UK equity crowdfunding business Seedrs – who’s merger with rival Crowdcube was earlier blocked by competition regulators – has been acquired by start-up investing platform Republic in a $100m deal.The move comes after Seedrs criticised the the UK’s Competition and Markets Authority earlier this year as stifling the UK’s potential to boost startups.
Seedrs was the first ever regulated equity crowdfunding business in the world and has pushed £1.5bn of investment through the platform during its history, even acting as retail investment platform for digital bank Revolut, now a unicorn. The platform was also the first to introduce a secondary marketplace.
Republic is a leading US fintech company that allows people to invest in private market equity, debt or crypto offerings and has almost one ($1) billion dollars under management through its private asset management practice.
Prior to this deal, Republic and Seedrs had a longstanding partnership where Seedrs advised Republic’s leadership team.
The acquisition of Seedrs follows Republic’s recent $150M Series B financing announcement, led by Valor Equity Partners.
Seedrs Cofounder and now chairman Jeff Lynn will continue in his role at Seedrs, and will shepherd Republic’s European expansion, which will now be in a position to take advantage of new EU legislation that has harmonised crowdfunding rules in the bloc.
Speaking to the FT, Lynn said the new rules “created a true European harmonised regulatory regime, where none existed before,” adding that “the regulatory fragmentation has made it nearly impossible to build platforms of scale — this [reform] gives platforms access to 27 different countries, all under a single regulatory regime.”
US investment firm Davidson Kempner will buy now take the stakes previously owned Seedrs shareholders, mostly for cash. Seedrs also has almost 5,000 smaller investors, including tennis player Andy Murray.
Republic said it will commit additional capital toward expanding Seedrs in Europe “to help deliver new innovations and products for European investors and private businesses.”
Kendrick Nguyen, Republic’s founder, said: “We knew 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.”
As part of the new structure, Seedrs CEO Jeff Kelisky will join Republic’s leadership team and continue as Seedrs chief executive.
He commented: “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.”
The transaction is subject to approval by the Financial Conduct Authority and Seedrs shareholders.