At the beginning of this year, Erly Stage reported on Crowdcube’s planned acquisition of Seedrs. At this time, the potential acquisition was still under review by the UK watchdog, The Competition and Markets Authority (CMA), and a final decision was yet to be made. Unfortunately, the CMA decided against this merger on the grounds of concerns related to competition and effectively blocked the acquisition. Although both crowdfunding platforms parted ways, fast forward to the end of the year and Seedrs has found a new partner. It was just announced today that Seedrs is to be acquired by Republic, a US-based private investment platform. The acquisition will allow both parties to build the world’s first global private investment platform.
The acquisition of Seedrs by a relatively young company brings up important questions for UK-based businesses and founders.
Seedrs was co-founded by Jeff Lynn and Carlos Silva in 2012 with the aim to make the world of investment more democratic and open, whilst also boosting the European startup ecosystem and providing small businesses with greater access to finance in order to help them scale. Seedrs has been a great success story, having facilitated close to £1.5billion investments and helping grow some of the largest businesses to date, such as Revolut.
Republic was founded by Kendrick Nguyen in 2016 and provides access to highly-vetted investment opportunities in startups, real estate, video games, and crypto. Although the investment group has only been around for 5 years, in comparison to Seedrs almost decade-long history, the former has already raised $150m in its Series B round in October.
Republic and Seedrs have had a partnership over the last four years, where businesses have been able to raise funds on both investment platforms. This decision, therefore, does not come as a big surprise. Both Republic and Seedrs are leaders in the US and UK respectively and joining hands will allow them to expand their global footprint and offer a broader range of products and services to customers. Both companies’ CEOs have expressed their excitement at the acquisition, with Republic’s Kendrick Nguyen stating that “international expansion was necessary to achieve cross-bordered participation. In working with Seedrs, we have admired their technological capabilities, the strength of their team and their strong presence in the UK and soon Europe. We anticipate further developing the strengths of both companies from retail, secondaries, crypto, and communities to create a clear industry leader.” Jeff Kelisky, CEO of Seedrs similarly stated that “Seedrs’ ambition has always been to build a global private equity marketplace. This transaction is a natural development of our partnership with Republic to achieve and go beyond that ambition. We share a similar culture, a common goal, and a commitment to the strategic opportunities that lie ahead.”
Although yet to be completed, it appears that this deal will open up greater investment opportunities to a range of businesses. The acquisition of Seedrs by a relatively young company also brings up important questions for UK-based businesses and founders. Given the fact that there is opportunity to raise so much so quickly, is it better for ambitious UK founders to simply go stateside? Perhaps the UK market is not big enough for founders to achieve their dreams. Additionally, the US provides a competitive advantage for the same business model, given the size of the US market. It seems that Seedrs has recognised this and taken the plunge to expand their model into larger markets.