Hitting a milestone, CrowdCube, experienced its first exit of a company that raised capital on its crowdfunding platform. An electronic car sharing club based in London, E-Car Cub raised £100,000 from 63 investors in 2013. At the time, it was one of the first successful crowdfunding campaigns on the CrowdCube platform. Achieving an exit for investors, Europcar Lab acquired a majority stake in E-Car Club for an undisclosed sum. Part of the rental car firm, Europcar Group, Europcar Lab is the company’s innovation unit.
According to CrowdCube, the exit led to investors “to be given a multiple return on their investment following the sale of the business to Europcar”. Undisclosed though are what percent return CrowdCube’s investors received, and whether Europcar’s majority stake acquisition included all of the equity held by the crowdfunding investors.
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In regards to the terms of the deal, Finance Magnates reached out to both CrowdCube and Europcar, who have yet to respond to requests from comment about the valuation of the E-Car Club deal and crowdfunding investor returns.
For CrowdCube though, the deal marks a milestone for the crowdfunding platform, with investors receiving their first exit. As a result of the structure of the equity crowdfunding model, investor stakes are locked as equity until a liquidity event such as an acquisitioin or IPO takes place, or distribution of profits by the company.
In terms of the overall crowdfunding industry, the E-Car Club exit is one of the few firms to have returned investor funds to investors. In other examples, Mill Residential REIT sold shares through SyndicateRoom, shortly before going public on the LSE’s AIM market. In addition, French Antabio who raised capital on WiSEED, and then provided an exit for these initial investors after closing a seed round of financing in 2012.