Forget Brexit, this startup is eyeing “Brentry” with London expansion plans
An innovative crowdfunding startup which helps people invest in up-and-coming tech startups alongside venture capitalists has unveiled plans to break into the UK, dismissing any concerns around the uncertainty of Brexit.
OurCrowd, a three-year-old Israeli startup which last week landed $£72m (£56m) in funding, plans to open an office in London early next year where it will look to both invest in British startups and attract investors here to its global platform.
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“It’s a no-brainer where we should set up our first office in Europe,” said entrepreneur and one of Israel's top VCs John Medved, who is also OurCrowd's chief executive.
"I don't believe the sky is falling," he told City PM of the the decision to expand to the UK regardless of the decision to leave Europe, labelling the move "Brentry".
"Britain is an increasingly interesting place, and very entrepreneurial. Israeli companies are choosing to set up there and there's a very multinational vibe," he said, praising the UK's tech sector.
"It's a pretty cool place to be investing and I'm bullish long-term in investing in Britain," he said, adding that OurCrowd will help address the lack of capital available for UK tech startups – an issue highlighted in recent weeks by top fund manager Neil Woodford.
The firm is eyeing up the UK 's expertise in areas such as fintech, data science, consumer tech, logisitcs and robotics.
A location in London will be its eighth office around the world and will help grow OurCrowd's 15,000 global investors who have so far ploughed a collective $300m into 100 companies, eight of which have been acquired and one of which has IPOd.
The firm is hoping to attract thousands of new investors in the UK and pry open the largely closed world of early tech investment.
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Companies are chosen by OurCrowd, which operates as a VC firm investing in the firms too. Just two per cent of the companies it sees make it to the crowdfunding stage and investors are offered favourable preferred stock in the startups with lucrative benefits such as anti-dilution and preemptive rights. These are usually unavailable to non-VC investors.
OurCrowd general partners sit on the board of the startups they invest in and also mentor them. It also takes a management fee and upside fee on profits from investors.
Unlike many well-known crowdfunding platforms, Ourcrowd has a minimum investment, currently at the $10,000 mark to attract a "well-heeled" group. However, it may adapt that in future to allow smaller investors to get in on the action too, Medved revealed.