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Crowdcube
Crowdcube
from Wikipedia

Crowdcube is a British investment crowdfunding platform, established by Darren Westlake and Luke Lang in 2011.[1]

Key Information

Model

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Equity-based crowdfunding is a new fundraising model for entrepreneurs. Individuals' investments are pooled, allowing entrepreneurs to secure funding directly from the general public and bypass business "angel" investors and banks.[2] The key principle of this model is that anyone can invest money in return for equity in a business. Entrepreneurs, with a UK registered company, can present their business and its investment potential to potential micro-investors by uploading a Dragons' Den-style video pitch, images, and supporting documents. The minimum investment can be as little as £10.

Crowdcube operates on the "all or nothing" model. When a pitch reaches its investment target, the business receives the funding raised. If it does not, no funds are taken from investors. A commission is charged on successful funding campaigns.

The platform uses social media to a large extent to alert potential investors about an offering. In March 2015, the Financial Conduct Authority released new guidance on the use of social media to promote financial products to ensure that all communications are clear, fair, and not misleading.[3]

Crowdfunding as a model for fundraising has become more popular over the past few years with the rise of the US-based Kickstarter and Indiegogo. These platforms differ from Crowdcube as they work on a donation and reward-based model where the donor receives a product or service in return for their donation.[4]

On 12 November 2018, Crowdcube introduced a new investor fee that charges investors for investing on the platform, 1.5% of the total investment, added on when the investment is collected. This fee is capped at £250.[5] The fee was met with some backlash within the Crowdcube community, particularly as it was introduced just before Crowdcube's own raise went live and pre-arranged venture capitalists were exempt. It was also criticised for posting the news of the fees within the FAQs, rather than emailing all the investors.[6][7]

Regulation

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In February 2013, Crowdcube received authorisation from the Financial Conduct Authority (FCA) to offer investors the opportunity to become direct legal shareholders in UK businesses.[8]

Successful exits

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In July 2015, E-Car Club, an electric vehicle rental business championing the future of the green sharing economy, produced the first exit from the CrowdCube 'Funded Club'.[9] E-Car received a significant investment from Europcar, Europe's largest vehicle rental business.[10] E-Car club has joined the newly formed Europcar Labs project, which has been set up by CEO Philippe Germond to focus on 'mobility solutions'.[11] This is Europcar's first acquisition since its IPO on the Euronext in early June 2015.[12]

In December 2015, it was announced that Camden Town Brewery was being bought by the world's largest brewer, Anheuser-Busch InBev. In a letter to Crowdcube shareholders, AB InBev were offering a payout of between £1.0861 and £1.2526 per share,[13] depending on whether they accept an option with a variable element based on sales growth to be paid at a later date. Reports said this was a nominal return on investment of just under 70%, implying that AB InBev paid around £85 million.[14]

In 2019 Parcel2Go, who had raised funds on Crowdcube in 2017, was subject to a management buyout backed by Mayfair Equity Partners.[15]

Funded campaigns

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Equity

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Some examples of companies that have acquired funding using this method are:

Business Amount raised No. of investors Equity released Date
Freetrade £8,890,468 7,170 1.353% November 2021[16]
Cornish Lithium £5,999,995 1,012 6.81% June 2021[17]
Sunswap £501,348 788 21.18% January 2021[18]
Sliabh Liag Distillers £2,265,910 1,158 13.61% September 2020[19]
Belluscura £538,140 302 9.6% April 2019[20]
Monzo £20,000,000 36,006 2.04% December 2018[21]
Recruitive £1,170,000 381 54.64% March 2018[22]
Manigo £510,630 355 14.33% January 2018[23]
Parcel2Go £1,057,730 1,308 2.58% November 2017[24]
Kar-go £321,720 281 15.11% July 2017[25]
Revolut £1,007,050 433 2.39% September 2016[26]
Movem £200,000 116 20% September 2016[27]
GoHenry £3,994,980 2,372 15.98% June 2016[28]
Chilango £3,433,010 1,300 8.72% December 2015[29]
Adzuna £2,149,355 552 5.89% June 2015[30]
JustPark £3,700,000 2,919 15.61% March 2015[31]
Open Desk £310,010 171 18.59% June 2014[32]
SilkFred £145,610 71 24.27% 2014[33]
LOVESPACE £1,574,590 259 28.17% May 2014[34]
Crowdfunder £500,000 - 10% April 2014[35]
Zero Carbon Foods £659,480 454 29.04% March 2014[36]
Hab Housing £1,972,150 642 26.29% September 2014[37]
E-Car Club £100,000 63 20% December 2012[38]

Bonds

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Bonds allow members of the public to lend money to the issuing company in return for interest and/or rewards. Mini-bonds have "particular appeal for established businesses".[39] In June 2014, Chilango launched Crowdcube's first mini-bond campaign. Since then, several other businesses have launched mini-bond offerings via the Crowdcube platform. Some of the businesses that have funded bonds via Crowdcube include:

Company Amount raised No. of investors Interest paid Date
Brew Dog £2,312,000 815 6.5% Oct 2015[40]
Taylor St Baristas £1,805,000 493 8% Jan 2015[41]
Eden Project £1,500,000 355 6% October 2014[42]
River Cottage £1,000,000 285 7% June 2014[43]
Chilango £2,035,000 347 8% June 2014[44]

Events

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Caterham F1

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In November 2014, Crowdcube partnered with Caterham F1 to raise £2.35 million to fund the team for the final Grand Prix of the season in Abu Dhabi.[45] Designed to empower F1 fans to help Caterham return to racing, the project was successfully completed on 14 November,[46] with Caterham F1 finishing in 17th place with Grand Prix newcomer Will Stevens.[47] Caterham F1 went bankrupt in 2015.[48]

See also

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References

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Revisions and contributorsEdit on WikipediaRead on Wikipedia
from Grokipedia
Crowdcube is an equity crowdfunding platform headquartered in the United Kingdom that connects retail investors with startups and growing businesses, allowing individuals to invest small amounts in exchange for shares or equity stakes. Founded in 2011 by Darren Westlake and Luke Lang, it pioneered equity crowdfunding in the UK by launching as the first such platform in February of that year. The company, incorporated as Crowdcube Limited in 2009, is authorized and regulated by the Financial Conduct Authority (FCA), ensuring compliance with financial services standards for investor protection and transparency. Since its inception, Crowdcube has grown into one of Europe's largest platforms, facilitating over £1.5 billion in total investments from more than 2 million registered investors to support over 1,600 es as of October . Investors can participate with minimum pledges as low as £10, while companies typically raise between £10,000 and over £1 million per campaign through pitches that detail plans, goals, and equity offered. The platform operates primarily in the UK and , with additional services extended to the , and emphasizes , including financial audits and legal reviews for listed opportunities. Crowdcube's model has democratized access to private market investments, previously reserved for venture capitalists and high-net-worth individuals, by enabling crowd-sourced funding for innovative across sectors like technology, consumer goods, and . Notable successes include early investments in high-profile companies such as and , which have delivered significant returns to investors and achieved status. The platform has facilitated several successful exits and multimillion-pound raises, highlighting its role in fostering scalable enterprises. Despite these achievements, Crowdcube stresses the high-risk nature of such investments, with many campaigns resulting in illiquid shares and potential total loss, as required by FCA disclosures.

History

Founding and early development

Crowdcube was founded in February 2011 by Darren Westlake and Luke Lang in , . The platform emerged as the world's first site, driven by the founders' vision to democratize investment opportunities in startups by enabling ordinary individuals to purchase equity stakes. This innovative approach allowed public participation with a minimum investment of just £10, lowering traditional that had previously limited such to wealthy individuals or institutions. The platform officially launched on February 15, 2011, featuring its initial four investment pitches targeted at UK-based startups. Early operations centered on facilitating direct equity investments through an online interface where entrepreneurs could present their business proposals to potential backers, who in turn committed funds in exchange for shares. These mechanics operated in a pre-regulatory environment, relying on basic legal frameworks for private placements without the oversight that would later define the sector. Crowdcube established its headquarters in from the outset, serving as the base for its nascent operations. The initial team was lean, primarily comprising the two co-founders, with Westlake taking on the role of CEO to oversee strategic direction and Lang serving as co-founder and later CMO to handle marketing and growth initiatives. This small founding group focused on building the platform's core functionality and attracting early users within the .

Expansion and milestones

In February 2013, Crowdcube received authorization from the (FSA), the predecessor to the (FCA), marking a pivotal milestone that enabled the platform to scale operations and attract a broader base of investors and businesses under regulated in the UK. This approval, as the first for an equity crowdfunding platform, facilitated rapid growth following its founding in 2011. By 2025, as of October 2025, Crowdcube had facilitated over £1.5 billion in investments for more than 1,600 businesses, demonstrating significant expansion in supporting startups and growth-stage companies. The platform's investor community also grew substantially, reaching over 2 million members by October 2025, reflecting increased accessibility and engagement in private market investments. In parallel, Crowdcube pursued international expansion, beginning preparations in 2021 under the European Crowdfunding Service Providers Regulation (ECSPR), which harmonized crowdfunding rules across the . This effort culminated in the platform's first ECSPR approval in April 2022 by Spanish regulators, allowing it to offer securities throughout the , and the establishment of Crowdcube Europe SL to oversee continental operations. In 2025, Crowdcube introduced initiatives to enhance liquidity and investment opportunities, including the Growth Series in partnership with Bolt Secondary, aimed at providing access for shares in later-stage private companies. The platform also supported notable raises, such as Haatch SEIS 11, backed by £27 million in total commitments from the to Haatch, and InvestaX's campaign, which raised £1 million to expand options trading accessibility. To fuel its own development, Crowdcube raised $62.9 million across nine funding rounds from investors including and .

Business model

Equity crowdfunding process

Crowdcube's equity crowdfunding process begins with companies submitting an application to the platform, where they provide details about their business, funding goals, and supporting documentation such as financial projections and legal structures. The platform then conducts rigorous due diligence, rejecting approximately 90% of applicants to ensure only viable opportunities proceed. This due diligence, outlined in Crowdcube's Due Diligence Charter, involves verification of the company's financial statements for accuracy and realism, legal status including incorporation and compliance with relevant laws, and business plans to assess market potential and operational feasibility, often using third-party providers like Creditsafe, Experian, and Trulioo for background checks on directors and financial health. Upon passing , approved companies launch a pitch campaign on the platform, offering equity shares—typically ordinary shares or instruments—to investors in exchange for capital raised over a fixed period, often 30 to 60 days. The process operates on an "all or nothing" funding model, meaning the company receives the funds only if the minimum target is met by the campaign's end; otherwise, all pledges are refunded to investors, and no shares are issued. This model incentivizes strong pitches and investor confidence while protecting participants from partial shortfalls. Investors participate by first registering on the platform, completing a suitability assessment to confirm their risk awareness, and then committing funds starting from a minimum of £10 per investment. Successful investments result in ownership of shares held through Crowdcube's nominee structure, where Crowdcube Nominees Limited acts as the legal holder on behalf of the investor, simplifying administration while preserving the investor's beneficial interest and rights to dividends or exits. Investors in qualifying early-stage companies may also access UK tax incentives, such as the Seed Enterprise Investment Scheme (SEIS), which provides 50% income tax relief on investments up to £200,000, or the Enterprise Investment Scheme (EIS), offering up to 30% relief on larger amounts, subject to HMRC approval. Crowdcube generates revenue through a listing (typically £4,995–£9,995 depending on the offer type), a success of up to 8% of the funds raised upon campaign completion, and a 2.5% platform on all funds raised as of 2025, covering platform operations and . Additionally, as of September 2025, the platform charges investors a 2.49% on each amount, with a minimum of £2.49 and capped at £250, deducted at the time of to support ongoing investor services. This structure aligns incentives by tying compensation to successful raises while keeping entry barriers low for retail participants.

Bond and debt offerings

Crowdcube introduced bond offerings, specifically mini-bonds, in as a means for established businesses to raise financing from retail investors, providing fixed returns through payments rather than equity . These -based campaigns allow companies to issue unsecured bonds with predefined terms, including rates typically ranging from 7% to 8% annually and maturity periods of several years, enabling investors to lend capital in exchange for periodic payments. The process for bond investments on Crowdcube mirrors the platform's in accessibility but focuses on lending: investors register on the , review company prospectuses detailing bond terms, and commit funds starting from a minimum of £10, similar to equity pitches. Once the campaign reaches its target, the company receives the funds as , with repayments structured as installments and principal return at maturity; Crowdcube facilitates and compliance but charges success-based fees, reducing upfront costs for issuers compared to traditional bond markets. Unlike equity investments, which offer potential returns through share appreciation or dividends without guaranteed income, bonds provide predictable fixed , though payments depend on the issuer's financial health. Bond investments carry a profile with lower volatility than equity due to fixed returns but remain high-risk overall, as mini-bonds are unsecured, illiquid, and susceptible to issuer default, potentially leading to total loss of principal without protection from the . Crowdcube emphasizes these risks in investor disclosures, noting that bonds issued by startups or growth-stage firms amplify default potential despite the structured repayments. Some companies integrate bond offerings with equity raises on the platform to diversify sources, allowing simultaneous access to debt for and equity for growth, thereby appealing to investors seeking varied risk-return profiles within the same campaign.

Regulation

Crowdcube received authorization from the (FSA), the predecessor to the (FCA), in February 2013, becoming the first platform to gain regulatory approval in the . This authorization enabled Crowdcube to legally offer investors the opportunity to purchase shares in unlisted companies, marking a pivotal step in formalizing under financial regulations. As an authorized platform, Crowdcube operates in compliance with the Financial Services and Markets Act 2000 (FSMA 2000), which provides the foundational framework for regulating financial services in the UK, including activities. Under FSMA 2000 and the FCA Handbook's Conduct of Business Sourcebook (COBS), Crowdcube must adhere to rules on fair treatment of customers, ensuring all communications and promotions are clear, fair, and not misleading. This includes mandatory risk warnings that highlight the high-risk nature of investments, such as the potential for of capital, as classified by the FCA for investment-based . Investor protections form a core element of Crowdcube's regulatory obligations, with mandatory risk disclosures required in all promotional materials to inform retail investors of the illiquid and speculative nature of . Platforms like Crowdcube must provide a cooling-off period, typically 24 hours for direct offer promotions, allowing investors to withdraw commitments without penalty, alongside a "cooling-off " process to confirm investments post-review. Additionally, as an FCA-authorized firm, Crowdcube investors have access to the (FOS) for independent dispute resolution if issues arise with the platform's services. Following , Crowdcube's operations remain under exclusive FCA oversight, maintaining the pre-existing national regime separate from the European Union's harmonized rules, such as the European Crowdfunding Service Providers Regulation (ECSPR). The FCA has deemed the framework adequate for protecting investors without adopting EU-wide changes, ensuring continued focus on domestic conduct and market integrity standards. Crowdcube has aligned its practices with key FCA updates from the 2016 post-implementation review of crowdfunding rules, which emphasized enhanced transparency in investor communications and assessments to mitigate harm in high-risk markets. These updates reinforced requirements for clear disclosure of platform fees, investment s, and performance data, promoting greater accountability in .

European Union

Crowdcube adopted the European Crowdfunding Service Providers Regulation (ECSPR), which entered into force on November 10, 2021, to facilitate cross-border equity crowdfunding operations throughout the European Union. In April 2022, Crowdcube Europe SL received approval as the first platform under the ECSPR from Spain's Comisión Nacional del Mercado de Valores (CNMV), enabling it to provide services across the EU. This authorization allows passporting of crowdfunding services to all EU and EEA member states, harmonizing operations under a single regulatory framework that includes standardized investor protections, such as an annual investment cap of €5,000 for non-sophisticated investors across all projects on the platform. Crowdcube's EU operations incorporate specific due diligence processes, including thorough vetting of investment opportunities and ongoing monitoring, alongside mandatory reporting to relevant national competent authorities to ensure compliance with ECSPR requirements. From 2023 to 2025, the full implementation of ECSPR bloc-wide rules has supported Crowdcube in conducting campaigns in multiple languages and currencies, enhancing accessibility for investors and issuers throughout the . Building on its foundational authorization from the UK's , this EU framework has expanded Crowdcube's reach while maintaining consistent investor safeguards.

Investments and performance

Notable funded campaigns

Crowdcube has facilitated over 1,600 funded campaigns by 2025, spanning diverse sectors such as , food and beverage, and sustainability, with many attracting high levels of investor participation. Among campaigns, raised £20 million from 36,006 investors in December 2018 to support its expansion as a provider. secured approximately £8.4 million in November 2021 through its seventh round, focusing on growth in the investment platform space. Similarly, gathered £1,007,050 from 433 investors in July 2016, marking an early milestone for the disruptor. In the bond offerings category, BrewDog raised £2.31 million in October 2015 via a mini-bond to fund its craft beer production and international growth. Chilango, a Mexican restaurant chain, achieved £2.04 million in June 2014 through its inaugural "Burrito Bond," which provided investors with 8% annual interest over four years. Recent campaigns in 2025 highlight ongoing momentum, including Investa's second raise, which surpassed £1 million within one week, building on its prior success with nearly 500 investors. GoParity, a platform for sustainable projects, closed a €2.9 million round in May to finance impact-driven initiatives across Europe. These examples underscore Crowdcube's role in supporting varied sectors, from fintech innovators like Revolut to food brands like BrewDog and sustainability-focused ventures like GoParity.

Successful exits and returns

Crowdcube has facilitated several notable exits that have delivered significant returns to investors, marking milestones in the equity crowdfunding landscape. One of the earliest successes was the acquisition of E-Car Club by in July 2015, providing backers with a 300% return on their investments in the electric car-sharing service. Similarly, Camden Town Brewery was acquired by InBev in December 2015 for over £80 million, offering substantial payouts to Crowdcube investors who had backed the company. In 2019, underwent a backed by Equity Partners, enabling liquidity for early shareholders through the transaction. High-profile returns have underscored the potential for outsized gains, particularly in . Early investors in , from its initial Crowdcube campaign, saw a £100 appreciate to approximately £64,500 by September 2025, representing a 64,400% gain amid a secondary share sale priced at $1,381.06 per share. These individual successes contribute to broader performance metrics, with Crowdcube investors realizing over £201 million in returns through exits, secondary sales, and acquisitions across more than 163,000 investments by 2025. The platform's exit rate stands at 5%, with 74% of funded businesses still actively trading, reflecting a resilient portfolio. options have enhanced , allowing investors to participate in platform-facilitated sales and structured transactions, such as those managed through Crowdcube's acquisition of Semper in 2023 and the launch of the Growth Series in 2025 for late-stage private companies. In 2025, trends show increased exits in the sector, contributing to overall positive for the investment base.

Challenges

Notable campaign failures

One prominent example of a campaign failure on Crowdcube is , a claims management company that raised over £800,000 in September 2015 at a £12 million valuation but entered administration in February 2016, becoming the UK's largest collapse at the time. The failure stemmed from severe problems and accusations that the company's Crowdcube pitch included misleading financial projections, such as anticipated pre-tax profits of £12 million by 2017-18 despite recording losses of £1.4 million in 2013-14 and £1.9 million in 2014-15. Crowdcube responded by defending its but acknowledging the need for enhancements, noting that the pitch documents had not concealed underlying issues like deficits. Another high-profile case involved the racing team, which launched a Crowdcube campaign in November 2014 and successfully raised £2.35 million from over 5,000 investors to finance participation in the season-ending . The team completed that single race but folded into in January 2015 amid chronic financial mismanagement, including disputes with team owners and inability to secure long-term sponsorships, leaving investors with significant losses. In response to such failures, Crowdcube maintains a rigorous process that rejects around 90% of applicant companies, involving background checks, financial reviews, and assessments of management teams to mitigate risks before campaigns launch. The platform has publicly addressed incidents like through statements outlining vetting shortcomings and subsequent improvements, such as expanded financial audits, while emphasizing that no process can eliminate all business risks. As of November 2025, the broader investment sector has recorded 35 failures year-to-date, the lowest annual pace since , with many attributed to adverse market conditions like economic downturns or operational execution flaws rather than platform errors. In these scenarios, investors generally incur partial or total capital loss, as Crowdcube disclaims liability for the independent business decisions and outcomes of funded companies, a stance upheld in regulatory decisions. In 2018, Crowdcube introduced a 1.5% fee on successful investments for investors, which faced significant backlash from the user community over concerns that it would erode potential returns on already high-risk equity crowdfunding opportunities. The fee structure, applied at the time of investment confirmation, marked a shift from the platform's previous no-fee model for investors, prompting criticism that it prioritized platform revenue amid growing competition in the sector. A notable mis-selling case arose in 2021 when the (FOS) ruled against Crowdcube, ordering the platform to repay an investor £18,000 (less any applicable tax relief) for providing inadequate advice on the risks of a high-risk opportunity. The ombudsman determined that the platform's promotional materials were "at best unclear, and at worst misleading," failing to adequately highlight the speculative nature of the venture, which ultimately collapsed. This decision highlighted regulatory expectations for platforms to ensure fair and non-misleading communications under (FCA) rules. Allegations of misleading information in company pitches have drawn further scrutiny to Crowdcube's processes, with complaints centering on inaccuracies in financial projections and business viability claims. While the platform maintains that it conducts thorough checks—including legal reviews, financial audits, and plausibility assessments—to verify pitch accuracy, critics have called for stricter oversight to prevent losses from unchecked exaggerations. In response to such concerns, Crowdcube has defended its practices as compliant with FCA guidelines but acknowledged the need for ongoing enhancements to protections. Following a 50% drop in turnover in its 2023 financial year amid economic challenges, Crowdcube reported a return to growth in 2024, with revenue increasing 33% to £10.1 million as announced in 2025. However, the slowdown in activity in 2025, exacerbated by reduced appetite and fewer successful raises, has continued to spotlight challenges in providing through secondary sales, where limited disclosure on share valuations has prompted unease. In September 2025, Crowdcube launched its Growth Series in partnership with Bolt Secondary to unlock for in Europe's top private growth companies. To address these issues, Crowdcube updated its investor and company terms in September 2025, incorporating clarifications on fees, risk disclosures, and secondary market protocols, alongside expanded investor education resources such as detailed guides on and . These measures aim to mitigate complaints by improving transparency and compliance, reflecting the platform's efforts to rebuild trust following prior regulatory interventions.

References

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