Friday 2 August 2019 12:01 am

Losses widen at Seedrs as deal sizes continue to grow

Equity crowdfunding platform Seedrs has reported a record operating loss as it focuses on expansion, but saw a significant increase in average deal size over the past year.

2018 saw Seedrs’ net operating losses climb to £4.33m, a 12 per cent increase on the previous year. This marks a return to increasing losses after the platform decreased operating losses by 7 per cent between 2016 and 2017. 

Revenues rose substantially, however, with the investment platform bringing in £4.8m – 56 per cent up on 2018. 

Despite only a modest increase in the total number of deals conducted via the site of five per cent, the average size of those deals rose 63 per cent over the year, and now stands at £807,000. 

In a statement released alongside the results, Seedrs chief executive Jeff Kelisky said that both 2018 and 2019 were “planned investment years” for the company, during which “we will continue our emphasis on expanding the current roadmap while innovating on next-level features for our customers.”

Seedrs’ auditors KPMG noted in its report on the results that the company needs to raise additional capital to be able to continue to operate, but that this capital “is not yet committed.”

“Whilst the directors, having previously raised such capital in recent years, have confidence in their ability to raise additional funds, there is no certainty that it will be successful at the time that it may be required,” they added.

A Seedrs spokesperson confirmed that the company is in “the advanced stages” of a fundraising effort and that a further announcement would follow once details were finalised. 

Seedrs has raised a total of £25m in funding to date, with investors including the troubled Woodford Investment Management and London-listed fund Augmentum Fintech.