Seed capital venture fund, Collaborative Fund, announced this week that they will be committing $4M to invest in CircleUp retail consumer crowdfund deals. For CircleUp, the deal can be seen as their legitimization in becoming the new ‘go to’ place for tapping the retail consumer market and is in effect part of what the founders of CircleUp had in mind when they launched the platform.
Taking a bit of a different route than your usual Silicon Valley crowdfunding platform, CircleUp is a platform for consumer retail firms (think energy drinks, soap-on-a-rope and not Angry Birds), to raise funds from investors. Despite funding lesser known consumer brands, CircleUp has been able to raise $40M for 40 companies over the past 12 months on its platform, while also reducing the average time of funding in the sector from around one year to 60 days.
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Part of CircleUp’s success has been their ability to provide a technological solution for a sector that is often ignored by venture capital investors. Using their crowdfunding platform, accredited investors, of whom many have experience in the retail consumer brand market, are matched with companies seeking capital. As opposed to tech startups though, CircleUp retail firms are already generating revenues when they arrive to raise funding, with CircleUp also filtering for what it believes are companies with the best chances of future success.
For the Collaborative Fund, the company already has a wide net of investment types, including investments in firms across various industries, such as digital media, manufacturing, technology, mobile apps and modern delivery. Collaborative also has its share of stakes in the retail consumer industry; thus showing ability to gain deal flow in the sector. However, that experience hasn’t hindered them from deciding to work with CircleUp and recognizing the platform as providing funding efficiency and an opportunity for the consumer retail sector.