Mixed year for Crowdcube as Brexit uncertainty bites crowdfunding appetite
The UK’s largest crowdfunding platform struggled to achieve its targets under the weight of political uncertainty in 2019, but still managed to report a significant jump in revenue.
Sales at Crowdcube rose 36 per cent last year, as a record number of businesses opted to use its services to raise funding from customers and investors alike.
The boom meant Crowdcube’s revenue surpassed £8m for the first time to reach £8.2m, but failed to reach an earlier-stated target of £10m in sales for the year.
The firm’s chief marketing officer Luke Lang said he believed the growth figures were “really, really strong, particularly when you look at the economic climate in the last 12 months and all the Brexit uncertainty that we’ve been contending with”.
Crowdcube had also targeted turning a profit in 2019, its first since it launched 10 years ago. City PM understands this has similarly yet to come to fruition, as the firm focuses on growth and expansion.
Lang said the platform had expanded its headcount to 80 last year, after having had to cull some staff a year earlier as losses weighed.
“With businesses like us that are ambitious, we’ve always got an eye on our costs and see profitability as a key milestone. But we’re focused on growth and expansion, and that involves investment. It’s about striking a balance there,” he said.
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Last year Crowdcube closed 220 campaigns, up from 198 in 2018. More than 40 of those campaigns surpassed £1m in funding, as more businesses sought crowdfunding for larger rounds.
Four companies raised more than £5m, including Justpark, Carwow, Curve and Freetrade. Fintech remained Crowdcube’s top earning sector with £37.1m raised for businesses last year, almost double that of food and drink in second place at £18.8m and consumer goods at £18.4m.
Investment into businesses outside of the UK doubled last year, as the European Commission weighs up new regulations that would make crowdfunding more friendly to companies and investors on the continent.
Lang added that there were no plans for Crowdcube to raise any additional capital following its last funding round in 2018, saying: “There’s still plenty of cash on the balance sheet.”