You’ve written a business plan, put your savings into it, and have been working on your concept as a side gig for a few months. Finally, you believe the moment has come to take the plunge and raise some serious funds. Is this something you’ve heard before?
Small businesses and startups can use crowdfunding to raise funds in exchange for shares, rewards, debt, or nothing at all.
Now Seedrs, a UK-based crowdfunding platform, has been acquired by Republic, a US investment firm, for $100M, creating the first worldwide private investment marketplace with opportunities throughout North America and Europe.
Republic recently announced a $150M (£112.5M) Series B funding led by Valor Equity Partners, which was followed by the acquisition of Seedrs.
Seedrs cancelled a planned £140M merger with Crowdcube eight months ago after the Competition and Markets Authority (CMA) revealed steps to oppose the acquisition.
Acquisition Details
Republic aims to swiftly expand its footprint in Europe as a result of this agreement. The additional cash Republic’s commitment to increasing Seedrs’ regional reach is expected to aid in the delivery of new innovations and products to European investors and private enterprises.
Jeff Lynn, the cofounder and now chairman of Seedrs, will continue to lead Republic’s European expansion, which will now be able to take advantage of new EU law that has harmonised crowdfunding rules across the bloc.
“We recognised worldwide expansion was vital to achieve cross-border involvement when Republic debuted,” stated Kendrick Nguyen, Republic’s creator and CEO. We loved Seedrs’ technology capabilities, team strength, and strong presence in the UK and soon Europe while working with them. We believe that by combining the strengths of both organisations in retail, secondary markets, cryptocurrency, and communities, we will be able to build a clear industry leader. We look forward to collaborating to determine the industry’s future at this vital juncture of development and innovation.”
Before the purchase can close, Seedrs shareholders and the Financial Conduct Authority (FCA) must approve it, which is estimated to take a few months.
Seedrs shareholders and option holders will get about £23.59 per Seedrs share in “core consideration.” The majority of stockholders and option holders will receive cash, but some will receive Republic shares or a mix of both.
In addition to the core consideration, Seedrs will receive a “carry” fee when investors profitably sell shares purchased through Seedrs, which will be carved out of the transaction and paid to existing Seedrs shareholders and option holders as it crystallises in the future. This will apply to any deals made on Seedrs prior to the acquisition’s completion, as well as for a year afterward.
“Seedrs’ objective has always been to develop a worldwide private equity platform,” said Jeff Kelisky, CEO of Seedrs. This acquisition is a natural extension of our collaboration with Republic to reach and exceed that goal. We share a similar culture, a single aim, and a dedication to the strategic prospects ahead. We like the Republic team, and we believe that by working together, we can achieve our goal of building a robust global private investment marketplace that will alter the finance ecosystem and the people it serves.”
