Woodford Patient Capital Trust and Augmentum Capital lead £10 million investment round into equity crowdfunder Seedrs

• Woodford Patient Capital Trust and Augmentum Capital invest £7.5 million into Seedrs, one of the world’s leading equity crowdfunding platforms
• A further £2.5 million will be offered to existing shareholders and the crowds through a campaign on the Seedrs platform
• The investment round values Seedrs at £30 million
• Seedrs will use the capital to expand its marketing efforts in the UK and Europe, increase platform development activities and launch its business in the United States

Seedrs, one of the world’s leading equity crowdfunding platforms, has announced a £10 million Series A fundraising round led by Woodford Patient Capital Trust plc (WPCT) and Augmentum Capital.

WPCT is the £800 million investment trust launched earlier this year by Woodford Investment Management. WPCT is managed by Neil Woodford, widely considered to be one of the UK's leading fund managers over the past 25 years. The trust invests mainly in early-stage and early-growth companies but also has exposure to some blue-chip companies.

Augmentum Capital is a venture capital firm founded in 2009 by two highly-experienced entrepreneurs and investors, Tim Levene and Richard Matthews. It backs entrepreneurs and businesses it believes have the potential to become leaders in their industries. Its first fund, Augmentum I LP, which is making the investment in Seedrs, is wholly backed by RIT Capital Partners plc, the award-winning FTSE investment trust chaired by Lord Rothschild, whose family own 18% of RIT’s shares.

In addition to the investment from WPCT and Augmentum, Seedrs will conduct a £2.5 million crowdfunding campaign to give existing shareholders and new investors the opportunity to participate. Details of the crowdfunding campaign will be announced shortly.

The fundraising round values Seedrs at £30 million on a fully-diluted, post-money basis. Tim Levene, Managing Partner of Augmentum, is joining the Seedrs Board of Directors in connection with the round.

Seedrs will use the capital raised in this fundraising round to expand significantly its marketing efforts in the UK and Europe and its platform development activities. It will also use the funds to expand into the United States following its acquisition of California-based Junction Investments, Inc., in late 2014.

Speaking about the round:

Tim Levene, Managing Partner, Augmentum Capital, said: “We have been following the developments in equity crowdfunding for some time and believe Seedrs are the stand out company. The market is still early in its development with many challenges to overcome. However, we believe Seedrs have the right blend of talent, vision, experience and rigour to ensure they become the leader in this exciting space.

“As a fund we’ve already made a number of investments in alternative finance businesses such as Zopa, Interactive Investor, Borro and BullionVault.  Seedrs further strengthens our portfolio in this area and marks us out as one of the UK’s leading fintech funds.”

Jeff Lynn, CEO and co-founder of Seedrs, said: “We are absolutely thrilled to have Woodford and Augmentum leading this investment round in Seedrs. The capital we are raising will allow us to deliver our next stage of growth in the UK, Europe and the United States. As importantly, though, is the signal this investment sends to the market. The greatest fund manager of our time and the greatest financial family in history have looked at the equity crowdfunding space, decided that there is a huge opportunity to be won, and decided that Seedrs is the one that's going to win it. We are honoured to have both investors on board, we look forward to working with them as we continue to grow.”

This fundraising round marks another major achievement for Seedrs and follows on a string of recent accomplishments and successes, including among others:

• Growing at a rate of 15% month-on-month
• Being named by a KPMG-led group as one of the world’s 50 best fintech innovators
• Entering a strategic partnership with tennis champion Andy Murray
• Being appointed funding partner for the Welsh government’s £20 million business growth programme
• Joining forces with fund manager Braveheart Investment Group plc as they moved their innovative crowdfunding fund from another platform to Seedrs

The fundraising round remains subject to consent by the Financial Conduct Authority and customary closing conditions.

PRIME MINISTER BACKS INNOVATE FINANCE MANIFESTO: UK FINTECH 2020

 Innovate Finance, the independent membership association for the global FinTech sector, has today launched its new manifesto: UK FinTech 2020.

The manifesto sets out ambitious goals for the UK to be the undisputed centre for financial services technology and innovation. It calls on the government to continue its support for the sector and to back initiatives that will attract global investment, world leading companies, and future FinTech jobs to the UK. The manifesto is released as Prime Minister David Cameron leads a trade delegation of British FinTech leaders to South East Asia this week. 

Innovate Finance’s vision for 2020 is:

·      Investment: For the UK to become the most investment-friendly environment for FinTech globally, attracting $4 billion of venture investment and $4 billion of institutional investment in corporate venture funds, accelerators and innovation programmes.  This is up from a UK total of $623 million in 2014.

·      Global FinTech Leader:  For the UK to become the premier location for at least 25 global FinTech leaders, whether by IPO, global market share or by valuation. The success of this target will be supported by proportionate and effective regulation, a proactive policy environment and a commitment to greater financial inclusion.

·      Jobs: For the UK to increase investment in FinTech and develop more global leading companies that will generate 100,000 more jobs in UK FinTech. This will be supported by new FinTech apprenticeships and degree courses that will create the skilled workforce necessary to make the UK the global centre for FinTech.

Commenting on the goals of the manifesto, UK Prime Minister David Cameron said: “This government wants the UK to be the leading FinTech centre in the world, that’s why, at the Summer Budget, we appointed a Special Envoy for this fast growing sector. I’m pleased that Innovate Finance’s manifesto has set such ambitious goals including the creation of 100,000 jobs. This will ensure we are a world leader in the development of financial services technologies.”

 The UK’s opportunity to lead

FinTech already generates £20bn of GDP to the UK economy and directly employs 135,000 people. According to industry reports, the UK is only at the start of this dramatic transformation in financial services. Goldman Sachs predicts that a further $4.7trn in revenue for traditional financial services is at risk of being displaced globally by new technology-focused entrants.

The UK is leading the way in Europe for FinTech investment, taking 42% of all European FinTech investment in 2014. Investment grew 136% in 2014, from $264m in 2013 to $623m 2014. Despite this, Silicon Valley still dominates, with FinTech investment at over $2bn versus a European total of $1.48bn.

Alastair Lukies CBE, Chairman of Innovate Finance, said: “Utilising the increasingly global reach of technology, financial services are now becoming truly available to all consumers in all economies around the world. The UK has a critical role to play in ensuring financial inclusion, common standards, continued innovation and socially enhancing services for all. Today’s manifesto for 2020 states the UK’s intentions to be a global leader in FinTech, underpinning the important progress of this borderless market for generations to come.”

The UK government’s trade mission to South East Asia this week highlights the importance of FinTech both to the country and the global economy. Mr Cameron is travelling with 31 business leaders from across the UK and includes a significant delegation of FinTech firms, including Al Lukies and Innovate Finance member firms Ratesetter, and iwoca.

Bank of England gross lending to SMEs - there is certainly more to be done

Kevin Caley, CEO of ThinCats comments on the Bank of England’s figures on Money and Credit – Gross Lending to SMEs:

“SMEs might take some solace from today’s figures showing that they are slowly being given more financial backing. However, this is only a small improvement and there is certainly a lot more to be done for UK SMEs, who still face a serious lack of financial support in order to grow.

 “The peer-to-peer finance sector has been expanding rapidly to fill this lending gap, which clearly demonstrates the on-going need for viable alternative sources of finance and supports the view that the market opportunity is both permanent and very large. Over £500 million of new consumer and small business loans have been provided by peer-to-peer platforms since April, the fastest rate of growth yet and the most rapid growth is in the business lending sector. The success of the peer to peer sector is clearly justifying Government support and encouragement by stepping up to meet the challenge and fill the gap left by the banks.”