- © POOL/AFP Andrew Couldridge
- Crowdfunding platform Seedrs’ first full accounts show losses up 140% to £3.8 million as revenues rise 30% to £1 million; CEO says losses down to planned two-year investment programme, intended to pay off in 2017; “We are now on track to nearly doubling revenue in 2017 without a significant up-tick in overheads,” CEO says.
LONDON – Crowdfunding platform Seedrs lost £3.8 million on revenues of £1 million last year, new accounts show.
Seedrs’ first set of full accounts filed with Companies House show that losses grew much faster than revenues in 2016.
Revenue grew by 30% to £1 million in the year to December 2016 but losses rose by 140% to £3.8 million.
CEO Jeff Kelisky, who joined the business in January of this year, said the performance was down to investment for growth and said 2016 “actually exceeded our expectations.”
“Seedrs made a number of specific investments into the business during 2016, recognising early that product innovation and scalability were two of the most fundamental prerequisites to long-term success,” Kelisky told Business Insider in a statement.
“These are part of a two-year investment program that were not intended to bear fruit in 2016, and indeed would only start delivering benefits in late 2017.”
The company recently launched a new secondary market feature it developed in-house that allows investors to trade shares in private companies they have invested in, one example of the company’s investment.
“We are now on track to nearly doubling revenue in 2017 without a significant uptick in overheads,” Kelisky, who replaced Seedrs cofounder Jeff Lynn as CEO in August, said.
Seedrs, which is backed by tennis player Andy Murray and star City stock-picker Neil Woodford among others, helps startups raise money through crowdfunding over its platform. The company earns its money through fees charged to companies raising money and certain “carry” fees if the business that raises money does well.
Once the cost of referral fees is stripped out, Seedrs made less revenue from commission and realised carry than in the prior year – £1.3 million in 2016 compared to £1.5 million in 2015. Administrative expenses doubled to £5.2 million as the number of staff rose from 36 to 57.
The company says in its accounts that it is in its “growth phase” and considers its results to be in-line with expectations. Management says they will work on “efficiencies in [Seedrs] cost base” in 2017, as well as revenue growth.
Seedrs raised £4 million earlier this month and has announced plans to raise more cash through a crowdfunding campaign on its own platform.
Kelisky said: “Our focus on quality and scalability is one of the reasons that led Neil Woodford to invest £4 million this September and other existing investors to invest over £6 million into Seedrs campaign on the platform this week alone.”
Founded in 2012, notable companies to have used the platform include accounting software company FreeAgent and startup banking app Revolut.