SyndicateRoom in the Cambridge technology cluster has become the first crowdfunding platform to join the public markets.
It has been granted intermediary status by the London Stock Exchange, allowing crowdfunding investors to participate in IPOs and placings on the UK’s main market and AIM.
CEO Goncalo de Vasconcelos has hailed the coup as “a complete game-changer to the crowdfunding industry and to the City. The City of London is now headquartered right here in Cambridge.”
The step change came with the company’s approved intermediary status for the £200 million IPO of HealthCare Royalty Trust Plc.
SyndicateRoom is the only alternative finance company to provide its members with direct access to public and private equity markets – helping their investor base diversify their exposure to different asset classes through one platform.
A broad spectrum of equity opportunities will be available to SyndicateRoom members – from early-stage crowdfunding rounds through to high-growth IPOs, pre-IPOs and discounted placings encouraging greater investor loyalty. SyndicateRoom members will now be able to participate across the entire funding journey of growth businesses.
SyndicateRoom has been recognised by AltFi as among the best platforms for managing risk and safeguarding investors. SyndicateRoom has undertaken over 70 capital raises through the platform since it was founded in 2013.
The launch of SyndicateRoom’s public equity capability means individual investors will be placed in the same position as professionals, with the ability to participate in the IPO market and the opportunity to benefit from the same discounts for new equity issues.
Discounted placings are typically only offered to institutional investors. Over the past two years, over £16.5 billion was raised on the London Stock Exchange via placings and IPOs, with an average 10 per cent discount given.
That means £1.65bn of value has been given to the traditional City of London investment community. SyndicateRoom seeks to spread this benefit to a far wider range of investors and believes there is strong appetite for investment among individuals considered too small to be embraced by the advisor community.
Twelve million individuals in the UK population are estimated to hold individual company shares but over three-quarters of those did not buy into public equity in the last year – so SyndicateRoom will be providing the London exchange with an important and a valuable new source of retail investor demand.
SyndicateRoom has a strong track record in healthcare investments: In August 2014, Oval Medical Technologies successfully raised £1,118,647 through the SyndicateRoom platform, to manufacture a pilot tool for its drug-device combination study.
In December 2014, Lightpoint Medical raised £989,998 through SyndicateRoom to bring its two lead imaging products to the EU and US markets.
Fertility Focus’s first funding round in May 2014 raised £880,500 through SyndicateRoom to invest in marketing for its fertility monitor; and in June 2014, Time for Medicine realised £330k to further expand its offering, using cloud technology to bring specialist medical diagnoses to patients in primary care or at home.
Last November, Check4Cancer garnered £550,543 through SyndicateRoom to drive top line growth through brand building and customer acquisition and Axol Bioscience, the human cell culture pioneer based in Cambridge bust the £1m barrier in a recent SyndicateRoom fundraising. de Vasconcelos said: “SyndicateRoom has already built a large member base of online crowdfunding investors, helping to create a new equity-owning class – the mass affluent.
“We are now seeking to democratise access to the public market, widening the reach of IPO discounts and putting the public back into IPO. “SyndicateRoom’s move into the public equity market is another step in the evolution of the London Stock Exchange providing capital to growth companies, now with greater participation from individual investors.”
David Brown, stockmarket investor and SyndicateRoom member, said the development was a huge development. “I've been investing for more than 25 years on the stock exchange and 15 years as a business angel and am incredibly excited about the prospect of having access to IPOs and private placings on a level playing field with institutional investors. It's fantastic to see SyndicateRoom leading the way, once again.”
And serial entrepreneur Jonathan Milner, co-founder and deputy chairman of Abcam plc added: “I wish this model had existed back when I listed Abcam. SyndicateRoom will enable a much larger base of retail shareholders for companies, which in turn will increase liquidity and stability. I believe this is a very positive shift for the industry.”
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