As new EU regulations come into effect, UK-based Crowdcube is aiming to become the first crowdfunding platform that would gain both pan-European and UK regulatory approvals. In so much, if they get there first, Crowdcube would be uniquely positioned to help more European companies raise funds from a collaborative investor base.
After a transition period of 12 months, the new EU regulations went into effect at the stroke of midnight this morning, and unify and homogenise the previously existing myriad of crowdfunding rules and regulations. With one set of rules to play by, and understand, companies in the UK and the EU will now be able to raise up to €13 million from retail investors in a single offering of either primary or secondary shares; €8 million from UK investors and €5 million from continental European investors.
To put just how big a deal this is into perspective, since 2018, privately-owned EU businesses without a prospectus were limited to raising only €1 million. The figure is now raised to €5 million. Additionally, the new regulations establish a unified legal framework for the day-to-day operations for all crowdfunding platforms.
“If you are a consumer-facing company in Europe the rationale for involving your customers as shareholders via equity crowdfunding is incredibly strong,” commented Index Ventures’ Martin Mignot. “These new regulations make that possible for the first time at scale which is great news.”
Since breaking ground in 2011, Crowdcube has seen over 1,130 deals pass through its doors, raising a total of approximately £1.2 billion. Previous Crowdcube funded startups include carwow, JustPark, eCar Club (acquired by Europcar), Feedr (acquired by Compass Group), Mindful Chef (acquired by Nestle), Monzo, Parcel2Go, Pod Point (acquired by EDF), Revolut, and Nutmeg (acquired by JP Morgan).
“This change in regulation in the EU has been a long time coming. We are delighted that this form of fundraising is now more readily available to founders and companies across Europe,” said Crowdcube CEO Darren Westlake. “We have a decade of knowledge and expertise in the UK, which we can now leverage fully in a much larger market, and are well-positioned to capitalise on the new regulations and help businesses engage with their customers and communities in Europe for the very first time.”