in growth capital last May, its operating loss for the year ending last September came in at £4.7m, slightly reduced from £5.4m in 2016.

Though the average size of a completed pitch increased average revenues per campaign by 19 per cent, the number of pitches completed in 2017 overall fell into decline, resulting in an actual 5 per cent decrease in revenue for the year.

The group’s average staffing numbers also dropped to 79, despite previous growth plans involving a large intake of employees in 2016, increasing its initial numbers from 54 to 85.

As a result, despite early backing from venture capital stalwarts like Balderton, Numis and Drapers Esprit, Crowdcube’s directors will be looking to fundraise again this year through opportunities involving both crowd and institutional investors.

Read more: Digital challenger bank Monzo just smashed another crowdfunding record

However the group has already been working on rectifying some of its issues, undertaking a number of initiatives towards the end of 2017 to increase the number of pitches launched on its platform.

A previous statement from Crowdcube said that it began to feel the benefits of these initiatives in the first quarter of this year, doubling the number of pitches it saw compared with the quarterly average from 2017.

The company also surpassed the £400m mark for pledged investment through its platform in February, with twice as many new companies choosing to crowdfund for the first time via Crowdcube next to its nearest competitor.

At the end of September Crowdcube held £5.4m in cash on its balance sheet, which is forecasted to last the company a year, according to Companies House filings.

Its last formal round of fundraising closed in September 2016, when Crowdcube raised £8m via its own site from a mix of crowd and institutional investors.

​A representative said to City A.M.:

"2017 was a record-breaking year at Crowdcube with over £90m successfully invested, and £28m in the three months after the accounts just filed.

"This unprecedented level of demand continued into 2018 with a record first quarter, and our second quarter saw funded company Revolut become a unicorn at a valuation 19 times greater than when the crowd got in.

"As we continue to invest in our team and our tech, it’s an exciting time for the business."

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