Cubed issue 2 by Crowdcube

CUBED Issue 2 - Q3 2016

cubed - Foreword

Foreword Welcome to the second issue of Cubed. As you’ll have seen, we have had an astounding few months here at Crowdcube, as we raised a total of £7.7m, launched our iOS app and have amassed the UK’s largest investor community, which now stands at more than 300,000 people. We couldn’t have achieved this without the support from our investor community and great British businesses, which are at the heart of Crowdcube.

Luke Lang Co-founder

The finance raised through our platform is helping businesses to boost UK exports through overseas expansion, create thousands of new jobs and led to the opening of offices, shops, bars, restaurants, fitness centres and much, much more - as you’ll read through this issue. A total of £5m has been delivered in returns for investors, including equity exits from E-Car Club, Camden Town Brewery and Wool & the Gang, along with bond interest repayments. This magazine sets out to show you more about our industry, whether its crowdfunding, finance or technology, and the effect your investment is having on businesses across the UK. Enjoy and read at your leisure.

cubed - Contents

Crowdcube

Investing

Crowdcube’s raise

Who are the crowd?

Our plans for growth

Crowdcube gives everyone the opportunity to

Investors in Crowdcube

A few words from our Funded Club members

Invest anytime, anywhere

Equity crowdfunding investment like you’ve never seen before

Our rapidly growing crowd of 300,000

become an ‘Armchair Dragon’ 30

Proud of our crowd

Investor insight into investing on Crowdcube

Building a well-diversified portfolio

Help balance the risk of losing capital by investing across sectors and stages

members

See what over 300,000 of our members equates to

Crowdcube Spain approved by regulator

Crowdcube is now internationally regulated in two countries

Crowdfunding myths debunked

There are a number of myths that need to be dispelled

cubed - Contents

Industry

Clean technology

Funded Club

Latest industry data

LICKALIX

A report by Beauhurst

we caught up with the

The rise of fintech

Britain is the leading fintech centre in the world

Post-Brexit Britain

We’ve got ambitious plans for the future

Spotlight on the UK’s flourishing A.I. startup scene

Equity investments in A.I. saw a record-breaking 143 deals in Q1 globally

Industry spotlight: cleantech and crowdfunding Guest article with Andrew Wordsworth

Pavegen timeline

Milestones and

founders 82

are they now?

Cleantech business POD Point leads the way

Find out how the business has grown

Updates from our Funded Club

106 Stockbrokers turned entrepreneurs turn to

Hear from the entrepreneurs behind the world’s first crowdfunding exit

90 Newbites

Erik Fairbairn, founder and CEO of POD Point, shares the success of his campaign

Escape the City is on a mission to help one million people improve their lifestyle

achievements 70

Escape the City, where

the crowd

We welcomed ISO Spaces into the Funded Club after successfully reaching their maximum target

112 goHenry’s record raise of £3.99m

A digital banking solution that aims to make kids smarter at managing money than their parents

116 Vivobarefoot discount 118 Million club 120 Key achievements

Crowdcube

What a quarter at Crowdcube. Not only have we raised a total of ÂŁ7.7m, we have launched the Crowdcube App and now have a community of over 300,000 members.

cubed - Crowdcube raise

Thanks to the crowd, we raised £7.7 million Thank you to the 3,503 crowd investors, alongside prominent venture capital firm Balderton Capital, who helped us raise £7.7 million in growth capital. This sets a new record for the largest equity crowdfunding raise on a UK platform, the second being goHenry after raising £3.99m in June 2016. Long-term venture capital backers Balderton Capital invested £1 million in this latest round, in what is its third investment into Crowdcube.

cubed - Crowdcube raise

A huge thank you from the Exeter team

cubed - Crowdcube raise The news could well stun some industry commentators who predicted that Brexit would all but destroy funding for promising fintech businesses. Crowdcube has played a key role in cementing Britain’s position as a global fintech leader, and this shows that investors’ appetite for backing ambitious British businesses seeking growth capital remains as strong as ever. We will use the finance to realise our growth plans, which are aimed at providing both investors and businesses with opportunities that make investment easy and rewarding. This includes an ambitious move to develop and offer a secondary trading environment on the Crowdcube platform that will give shareholders of any UK private company the ability to sell their stake, if demand exists. The exchange will create immediate liquidity for people with shares in any private British business, meaning that potential returns are not limited solely to major exit events such as trade sale or IPOs. We’ve shown that ambitious later-stage British businesses can raise serious amounts of growth capital on Crowdcube. Our record-breaking £7.7 million raise, which is the 41st fundraise over £1 million in our history, is yet another watershed moment that will help us execute our plans to pioneer secondary liquidity for investors, whilst facilitating larger rounds to fund the growth of Britain’s ambitious businesses. As we embark on Crowdcube’s next stage of growth we’re excited for the future and are pleased to have 3,503 new investors join us on the journey.

cubed - Crowdcube raise This is the fourth time that we’ve raised finance from our crowd, which now stands at 300,000 people. This time we published a prospectus, which enabled us to raise more than the €5 million limit set by current EU rules, which was hit in just four hours. The average investment made in this round was £1,824 and the largest was £1 million, which came from a private investor. 82% of investors ‘came back for more’ after previously backing companies that have crowdfunded on our platform. On average, they hold shares in seven companies, with an average portfolio value of £5,871. Our growth plans that will be supported by the finance raised include: Providing unrivalled investment opportunities – targeting more venture and growth-stage businesses, many of which – such as BrewDog, goHenry and Sugru – are choosing to crowdfund. Fund businesses through the world’s largest investor community – 300,000 members already on Crowdcube, members numbers forecasted to hit 500,000 by the end of 2017. Deliver investor returns – plans to pioneer secondary liquidity to give early investors in private UK companies the opportunity to sell their shares if demand exists.

Our London team and co-founders

cubed - Crowdcube raise

cubed - Investors in Crowdcube

Investors in Crowdcube We spoke to our Funded Club members Grind & Co., goHenry and POD Point to find out why the companies’ founders backed Crowdcube in our latest round of funding.

goHenry “The UK and Europe have created an excellent regulatory framework to help SMEs raise funds and grow faster. But this framework would remain what it is, i.e. nice policy words, if companies such as Crowdcube weren’t here to bring to life the desire of retail investors to back the causes they want to see succeed on a global scale.” Alex Zivoder, CEO of goHenry

cubed - Investors in Crowdcube

Grind & Co. “Since our £1.3m raise I have lots of people contact me and ask for help and advice with crowdfunding, and I don’t hesitate to tell them to go with Crowdcube. The size of their audience and the pace at which they are developing makes them the clear market leader.” David Abrahamovitch, Co-founder of Grind & Co.

POD Point “I decided to invest in Crowdcube as it provides an opportunity to invest in something that’s fundamental to the UK’s entrepreneurial endeavours. I know the senior team at Crowdcube and they’re doing a great job for the right reasons and I wanted to support that.” Erik Fairbairn Founder of POD Point

cubed - Crowdcube App

Invest Anytime, anywhere Whilst catching some winter sun.

Raised ÂŁ753,430 from 310 investors. Capital at risk

cubed - Crowdcube App

Throughout the day we all have pockets of time to spare, and instinctively reach for our phones. Perhaps it’s while commuting to work, waiting to meet friends for a drink, lying on a sunlounger in the Mediterranean, or camping in cloudy Cornwall. From today you can seize these moments to catch up on the latest companies raising finance, using the new Crowdcube iOS app, wherever you are. The Crowdcube App gives you easy access to all the investment opportunities on Crowdcube within just a couple of clicks. New opportunities are synced to the app which you can read at any time, even when you’re offline. You can browse, follow and invest quickly and easily using Apple Pay, which is also now offered on the Crowdcube website. To help you keep track of what’s new and interesting, the app can notify you when new opportunities launch, and you can archive any that don’t take your fancy, just like managing your email. Over time we plan to offer the complete Crowdcube investor experience in the app, including access to discussions and your portfolio, while also offering the app experience on non-iOS devices. In the meantime you can continue to access all aspects of Crowdcube on any mobile device using our website.

cubed - Crowdcube App

Discover Receive notifications and be the first to know about new investment opportunities.

Browse View the businesses pitching for your investment when on the move, and when offline.

Follow Get the latest updates by following the businesses youâ&#x20AC;&#x2122;re interested in.

Invest Invest quickly and easily in great British businesses.

cubed - 300,000 members

Our rapidly growing crowd of 300,000 members In August our 300,000th member joined Crowdcube and our evergrowing crowd of everyday, sophisticated and high net worthsâ&#x20AC;&#x2122; have collectively invested over ÂŁ190m on Crowdcube to date. A true demonstration of the power of the crowd.

Equivalent to...

the population of 136 Isles of Scilly

cubed - 300,000 members

6,250 flights in the Airlander 10

filling a BrewDog bar every day for four years!

or simply 300,000 people funding over 450 raises on Crowdcube

cubed - 300,000 members

To date, over 450 raises have been financed through Crowdcube, helping businesses to boost UK exports by expanding overseas, creating thousands of new jobs and opening offices, shops, bars, restaurants, fitness centres and much, much more. Here’s just a few examples of how the money invested has helped businesses grow:

Pip & Nut went on to win numerous awards, secure further private funding, listed its products in Fortnum & Mason, 215 Marks and Spencer stores and 473 Sainsbury’s stores.

Plan Bee is an ethical and sustainable eco-innovation business that raised on Crowdcube in 2014. Since then, the company has established its craft brewery creating honey beer to continue driving the growing movement to protect and preserve Britain’s dwindling honeybee population. The sustainable craft beer is now listed in Aldi and Plan Bee’s revenue increased by 57% over the last 12 month period.

Keuken is now open for business. The company has opened its first store near Liverpool Street Station (8 Eldon Street to be exact).

cubed - 300,000 members

LICKALIX has secured over 200 stockists of its natural icelollies, expanded its kitchen and new product line and has just released a book of recipes!

Tipplesworth opened its Cocktail Emporium shop in Teddington in May, selling products and events directly to the public.

The Yorkshire Meatball Co. is due to hit the shelves in ASDA and Tesco across Yorkshire, followed by a nationwide launch into Morrisons over the next two months.

cubed - Crowdcube Spain

Crowdcube Spain approved by regulator Crowdcube is now internationally regulated in two countries We’re pleased to share the news that Crowdcube Spain has been authorised by the regulatory body of the Spanish stock market (CNMV) as a crowdfunding platform. Crowdcube is now internationally regulated in two countries; by the Financial Conduct Authority (FCA) in the United Kingdom and by the Comisión Nacional de Mercado de Valores (CNMV) in Spain. Here’s a few words from Pepe, who heads up the team in our Barcelona office, “We are very pleased with this new accreditation, because for the first time in history, Spanish startups and SMEs can benefit from a regulated market, where capital increase operations can be undertaken in an orderly way. There are an increasing number of businesses that opt for equity crowdfunding instead of turning to traditional sources of financing.”

cubed - Crowdcube Spain

Following the enforcement of the Law to Promote Business Financing in April 2015, CNMV authorisation has been necessary for Crowdcube Spain in order to operate as a participatory funding platform. At the same time, the CNMV is the regulatory body of the sector, and oversees the activity of all the platforms. Having an authorised platform in Spain strengthens our position in Europe regardless of whether we are in or out of the European Union. In just five short years we have firmly established our position as a global fintech pioneer and a leader in the UK and Spain, but weâ&#x20AC;&#x2122;re not stopping there. We have ambitious plans for the future and we welcome investors in Spain and the UK to join us in our next exciting phase of growth.

Investor

Take a look at who you are investing alongside on Crowdcube, read an overview on building a well-diversified portfolio and find out how weâ&#x20AC;&#x2122;re fighting against those crowdfunding myths.

cubed - Who are the crowd?

Who are the crowd? Crowdfunding is an alternative method of financing a business, which allows everyday investors, professionals and venture capitalists to invest as little or as much as they like, typically through an online platform. At Crowdcube, we have a community of over 300,000 likeminded people who pool their money and knowledge to back startup, early and growth stage businesses. Crowdcube gives everyone the opportunity to become an ‘Armchair Dragon’, build an investment portfolio and support great British businesses.

So who exactly are ‘the crowd’? Well there are four investor categories: Everyday, Advised, Sophisticated and High Net Worth, which are outlined in more detail here:

Everyday Investor:

Advised Investor:

Anyone who is legally entitled to invest can become an everyday investor. You just need to agree to invest no more than 10% of your net assets into company shares, bonds, funds or any other securities that are not listed or sold on a stock exchange. “Net assets” in this case means all of your financial resources, apart from the value of your main home, after deducting your expenses and any debts you may have. This is why the Financial Conduct Authority refer to them as ‘Restricted Investors’.

An ‘advised investor’ is someone who uses the services of a financial advisor or wealth manager, who provides them with advice about whether an investment opportunity is suitable for them.

cubed - Who are the crowd?

Self-Certified Sophisticated Investor:

High Net Worth Investor:

This category is for people who have invested in more than one unlisted company (including via Crowdcube) in the last two years. This investor type would have either been a member of a business angel syndicate or network for at least six months, a director of a company with an annual turnover of at least £1 million in the last two years or worked in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises.

This category is for people who have invested in more than one unlisted company (including via Crowdcube) in the last two years. A high net worth individual would either have been a member of a business angel syndicate or network for at least six months, have an annual income of £100,000 or more or held net assets to the value of at least £250,000.

Alongside these investor categories, you’ve probably heard of angels and venture capital (VC) firms. These typically fall into the sophisticated or high net worth classes as they would generally invest larger amounts into businesses. Angel investors generally invest up to £1 million and put their own finance towards small, early-stage businesses. Whereas VC investment comes from firms, which could include a team of professionals to help and advise those businesses. Generally the businesses that attract VCs are ones that have demonstrable traction and have the ability to scale the business and increase its market share. The UK Business Angel Association’s definition is that “angel investment differs from venture capital funds or venture capital trusts which invest in businesses through managed funds, raised with private or public money. The fund manager invests the money on behalf of the fund which has to make a return for the fund’s investors.” With more businesses from a range of sectors and stages of growth turning to the crowd, the breadth and depth of new ideas and investment opportunities available to investors on Crowdcube is growing. Last year, Beauhurst also predicted that half of all seed-stage deals and 20% of venture-stage deals in 2015 would involve crowdfunding platforms, and this year we’ve seen this sector continuing to grow. We’ve seen a spike in investment activity from the UK’s leading VCs, such as Index Ventures, Passion Capital and Octopus Investments, just to name a few, investing alongside the crowd on Crowdcube.

cubed - Proud of our Crowd

Proud of our crowd We are delighted to continue the ‘Proud of our Crowd’ series with our next investor insight into investing on Crowdcube.

Hilary Fitzgerald is 41, lives in Southwark and works as a freelance business consultant. Having had careers in aerospace engineering, business software, consultancy and investment banking, she now splits her time between corporate clients, startups/SMEs, and hanging out with her niece and nephew in Munich. She loves to help clients develop business strategy and plans, solve business problems and make their businesses work more efficiently. Although Hilary doesn’t specifically target industries, in her words she “seems to have ended up investing in several beer-related companies, as well as food, music, medical devices, finance, law, technology, industrial lighting and even selling cows!”

Hilary Fitzgerald Freelance business consultant and Crowdcube investor

cubed - Proud of our Crowd What interests you in investing through Crowdcube? I enjoy going on the journey: following the growth of young, exciting and innovative companies, and subsequently sharing the highs and learning from the lows.

“...following the growth of young, exciting and innovative companies,...”

What do you look for before investing in a business? It varies from business to business, but I will ask myself questions such as: am I interested in the product? Am I or would I be a customer? Is there a big enough market? Who are the competition? What are the credentials of the entrepreneurs? Do I think they have what it takes to succeed? How much equity is being offered? Does that tie in with the financials/business plan projections? Is SEIS or EIS tax relief being offered? What rewards are offered? Is this just something worthwhile, and the potential returns are irrelevant?

“...I will ask myself questions such as: am I interested in the product? Am I or would I be a customer? Is there a big enough market? Who are the competition? What are the credentials of the entrepreneurs? Do I think they have what it takes to succeed?...”

However, the time I spend on analysis varies depending on how much I invest. Sometimes I might just stick in a small amount based on gut feel. These are early-stage, risky businesses, so you have to accept that you’re not going to always get it right. Are there any elements of the pitch that you value above the others? If the equity is too low I will probably avoid investing, unless the pitch really stands out. The product and people are important to me, so I will usually check out the founders on LinkedIn.

“...always check the forum before investing. Ultimately, you must make your own decisions, but your fellow investors can be useful for raising red flags...”

The other thing I would advise is to always check the forum before investing. Ultimately, you must make your own decisions, but your fellow investors can be useful for raising red flags (eg: business plan anomalies), and for teaching you what sort of questions to ask when evaluating an investment. If you’re not sure whether to go ahead, follow the pitch, then wait to see what questions other potential investors raise (and/or attend an event).

cubed - Proud of our Crowd What has been your experience with investing so far? Well, I’ve had one company fold and one sell out (Lets Rent and Camden Town Brewery), so overall I’ve roughly broke even. But I now have a number of investments which have survived the 2-3 year mark, so hopefully some of them will make it. It’s been an interesting experience overall. I’ve learnt a lot and had exposure to some cool experiences, including brewing beer and hanging out with a band.

“...It’s been an interesting experience overall. I’ve learnt a lot and had exposure to some cool experiences, including brewing beer and hanging out with a band.”

Have you talked directly to any of the companies, if so, has this been valuable in your decision whether or not to invest? For my largest investment I built my own excel model of the financial projections, then met the founder to go through it and grill him. He even made a few updates based on this feedback. For my next largest investment I also met the founders, asked lots of questions and was impressed by their experience and the way they presented. I’ve also attended Crowdcube presentation evenings and met a few other founders. The way they come across, and the opportunity to get closer to the product, definitely does have a bearing on whether I invest. I think I went to one event with an interest in two companies, but ended up investing in two different companies altogether. What advice would you give to fellow investors? First off, crowdfunding is still a very new and risky platform, so never invest what you cannot afford to lose. Secondly, I think the reasons why you’re investing (e.g. for fun, to learn, for returns, for the greater good, or for a mixture) should help to inform your decisions on which investments to choose, and how much risk you want to take. We all know about diversified portfolios, but think about whether you want to diversify with one crowdfunding investment and a mixture of other products, or also diversify within crowdfunding. I would never advise it as the only type of investment.

“...I also met the founders, asked lots of questions and was impressed by their experience and the way they presented...The way they come across, and the opportunity to get closer to the product, definitely does have a bearing on whether I invest...”

“...crowdfunding is still a very new and risky platform, so never invest what you cannot afford to lose.”

cubed - Proud of our Crowd Finally, what are your words of wisdom for businesses looking to raise with Crowdcube: Think about the “understandability” and potential market for your product or service… In my opinion, I think crowdfunding is best-suited to B2C businesses such as retail products, where the crowd can easily understand what is being developed, and can act as advocates and promoters of the product. For retail, it’s good to have a mix of big and small investors, so you still get the business connections, but also get help with the wider customer engagement and word-of-mouth referrals. Having one or more big investors may also help to protect the small investors, as it means that someone has the power to scrutinise the entrepreneurs, and hold them to account.

“...it’s good to have a mix of big and small investors, so you still get the business connections, but also help with the wider customer engagement.”

I also think Business Plans are important… You never really “finish” your plan – and often people will request it, but never read it… But the point is to have gone through the thinking process and to gain a better understanding of what you are really trying to achieve. Also – talking to people about it could help you to anticipate the questions which investors may raise. Finally – especially since the rise in popularity of crowdfunding – I really do think it’s important to have pre-raised (or have firm commitments) on a fair chunk of your funding. Whilst most investors are smart enough to make their own decisions, I do believe they’re more likely to notice a pitch which is better-funded, and it means you have more people spreading the word… As the saying goes, ‘success breeds success!’

cubed - Building a well-diversified portfolio

Building a well-diversified portfolio With new investment opportunities added to Crowdcube every week, investors can choose from startups, early and growth stage businesses, from a brewery to a challenger bank, a consumer brand or even an airship - the choice is yours. When investing, particularly in seed or early stage businesses, it is important to diversify your portfolio by making a range of investments. This is to help balance the risk of losing capital by investing across sectors and stages. Whilst there are still risks involved, spreading your money across multiple and different types of investment can provide a cushion to adverse market conditions and the failure of some startups. To give you an overview of how you can build an investment portfolio, letâ&#x20AC;&#x2122;s first take a look at the businesses that seek crowdfunding on Crowdcube. Here is our classification of business stages:

cubed - Building a well-diversified portfolio

Seed: Typically the initial stage of equity funding from external investors to prove product and market fit. A few examples of funded seedstage businesses include The Chocolate Bear Kitchen, The London Jam Factory, Cape Fisheries and Savvy Foods.

Early Stage: Typically raising capital to develop its product, begin to scale and demonstrate commercial traction. A few examples of funded early-stage businesses include The Italian Job, Good & Proper Tea, Classlist and WiseAlpha.

Growth: The product and market fit are well defined with demonstrable traction, the company is raising capital to scale the business and increase market share. Examples of funded growth-stage businesses include goHenry, Sugru, BrewDog, Vivobarefoot and POD Point.

cubed - Building a well-diversified portfolio

Getting started According to a recent Nesta* report, it is recommended that investors manage risk by selecting a wide variety of investments within their portfolio. So to do this, you could set yourself a timeframe and allocated spend, say a yearly budget and invest across a variety of fundraising businesses that you have researched on Crowdcube. Alongside this, you may decide to invest into an ISA, pension bonds or other forms of investment, which carry different levels of risk to equity crowdfunding. When managing your portfolio, you could divide your investments by business stage/maturity, sectors, geography, timeframe and investment type. For example, if you have invested all of your money within the UK or US, whether itâ&#x20AC;&#x2122;s through businesses, banks or funds and there is a change to market conditions, this leaves you sensitive to any changes, i.e. a recession, change of government or regulation.

cubed - Building a well-diversified portfolio

What happens next? Whether you are an everyday, advised, sophisticated or high net worth investor, it is important to review your portfolio regularly and follow the businesses you have invested in. If you have invested in a businesses on Crowdcube, you can keep up to date with its progress through the funded company pages and articles on Crowdcube, as well as the investor updates sent by the businesses. The funded company pages on Crowdcube include business details, company status, information from Companies House, news articles, key financials, the team and details of the original investment opportunity (pitch page). When investing in startups, if you are a UK taxpayer you can claim tax relief through the SEIS or EIS schemes. These tax relief schemes benefit investors as you can claim back 50% for SEIS and 30% for EIS along with Capital Gains Tax benefits. You may also be eligible for loss relief if the company goes into liquidation. When browsing through investment opportunities on Crowdcube, you will be able to see the status of EIS or SEIS tax relief on each individual pitch page. Please note that you should always seek independent tax advice if you are unsure of any aspect of the process and the availability of tax relief depends on your individual and the companyâ&#x20AC;&#x2122;s ongoing circumstances and applicable law.

*Nesta is an innovation charity with a mission to help people and organisations bring great ideas to life. We are dedicated to supporting ideas that can help improve all our lives, with activities ranging from early-stage investment to in-depth research and practical programmes.

cubed - Crowdfunding myths

Crowdfunding myths debunked As crowdfunding continues to grow at a rapid pace, as it becomes increasingly popular with businesses and investors alike, it’s only natural that a few mistaken beliefs will emerge. Investment crowdfunding has come a long way in the last five years. Hundreds of businesses of all sizes and from every sector have successfully raised finance from ‘the crowd’, while savvy and sophisticated investors’ appetite for crowdfunding investments is unwavering. As a result, crowdfunding is now recognised as a mainstream finance option – but there are a number of myths developing that need to be dispelled.

cubed - Crowdfunding myths

cubed - Crowdfunding myths The myth: “You’ll never get venture capital (VC) investment following crowdfunding.” The truth is it is now commonplace for VCs to collaborate and diversify their portfolios by investing on Crowdcube. At the last count we’d worked with more than a dozen venture capital or institutional investors, for instance: JustPark had BMW i Ventures and Index Ventures on board; and Adzuna was backed by Index Ventures, Passion Capital and The Acceleration Group. In addition, Balderton Capital, DN Capital and the UK government, through the Mayor of London’s landmark London Co-Investment Fund (LCIF), are other prominent investors on Crowdcube, alongside the crowd. The myth: “The crowd is unsophisticated.” The crowd is a diverse and savvy bunch. For instance, Crowdcube’s investor community is highly educated (average of six years education post 16), affluent (average salary over £70,000 pa) and many work for impressive global brands – our top six investor employers are PwC, Accenture, JP Morgan, Deloitte, IBM and Google. Moreover, 60% of the £100m invested through Crowdcube in 2015 came from ‘sophisticated investors’ or ‘highnet-worth individuals’. It is also important to remember that the crowd brings to bear its collective wisdom alongside the pooling of capital. Diverse experiences, backgrounds, expertise and capital all contribute to whether a business reaches its funding target. In our opinion, this collective pooling of knowledge must be a better approach than lone business angels making investment decisions in isolation. The myth: “Crowdfunding is just for startups.” The AltFi Data report goes a long way to dispel the myth that crowdfunding is just for startups and seed capital, noting that the average age of a business is over three-years-old. This statistic surprised many, but not us. Our investors like to back startups, but are also drawn heavily to more established businesses that can demonstrate traction. This has dovetailed with the growing average deal size – now up to £440,000 – and a strong trend towards highly successful, proven entrepreneurs opting to use crowdfunding. The last 12 months has seen previous founders/executives of brands such as eBay, Zoopla, Poundland, easyGroup, MTV, Amazon, ASOS, Innocent and Made.com raise finance on Crowdcube.

cubed - Crowdfunding myths

The myth: “Investors will never see any returns.” The last two years have been evident that this statement is clearly a myth, as it’s already happening as £5m has been returned to investors. Last year E-Car Club became the world’s first crowdfunded ‘exit’ when it was sold to Europcar, giving the 63 people who invested £100,000 on Crowdcube in 2013 a multiple return on their investment. Camden Town Brewery was also acquired by AB InBev at the end of 2015, which was just eight months after its raise. Also giving investors a multiple return on their investment. Equity investors on Crowdcube have received their third return in 12 months following the acquisition of disruptive global DIY fashion brand Wool and the Gang by BlueGem Capital Partners. In addition, several of the businesses that raised finance through a bond on Crowdcube, such as the Eden Project, River Cottage and Chilango, have made interest payments to their investors. The myth: “Crowdfunding platforms are the unregulated ‘rebels’ of the finance industry.” Incorrect – credible platforms must be authorised and regulated by the Financial Conduct Authority (FCA), the same as any other reputable financial services provider. The UKCFA (UK Crowdfunding Association) and its members (including Crowdcube) have worked closely with the FCA to create a new regulatory framework, balancing consumer protection with regulation.

cubed - Crowdfunding myths

The myth: “Companies raising on crowdfunding sites are overvalued.” It is important to remember that a business’s valuation is very subjective. If anything, valuations on crowdfunding sites are more transparent, open and fair because it’s the members of the crowd who decide whether the valuation seems accurate, and if the business is worth investing in. Investors discuss valuations openly in our forums, and sometimes a company will even re-evaluate its position based on feedback from the crowd. The crowdfunding industry is seeing higher valuations overall, which reflect the changing profile of the businesses that are pitching: they’re bigger in size, more established, and have seasoned teams behind them. On Crowdcube, 75% of businesses are early or growth stage, and only 25% startups. Early concerns that crowdfunding would be a ‘passing fad’ may have been firmly quashed, but some myths do persist. One of the key priorities for the crowdfunding industry is to set the record straight, giving more businesses and investors the confidence to get involved and enjoy the benefits the approach can bring, which can extend well beyond just the financial backing.

Industry

Bringing you the latest data on the equity crowdfunding industry, along with guest articles on the flourishing Artificial Intelligence sector and the outlook on Brexit for the London tech scene.

cubed - Latest industry data

Latest industry data Beauhurst, a leading source of data tracking the UK’s private high-growth companies, has released a new report showing that Crowdcube “facilitated the most transactions directly from the crowd to the companies” on the platform. We completed 64 deals that the crowd invested in, during the first half of 2016, with Seedrs at 41 and Syndicate Room at 13.

80 70 60

Crowdcube

Deals

50 40

Seedrs

30 20 10 0

Syndicate Room

cubed - Latest industry data

More than 1 in 10 equity fundraises in the UK have been completed on Crowdcube in the first half of 2016... More than 1 in 10 equity fundraises in the UK have been completed on Crowdcube in the first half of 2016, according to a report published by Beauhurst. With over ÂŁ58m having been successfully raised since the start of 2016, weâ&#x20AC;&#x2122;re seeing the size of funding rounds on the up as more established and often VC-backed businesses are choosing to raise finance on Crowdcube.

cubed - Latest industry data

Monzo reach £1m in 96 seconds... Some of the most noteworthy raises so far this year include goHenry, which set a new record after raising £3.99m, Monzo reaching £1m in 96 seconds and Revolut, which recently raised over £1m, not to mention our own raise, which totalled just shy of £8m – all of which goes to demonstrate that investors’ appetite to back great British businesses is unwavering.

cubed - Latest industry data

our crowd have invested more than £190 million into over 450 businesses since we launched in 2011... To date, our crowd of investors, the largest in the world, have invested more than £190 million into over 450 businesses since we launched in 2011, with £137 million invested since the start of 2015 alone. The equity crowdfunding sector has grown at a rapid pace since it came into existence just five years ago, now estimated to be worth £245 million in the UK alone, the once alternative funding route is now a staple and vital source of finance for the UK’s flourishing entrepreneurial market. You can download and view the full report from Beauhurst here: http://about.beauhurst.com/the-deal-h1-16

cubed - The rise of fintech

The rise of fintech Not only does the plethora of articles, events and awards showcase the popularity of fintech, but the fact that Britain is the leading fintech centre in the world (according to a report by EY) proves an exciting time for digital finance and the appetite for both entrepreneurs and investors. The established banks haven’t kept the pace with emerging digital technologies, and it’s the fintech firms and alternative finance providers that have filled the void. A growing number of fintech businesses are turning to our crowd to raise finance and many of which are choosing to co-fund investment rounds through crowdfunding alongside venture capital backing. In the last three months alone, three fintech companies have successfully raised finance on Crowdcube, and we have more in the pipeline. These businesses are just a few that are challenging the banking and finance establishment. At Crowdcube we’re seeing the revolution of the fintech sector first-hand. The size of funding rounds and sheer speed at which the businesses are funding indicate the crowd’s support of simplifying and democratising finance by breaking down barriers to the way that financial products are delivered and accessed by retail and corporate customers.

In June, Bank of England governor Mark Carney, said: “Fintech will change the nature of money, shake the foundations of central banking and deliver nothing less than a democratic revolution for all who use financial services.”

All this innovation should mean that, as Mr Carney said: “With time, fintech could mean a more open, more transparent, and more democratic global financial system.”

cubed - The rise of fintech

Monzo, which funded in record breaking speed in March 2016, bills itself as “a bank as smart as your phone”. An app that updates your balance instantly, gives intelligent notifications, and is easy to use. “We’re trying to build the best bank on the planet and we want you on board”. Monzo raised £1m in just 96 seconds.

Another banking solution, but one designed for children is goHenry, a business that raised just shy of £4m, the largest amount ever raised on Crowdcube (after our own raise). goHenry’s pre-paid debit card and app comes with unique parental controls to help teach young people good money habits. KPMG and H2 Ventures named goHenry one of the world’s “Leading 100” fintech innovators.

WiseAlpha raised £580,000 earlier this year for its platform that allows people to invest in secured corporate loans of blue-chip British brand name companies. This gives people the opportunity to earn a higher rate of interest and diversify their portfolio.

Revolut is a multicurrency solution enabling customers to manage and move money in different currencies. In under a year, Revolut has acquired over 200,000 customers and over US$500 million in customer funds has been handled. Transactions are growing at an average of 36% every month with 1,500 new customers joining every day.

Let’s also not forget Crowdcube. We are no longer being seen as an ‘alternative method of raising finance’ and our success has helped startups and, increasingly, larger and more established businesses to raise seed and growth finance. The crowdfunding sector grew 192% in 2015 and was worth £245 million according to Nesta. We have helped over 450 businesses raise £190 million in the last five years and have over 300,000 registered investors who can invest anything from £10 to £1m or more.

cubed - The rise of fintech

Post-Brexit Britain The UK has a long and proud history as a hotbed of entrepreneurialism and innovation. In just five short years we have firmly established our position as a global fintech pioneer and the UK’s dominant equity crowdfunding platform but we’re not stopping there. We’ve got ambitious plans for the future and we were excited to be able to give the crowd the opportunity to join us on our next exciting phase of growth. The UK’s growing investment crowdfunding market, which was estimated to be worth £245 million in 2015, is vibrant post-Brexit.

cubed - The rise of fintech

Laurence Kemball-Cook, Founder of Pavegen, tells us why tech startups should be the number one priority post-brexit: Starting a tech-company in 2009 was never going to be easy. The recession meant there was a shortage of funding from the government, making it harder for new companies to bring ideas to life. This was especially the case when I sought potential venture capital investors – they either wanted to take advantage of my idea, or simply disregarded my request altogether. 2016 is a different story. Today, the term ‘startup’ is positive, promising and revolutionary. There are more millennials in our capital city than any other part of the UK, and due to the great support available for young companies it makes London the most attractive place for an entrepreneur to begin their journey. Last year, £1.3 billion and 20,000 jobs were generated by London based startup companies. My company has been based here since 2012, and it has allowed me to see the recent success of the startup sector which has been made possible through accelerators and investment platforms that are now widely accessible. Crowdcube, Techstars, Shell Livewire and The Bakery have all contributed to making London’s tech startup scene more successful, supporting young companies along their journey to becoming global enterprises. Through the help of Crowdcube, Pavegen was able to obtain £2 million and 1,473 investors, enabling us to launch our new product in May 2016. Within the last 5 years we have transformed from a small 5-man team, into a strong and confident company with 40 employees worldwide. Without this support, I doubt we would be in the secure position we are currently in. Pavegen therefore owes much of its success to being based in London and the availability of investment and support platforms, such as Crowdcube, to allow young businesses to succeed.

cubed - A.I. spotlight

Spotlight on the UK’s flourishing A.I. startup scene Recently Twitter announced its $150m acquisition of Magic Pony, which has yet again put the spotlight on the UK’s burgeoning A.I. (Artificial Intelligence) tech scene. Equity investments in A.I. saw a record-breaking 143 deals in Q1 globally, according to research firm CB insights, including an increasing amount of corporate VCs backing British startups. Khosla Ventures, Intel Capital, Data Collective and Google Ventures led the rankings as being the most active investors in the space since 2011. AI Landscape: Global Yearly Financing History 2011-2015 397 307

196 $2,177

131

$2,388

67 $282

$415

2011

2012

$757 2014

2013 Disclosed Investment ($M)

2015

Deals

www.cbinsights.com

Putting aside A.I.’s popularised science fiction connotations, it is useful to define A.I. in this context as primarily referring to cognitive computing. In other words, the development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making, and translation between languages.

Over the course of the last five years, Crowdcube has had the pleasure to work with some of the UK’s most exciting entrepreneurs including a number of A.I.-powered startups. We recently caught up with Kwiziq – an A.I. language coach that helps people learn a second language – to get their thoughts on the sector and find out how they had progressed since raising £200k from 67 investors in August last year.

cubed - A.I. spotlight

Gareth Davies, co-founder & CEO of Kwiziq said:

“A.I. is the future of education. I think it’s one of the most exciting areas to be working in. In fact, Wendy and Joe White (Kwiziq board advisors and close friends) are general partners of Entrepreneur First. They helped create and sell Magic Pony. At Kwiziq we are using a number of A.I. techniques to solve the problem intermediate students experience learning online. Learning a language is a highly non-linear process and all students beyond the beginner level have unique needs. We use A.I. to work out what those needs are and match that to learning content, both our own and 3rd party. Everyone can learn a language faster with intelligent help!” Kwiziq raised investment in order to further develop their product range and accelerate R&D. They have since seen 14% average monthly revenue growth, are soon to hit half a million ‘Kwizzes’ taken and their user base is up 215% – all achieved without having spent a penny on marketing. We are excited to see what they have in store with their planned site redesign this year.

cubed - A.I. spotlight

Indeed for A.I. startups with a clear B2C focus, raising investment via equity crowdfunding can make a lot of sense from a user acquisition point of view – as demonstrated by Funded Club company, Kwiziq. But even for non consumer-oriented startups, running a crowdfunding campaign can be an important exercise in educating the wider public about the remarkable applications A.I. can have for businesses or enterprise. It can also very much lead to surprising outcomes: whether it be finding that new PhD recruit, signing on a new strategic partnership or securing key press coverage – the benefits of running a highly public fund-raise are abundant. One of the reasons there has been increasing investor interest is also as mergers and acquisitions in the space has also been rising steadily. CB insights finds that most A.I. startups were acquired within the first 4 years of initial funding, making the potential timeline for returns very attractive. Undeniably, the UK has been at the forefront of this revolution and has seen a host of successful exits in the space. From Google’s $600m acquisition of Deepmind in 2014 to Apple’s acquisition of Vocal IQ, a Cambridge University spinout, in late 2015 or more recently Microsoft’s $250m acquisition of Swiftkey – who develops text prediction software for mobile devices – in Feb 2016, US tech titans have been actively hunting for great technology and talent to join their teams. With 24 exits to date this year, it paints an attractive growth story for the market. Artiﬁcial Intelligence: Yearly Exit History 2011-2016YTD (as of 6/15/2016)

36 31

1 5

2011

2012

2013

2014 M&A

2015

2016YTD

IPO

www.cbinsights.com

Clean Technology

Sector news from the cleantech sector. With insights from industry specialists and the stories of Funded Club members POD Point, Pavegen and E-Car Club.

cubed - Industry spotlight

Guest Article

Industry spotlight: cleantech and crowdfunding 60

cubed - Industry spotlight

Andrew Wordsworth

Andrew Wordsworth is the Managing Director of Sustainable Venture Development Partners, which has established itself as the leading UK accelerator for low carbon and sustainable businesses. Over the last five years Sustainable Ventures has created and launched six companies, including E-Car Club, Powervault, Autotrip and CoControl, which have attracted over ÂŁ2.5m of equity investment across seven campaigns. In July 2015, E-Car Club was acquired by Europcar, creating the UKâ&#x20AC;&#x2122;s first equity crowdfunding exit. Sustainable Ventures is located at Sustainable Bridges, a co-working space at the heart of the emerging London Bridge cleantech cluster.

cubed - Industry spotlight

“The last five years have seen a rising tide of startup companies using internet and mobile technology to disrupt institutional incumbents and allow consumers direct participation in the market.” Most people’s first reaction would be that this describes “fintech”, specifically crowdfunding – this is a crowdfunding blog after all. However, since I launched Sustainable Ventures with Chris Morris five years ago, this description can equally be applied to what used to be called “cleantech”, a term that’s become as dated as “dotcom”. I first encountered “cleantech” as a strategy consultant at Bain’s early stage technology incubation arm, Bainlab, back in 2000. What back then was a field predominantly focused on large scale energy generation technologies, i.e. wind turbines, has flourished into a multifaceted, dynamic driving force in our economy, with environmentally friendly innovations now appearing in every sector. Sustainable Ventures’ first startup was E-Car Club, which falls into the emerging Sustainable Transport theme, and in 2012 was the first of seven equity crowdfunding campaigns completed across our portfolio. We quickly realised that the online engagement directly with Crowd investors mirrored the way the transport sector was moving; soon the technology will be in place to allow individuals to seamlessly select the lowest cost, lowest carbon option for making a journey, in the same way that Amazon has changed the way we shop. Software companies (such as Autotrip, which recently raised £430k on Crowdcube) represent capital efficient approaches to enable that transition, far more than the conventional “cleantech” engineering-led business (e.g. in fuel cells and alternatively fuels).

cubed - Industry spotlight

Moving closer to home, the electricity supply system is also undergoing a transformation. The latest figures show the UK has installed around 1 million residential solar PV systems in the last six years. In the next six, the relentless downward pressure on component and finance costs will result in grid parity being reached across most of Europe. The result will see millions more PV systems, coupled with storage, being deployed throughout the next decade, signalling the demise of centralised institutionally-funded generation. This is a consumer-led upheaval, and successful crowdfunding campaigns (e.g. Powervault and Tempus) highlight where the Crowd think the future of the sector lies. Unlike many conventional cleantech investments, many of these opportunities have novel business models and strong marketing propositions. These are areas where the Crowd can invest on a level playing field with other sources of investment. Going forward, the pace of disruption is only likely to increase as more consumers, businesses and governments are swayed by the green economy’s inherent resource efficiency and underlying, long-term economic rationale. “cleantech” will cease to be a distinction, as resource efficient business becomes the norm. From an investment point of view this will see an on-going increase in corporate investments and acquisitions, which will open up a range of opportunities for entrepreneurs and Crowd investors. I first encountered “cleantech” as a strategy consultant at Bain’s early stage technology incubation arm, Bainlab, back in 2000. What back then was a field predominantly focused on large scale energy generation technologies, i.e. wind turbines, has flourished into a multifaceted, dynamic driving force in our economy, with environmentally friendly innovations now appearing in every sector.

cubed - Industry spotlight

Sustainable Ventures’ first startup was E-Car Club, which falls into the emerging Sustainable Transport theme, and in 2012 was the first of seven equity crowdfunding campaigns completed across our portfolio. We quickly realised that the online engagement directly with Crowd investors mirrored the way the transport sector was moving; soon the technology will be in place to allow individuals to seamlessly select the lowest cost, lowest carbon option for making a journey, in the same way that Amazon has changed the way we shop. Software companies (such as Autotrip, which recently raised £430k on Crowdcube) represent capital efficient approaches to enable that transition, far more than the conventional “cleantech” engineering-led business (e.g. in fuel cells and alternatively fuels). Moving closer to home, the electricity supply system is also undergoing a transformation. The latest figures show the UK has installed around 1 million residential solar PV systems in the last six years. In the next six, the relentless downward pressure on component and finance costs will result in grid parity being reached across most of Europe. The result will see millions more PV systems, coupled with storage, being deployed throughout the next decade, signalling the demise of centralised institutionally-funded generation. This is a consumer-led upheaval, and successful crowdfunding campaigns (e.g. Powervault and Tempus) highlight where the Crowd think the future of the sector lies. Unlike many conventional cleantech investments, many of these opportunities have novel business models and strong marketing propositions. These are areas where the Crowd can invest on a level playing field with other sources of investment. Going forward, the pace of disruption is only likely to increase as more consumers, businesses and governments are swayed by the green economy’s inherent resource efficiency and underlying, long-term economic rationale. “Cleantech” will cease to be a distinction, as resource efficient business becomes the norm. From an investment point of view this will see an on-going increase in corporate investments and acquisitions, which will open up a range of opportunities for entrepreneurs and Crowd investors.

cubed - Pavegen

Pavegen Timeline

cubed - Pavegen

2009 •

Pavegen was founded by Laurence Kemball-Cook. He manufactured the first prototype and launched Pavegen shortly after graduating from Loughborough University.

•

The first patent was filed at 4am, three hours before Laurence first publicly displayed Pavegen.

2010 •

The first installation was carried out. Pavegen completed its first project with Bestival, charging phones through festivalgoers’ dancing.

•

The seed funding was completed. Laurence had to rely on a strong network of family and friends to get the business running during the economic recession.

2011 •

Pavegen completed its test of one million footsteps on the tiles - no problems!

•

A manufacturing warehouse was established to help produce the technology at scale in Newhaven, East Sussex.

2012

•

West Ham installation – Pavegen completed a project at West Ham station, collecting footfall data through the duration of the London Olympics in partnership with TFL.

•

Pavegen opens its new HQ in Kings Cross, Central London.

cubed - Pavegen

2013 •

The largest installation in 2013 as Pavegen covered the final 25 metres of the Schneider Electric Paris Marathon track in its technology, powering lighting and interactive screens.

•

USA and Australia patents granted - hooray!

2014 •

Pavegen recruited the new Chief Technology Officer, Craig Webster, to help take the technology to the next scale of efficiency and low-cost largescale installations.

•

Pavegen’s largest and most successful installation to date took place in a favela in Rio de Janeiro, using 200 tiles to create the first people-powered football pitch for Shell’s #makethefuture project.

2015 •

Pavegen completed its first ever crowdfunding round, raising over £1.9million on Crowdcube and accumulating over 1,473 investors.

•

Pavegen established its digital events arm, Pavegen LIVE, to help power brand experiences through the technology.

2016 •

Pavegen introduced the V3 tile, changing the forefront of the digital flooring industry.

•

The future – with two large-scale permanent installations confirmed for late 2016, Pavegen is taking the world by storm!

cubed - Pod Point

Cleantech business POD Point leads the way Written by Erik Fairbairn, founder of POD Point.

cubed - Pod Point

POD Point is the UK’s leading provider of electric vehicle (EV) charging stations. Since forming in 2009, the company has manufactured and sold over 25,000 EV charging stations and developed one of the UK’s largest public networks. This connects EV drivers to hundreds of charging stations nationwide, including locations such as Sainsbury’s and Southern Rail. In November 2015, POD Point launched a Crowdcube campaign to raise £2.2m

to help the business to continue the roll-out of its nationwide ‘Open Charge’ network. Erik Fairbairn, founder and CEO of the company, tells us how the success of this campaign has impacted the growth of the business.

cubed - Pod Point POD Point is no stranger to crowdfunding. In 2014 we put ourselves firmly in the record books by raising £1.5m in what we believe was, at the time, the second largest private company equity fundraise the UK had ever seen. This funding has allowed us to develop and launch POD Point Open Charge and our @Work solution, which are made up of next generation hardware and intuitive software. Using Crowdcube to push this growth onwards was an easy decision really – what better way to engage with the public than through crowdfunding? We had a main equity investment target of £1.5 million, which would allow us to bolster our sales capability, develop our chargepoint hardware and continue to iterate our awesome software products. As it turned out, this was a popular move, and we ended up overfunding to the point of raising £2.2 million from just under 900 individual investors. Even benchmarking against the success of our 2014 crowdfunding, we were so pleased with the positive response to our Crowdcube offering, which shows how engaged the public is with our vision for the future of personal transport. These investors all receive a quarterly update on the progress of our plans, which are going ahead rapidly thanks to these fresh funds. We’ve been expanding our team, particularly by developing specialised sales teams and expanding our marketing capacity significantly. We’re also expanding our product development capability to build on the work we’ve already done to introduce a market-leading, smartphone-enabled charging point that doesn’t rely on proprietary RFID (Radio-Frequency Identification) cards. This development is at the core of our Open Charge network, and we’ve pushed on with the rollout of our public charging points across the UK. The POD Point Open Charge app is at the heart of the customer experience, and crowdfunding has allowed us to continue improving this experience with app updates and a roadmap of cool new features stretching months ahead. Since our last fund raise, we’ve also formed partnerships with some of the world’s biggest car brands, including Nissan and Volvo, to make the customer experience even more seamless. Home charging points can now be ordered at the same time as your electric car. All this work is contributing to our belief that electric cars will be the norm in the very near future, and the infrastructure behind this shift is key. We want to install a POD Point everywhere you park for an hour or more, and the funding we’ve received through Crowdcube has been vital in helping us carry on towards achieving this goal. Watch this space!

cubed - World’s first crowdfunding exit

Hear from the entrepreneurs behind the world’s first crowdfunding exit Watch a video featuring the founders of E-Car Club, which was the world’s first successful crowdfunding exit, to find out how the business has grown from its initial launch, to raising finance from Crowdcube’s savvy crowd, through to being acquired by Europcar, giving investors a multiple return on their investment.

https://vimeo.com/169228085

cubed - Worldâ&#x20AC;&#x2122;s first crowdfunding exit

funded club

The latest news and insights into our ever-growing network of businesses to fund on Crowdcube.

cubed - Lickalix

Lickalix

LICKALIX, a natural ice lolly company, raised £230,000 on the platform in December 2014 to fund its growth and international expansion. We caught up with the founders to see what their highlights have been since the company launched in September 2013. Take a look at the timeline and LICKALIX’s success story so far.

Raised:

£231,340 Investors:

209

cubed - Lickalix

September 2013 Karis and Dom, soon to be founders of LICKALIX, quit their corporate jobs to pursue their dreams of starting a business. December 2013 LICKALIX launched and raised seed investment from an angel investor network.

February 2014 LICKALIX gained its first stockist, The London Fields Lido, and bought Millie, a converted tuk tuk, to deliver lollies around London. June 2014 Purchased the official events vehicle, Kenny the Kombi, a vintage VW camper van for bigger festivals! August 2014 LICKALIX made an appearance on Jamie Oliverâ&#x20AC;&#x2122;s Food Tube. October 2014 The company raised over ÂŁ230,000 on Crowdcube from 209 investors. LICKALIX joined the Funded Club.

cubed - Lickalix

January 2015 The company hired additional members to its growing team. March 2015 Growing at a rapid pace, a new kitchen space was acquired to fulfill all orders, along with new packaging for the brand. August 2015 Reached the 200th stockist. LICKALIX retailers increased by 500% since January 2015. November 2015 Gained a Safe and Local Supplier Approval (SALSA) and Organic certification. This gave LICKALIX a unique advantage over other all-natural frozen treat products.

February 2016 Launched its new impulse flavours to expand the product range, including simply chocolate, strawberry lemonade and all natural cola flavours. April 2016 New multi-packs were launched on Ocado.com. The LICKALIX bespoke ice lollies were made exclusively available on the kids menu for Jamie Oliverâ&#x20AC;&#x2122;s Italian restaurants. May 2016 The Lolly Book is launched, containing 50 delicious lolly recipes.

cubed - Where are they now?

Escape the City, where are they now? Escape the City is a community of 250,000+ people who believe there is more to life than doing a job you don’t care about. We believe that a 21st Century Career is accessible to everyone – the perfect balance of money, passion, purpose, impact welfare and freedom. Escape the City is on a mission to help one million people do something different to improve their lifestyle.

Raised:

£600,000 Investors:

395

cubed - Where are they now?

It’s been four years since you raised £600,000 on Crowdcube, what’s happened at Escape the City since then? As soon as we successfully crowdfunded we rented an office in an old converted Victorian school, and started hiring a team to build our technical platform that would match our members up with new opportunities. We worked towards establishing relationships with progressive employers and word began to spread. We have been growing organically through referrals and recommendations ever since. We also wrote a best selling book, The Escape Manifesto, a practical guide to escaping the corporate world and ‘doing something different’. We’ve twice run a successful career-change festival called ‘Escape to the Woods’. Notably, we’ve succeeded in helping entrepreneurs launch businesses through unusual means. The ‘Escape to the Shed’ competition was a huge success for example. The premise was to allow anyone with a startup idea to live rent-free in Escape the City’s garden shed and launch their business in three months. Pippa Murray won the challenge and launched Pip & Nut. As well as raising £120,000 via Crowdcube she’s gone on to get her product stocked in 2,000+ stores nationwide. More recently we built a school in the heart of the financial district in London where we run events, workshops and deliver our Tribe programmes. This space is vital to help the community to connect, be inspired and stay accountable on their journey to a 21st Century Career. How would you describe the four years since funding compared to your projections and plans? I would always say that you can only really accurately plan between 3-12 months in advance. Anything beyond that contains too many uncertainties, and would actually hinder progress in the long term. In the four years since fundraising we have always surpassed our annual projections by remaining nimble, accountable to our vision, and by hiring an excellent team.

cubed - Where are they now?

cubed - Where are they now? What challenges have you faced, or are perhaps still facing? Escape the City is shaking up the world of work. There are very few businesses that operate as ours does, in the same space as us. Because of this, there is very little information about the best way to go about achieving our goals. So, like many startups, our biggest challenge has been finding successful products that scale both in terms of impact and revenue. We are not short on ideas, so an ever-present challenge is opening ourselves up to failure – swift failure. Failing fast is uncomfortable, but it also allows us to grow quickly and operate more efficiently. Shortening the cycle between coming up with an idea, designing a test to see if it will work, and executing on it means we stay flexible. However, it is a very unfamiliar place to operate from because you have to fight your instincts (to wait until you are ready, or share something only once it’s perfected). At Escape we launch early and often. Intertwined with this is keeping the team on track and motivated when the business requirements change every three months. You employed 3 people when you raised finance, has your team grown? Yes our team now consists of 14 full time employees, as well as a number of contractors and part time members. Our biggest hires early on were for technical roles. More recently we have brought on-board members with deep industry expertise who really believe in the vision and mission of the organisation. We have been very fortunate to attract amazing talent from all over the world, and each individual brings something unique and valuable to Escape. Could you give a brief overview of the company’s financial performance? When we crowdfunded our revenue was just over £100,000. In four years we have increased that to just over £1m in gross revenue. Escape is also officially a profitable business as of last year, with great ambitions and projects in the pipeline to help us continue that trend.

cubed - Where are they now?

What’s next for Escape the City? We believe in sharing our startup journey for transparency and others to learn from. That’s why we have published our investor report to our community. To see what we have been up to and what we have planned, go here. But in short we have a few objectives for this year: Scale our Tribes career accelerator programmes in London and around the world. We want to have buzzing communities in at least 10 locations across the globe by the end of the year. We are looking to work with local people passionate about this problem to help build out our global community. Grow our opportunities business by 20%. We’re looking to work with more interesting organisations and find new ways to connect them with our 250,000+ members. Longer term, our aim is to liberate 1 million people from unfulfilling work, and support them on their journey to becoming 21st Century Careerists.

cubed - Where are they now?

Why did you choose to raise finance from the crowd over more traditional routes to finance? In 2012 we turned down two prominent Venture Capital firms to be the first tech organisation in the world to raise £600,000 via equity crowdfunding. We wanted Escape the City to be true to its ethos and mission. Accepting funding from the very institutions that we chose to escape from did not sit right with us. We wanted to share our journey with those who believed in it, and we wanted to build a business and organisation on our terms, not the terms of institutional investors. Other than the financial backing, have there been any additional benefits of being backed by a crowd of investors? Having 394 flag bearers for our mission is brilliant. That’s 393 more people who can get involved and introduce us to new businesses and people needing our services than traditional funding options. Do you have any offers, promotions, events, product launches you’d like to tell our crowd about? We have just rebranded! And so are happily giving 20% off single listings on Escape’s hiring platform to all Crowdcube funded organisations. We’re also still accepting applications to our startup and career accelerators, and have a host of speaking events lined up at our Escape Inspires evening talks.

cubed - News bite

news bite:

Celixir Welsh business Celixir (previously Cell Therapy) has the granting of a Japan license for its innovative cardiac regeneration medicine, Heartcel™, to Daiichi Sankyo, a global pharmaceutical company and the second largest in Japan. This deal means Celixir will receive a £12.5 million upfront licensing fee, along with additional milestone payments and royalties. Daiichi Sankyo will undertake all development, regulatory and commercial activities for iMP cells in the territory of Japan only, while Celixir retains its worldwide rights outside of Japan, as well as global manufacturing responsibilities.

Raised:

£689,246 Investors:

297

cubed - News bite

news bite:

Nom Foods It’s just over one year since Nom Foods raised on Crowdcube. In that time the company has managed to scale up and has reported a 150% growth along with launching a new product; organic coconut oil popped popcorn. This new popcorn was immediately listed by Abel and Cole, Wholefoods, Malmaison, Hotel du Vin’s 2,082 mini bars, Le Pain Quotidian rolled it out into all 25 restaurants around the UK and distributed by wholesalers.

Raised:

£142,270 Investors:

135

cubed - News bite

news bite:

Cauli Rice Cauli Rice is stocked in 1,500 supermarkets across the UK including Waitrose, Tesco, ASDA, Morrisons, Wholefoods Market and Target in the US. The company has sold over ÂŁ1m worth of Cauli Rice products to date.

Raised:

ÂŁ2.01m* Investors:

1,165* *based on 3 raises on the platform

cubed - News bite

news bite:

sugru Sugru continues to drive its US expansion plan. Already available in Target and The Container Store, the mouldable glue can now be found in smaller hardware stores nationwide including Ace Hardware, True Value Hardware and Do It Best, as well as major hardware wholesalers Orgill. The brand continues to explore additional DIY and hardware stores with 50% of the companyâ&#x20AC;&#x2122;s revenue now coming from the US.

Raised:

ÂŁ3.39m Investors:

2,374

cubed - News bite

news bite:

Growing Underground Growing Underground, formally known as Zero Carbon Food, has raised twice on Crowdcube raising a combined total of ÂŁ820,000. Two years on from the first round, the company has set upon full scale construction for its farm and the products have entered the local London market. Its current produce is spoken for by wholesalers, local restaurants, and Funded Club member Farmdrop.

Raised:

ÂŁ243,190 Investors:

309

cubed - News bite

news bite:

Monzo London banking startup Mondo has rebranded and changed its name to Monzo. The company is also now officially a bank in the UK and is authorised and regulated by the Financial Conduct Authority and Prudential Regulation Authority.

Raised:

ÂŁ992,990 Investors:

100

1,877

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news bite:

Dirt Factory Dirt Factory received investment from 22 different countries and 36% of its investors are from the North of England (where the company is based). Now the business has secured start up funding, it is currently in the process of securing desired premises and will create jobs during the fit out phase as well as 20 jobs when its doors open.

Raised:

ÂŁ431,890 Investors:

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516

cubed - News bite

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news bite:

Haughton Honey The investment has been a catalyst for further growth. Haughton Honey is now available via almost 100 independent stores, delis, farm shops and garden centres and the company is now targeting some premium supermarkets, as well as growing its online sales. During 2016 the team expects to pack and sell over 12,000kg of English honey and anticipate processing more than double that amount during 2017.

Raised:

ÂŁ111,260 Investors:

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203

cubed - News bite

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cubed - ISO Spaces

Stockbrokers turned entrepreneurs turn to the crowd We welcomed ISO Spaces into the Funded Club after they successfully reached their maximum target. We caught up with Ben to hear more about the bespoke shipping container business, ISO Spaces and how they found their crowdfunding experience.

Raised:

ÂŁ448,690 Investors:

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cubed - ISO Spaces Written by Ben Treleaven – co-founder of ISO Spaces Gregg and I met when we both worked as stockbrokers back in 2010 and then started developing ISO Spaces in 2013. During this time we worked relentlessly, starting at 5am then going to our 9 – 5 job as financial advisers, then continuing to figure out how we were going to turn our idea into a national brand. It was a tough six months, but we then decided to give up our jobs and invest all our time into ISO Spaces, and with this came the development of our first prototype. We started toying with the idea of crowdfunding through Crowdcube a couple of years ago, but wanted to grow the business before pitching to the crowd for investment. With an order book filled up until April 2017, we felt it was the right time for us and the company to crowdfund. Crowdcube was without doubt our chosen platform due to the traction and success it’s had to date. A major factor was also the size of the crowd, with 300,000 members, we felt this gave ISO Spaces the best chance of success. Both Gregg and I had worked in a regulatory environment for over 10 years and had experience with the Financial Conduct Authority (the regulator for financial services), and still we weren’t prepared for the extremely stringent due diligence the team went through with our business. We had to verify over 200 claims, I had to find pay slips from the last few years and we even had to remove one of the director’s degrees (as we couldn’t find the certificate!).

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cubed - ISO Spaces After completing the pile of claims we finally launched our crowdfunding campaign with no investment lined up for the round – risky we know as we had no idea how the crowd would react to our business and product. After working closely with the legal and financial team at Crowdcube we launched with the offer of 10% equity in exchange for £300,000. Our campaign moved along steadily for the first three weeks until the turning point for us was when we announced that we confirmed a housing order and deposit for 34 affordable housing units. Two hours later we hit our funding target and a week after that we reached our maximum overfunding target of £450,000. Our phones have continued to ring with potential investors wanting in on the round after seeing the Crowdcube success – what a tremendous result! We’re now looking forward to the rest of the year and 2017 – just this week we employed an additional employee. Gregg and I would also like to take this opportunity to thank our 314 investors for backing our bespoke business.

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About ISO Spaces ISO Spaces convert recycled shipping containers into bespoke modular buildings, focusing on design, innovation and high quality finishes. The team have worked with a range of large blue chip clients and are continuing to look at new ways to push design boundaries with container conversions, creating pop-up bars, houses, restaurants and hotels.

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Since launch in 2014, the company has worked with a variety of clients including Jeep, Boxpark and Fever-Tree and have achieved sales of ÂŁ1.1m to date.

cubed - ISO Spaces

About Ben Treleaven, co-founder and managing director Previously a stockbroker, also worked for several years at GE Capital, implementing Six Sigma methodology across their home lending division. BSc (hons) in Business Studies from Brunel University and DipPFS from the Chartered Insurance Institute. About Gregg Curtis, co-founder and managing director Also previously a stockbroker, and entrepreneur. Gregg has run several of his own businesses, including restaurants and hotels.

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cubed - goHenry

goHenry’s record raise of £3.99m goHenry – a digital banking solution that aims to make kids smarter at managing money than their parents has raised £3.99 million on the world’s first and most successful investment crowdfunding platform Crowdcube, making it the largest Funded Club crowdfunded deal on the platform to date (excluding our raise). The previous biggest deal was JustPark, which raised £3.5 million in 2015. goHenry is the 38th raise out of 41 to fund more than £1million on the platform. Founded by a group of parents, goHenry has already built up a loyal following of families with over 200,000 members and more than 10k joining every month. goHenry’s pre-paid debit card and app was designed to help young people learn good money habits whilst giving parents peace of mind and an easy way to manage pocket money and allowances.

Raised:

£3.99m Investors:

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3,209

cubed - goHenry

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The funds raised from 2,371 investors sharing 15.98% equity in the business, which includes over 1,200 existing goHenry customers, will be used to develop goHenry’s product, continue its growth in the UK and to start overseas expansion in Europe. goHenry’s target market is the 25 million children in Europe and the UK that receive pocket money but face a digital and cashless future. goHenry helps this generation to navigate this future safely and supports parents in enabling good money habits in their children. goHenry is the latest in a wave of innovative fintech firms that are disrupting parts of the financial services sector and raising finance on Crowdcube. There is no doubt that crowdfunding is no longer alternative, with more established and growth-stage businesses turning to us to raise larger sums, often as part of Series B fundraises. We are leading a charge to convince the EU to raise its limit on the amount of finance that any business can raise without a prospectus. If the 5 million Euro limit was lifted, goHenry could have raised significantly more investment to help it expand into Europe, preparing millions of children for a cashless digital future.” Louise Hill, co-founder and COO of goHenry said: “We’re delighted to give the parents that love our product a chance to be a part of our future success too. We are a business that was built by parents so it’s only natural that it continues to be owned, managed and grown by parents as well. As our economies become increasingly cashless, and as purchasing moves online, children need to be able to manage their money in a digital age. The many parents who use goHenry feel it’s important that they have a tool that enables them to empower their children to learn good money habits early on – to earn responsibly, to develop good saving habits and to spend safely.”

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cubed - Vivobarefoot discount

Vivobarefoot is offering all Crowdcube members 15% discount online with the code: VIVOCUBE

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cubed - Vivobarefoot discount

Valid until 31 October 2016. Standard exclusions will apply: No clearance items, no kids shoes and cannot be used on the Vivobarefoot Australia website.

www.vivobarefoot.com

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cubed - Million club

Million club

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cubed - Key achievements

Key achievements “This year we’ve shown that ambitious laterstage British businesses can raise serious amounts of growth capital on Crowdcube. Our record-breaking raise, which is the 41st fundraise over £1 million in our history, is yet another watershed moment that will help us execute our plans to pioneer secondary liquidity for investors, whilst facilitating larger rounds to fund the growth of Britain’s ambitious businesses. As we embark on Crowdcube’s next stage of growth were excited for the future and pleased to have 3,503 new investors join us on the journey.”

Darren Westlake, CEO & co-founder of Crowdcube

Deal of the quarter: Cupris Raised £548,090 from 369 investors “Backed by the NHS and with clinical trials underway in the UK and Nepal, Cupris is a great example of the crowd’s fascination with innovative UK MedTech. Mobile Health is probably the most exciting area within telemedicine and medical diagnostics currently, and investors seem to have recognised this trend and the potential of the team. The ability to remotely assess and diagnose problems in the ear has huge implications throughout the world – whether in Central London or the depths of the Amazon. This, coupled with ongoing product development, should place Cupris in a strong position for the future.”

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Richard Eckley, Senior Equity Investment Analyst

cubed - Key achievements

Crowdcube £5m raised in 4 hours 3,504

£7.7m

Total raised

Investors

(incl. Balderton Capital)

Largest raise:

(excl. Crowdcube’s raise)

goHenry £3.99m

Total raised

2,209

Investors

Business which exceeded its original target:

Zing Zing £1.56m (446%) Total raised

702

Investors

Businesses still trading:

Total amount returned to investors:

94%

£5 million

Visit www.crowdcube.com/mobile or