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August 2, 2013

Funding platform Crowdcube breaks £10m mark

The equity crowdfunding platform is challenging cautious bank lenders.

By Joe Curtis

Crowdcube has become the first equity crowdfunding platform to break the £10m fundraising mark.

The company, launched in February 2011, has helped fund 59 businesses, with an average investment of £2,700, and has seen more startups turning to it for cash as banks become ever more cautious.

In the first half of 2013 total investment in British businesses through Crowdcube’s website grew by 579% compared to the first six months of 2012, and the average number of successfully funded deals doubled.

Yesterday mobile virtual network operator OVIVO became the 59th successfully funded business on the website, pushing the total money raised via Crowdcube to £10,162,060.

The London-based startup, which uses Vodafone’s network to provide competitive mobile packages, attracted a total of 110 investors and raised £418,080.

Luke Lang, Crowdcube co-founder, said: "We’re pleased to have raised this much money so early in our own growth phase.

"Today’s banking system is outdated. It doesn’t give early stage small businesses and startups access to the funding they need to grow and drive the desperately needed economic recovery.

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"Even when the banks do offer to lend, the interest rates and other terms and conditions are often crippling. It’s no wonder more businesses are finding funds through alternative finance sources such as Crowdcube."

The crowdfunding company’s largest amount raised for a firm was £1.5m, and the average number of employees at successfully funded organisations grew from 424 before the cash influx to 1,172 three years after funding.

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