Crowdcube Launches Cubex: the European Marketplace for Shares in Private Companies
Launched in response to the growing demand from Crowdcube’s portfolio of companies and the trend of businesses staying private for longer, Cubex satisfies demand among existing shareholders to realise a return without the need to wait for an exit. At the same time, Cubex offers new investors the opportunity to invest in proven, high-growth, pre-IPO businesses that they’ve long admired but previously could not access.
Darren Westlake, CEO and Co-founder of Crowdcube says: “Gone are the days when a successful exit for businesses and investors meant only a blockbuster IPO or acquisition. As companies stay private for longer, and grow faster and become more valuable than ever before, this is a real boon for retail investors: a European marketplace to buy and sell equity in early-stage category-definers.”
Secondary sales are not new to Crowdcube, which has arranged one-off secondary transactions for multiple companies in its portfolio. Since 2017, Crowdcube has delivered over £16m in liquidity through secondary shares. Most notably, Revolut shareholders achieved 20x returns in 2018, and BrewDog investors made 1.8 times their investments in 2017. Secondary sales are proving increasingly popular as its portfolio matures and the profile of business raising capital on the marketplace continues to evolve.
The technology behind Cubex powered the recent secondary share sale for Freetrade, which saw shareholders celebrate returns up to 47x (4,670%). Six of the company’s shareholders became millionaires as the company’s valuation skyrocketed from £2m when it first raised on Crowdcube to £265m at their latest funding round earlier this year.
Cubex’s first transaction with Freetrade illustrates the transformative impact of a secondary marketplace on private company investing: early investors who decide to sell shares are seeing a 47x return on their investment, while new investors are able to pick up shares in one of Europe’s most exciting startups.
Adam Dodds, CEO and Founder of Freetrade says: “Our investors through Crowdcube are our biggest shareholders, and they have been some of our most loyal supporters since day one. It was important that we offered these investors the opportunity – if they wished – to crystallise some of the returns that they have realised on their initial investment.”
Westlake continues: “As the age, size and profile of companies that raise capital via Crowdcube become older, larger and higher, Cubex will play a truly essential role in the way our investors and companies interact and benefit from one another’s presence on our platform. Cubex allows companies to rejuvenate their shareholder registers with new blood; it rewards early supporters for their loyal backing, and it gives investors the chance to get behind Europe’s most ambitious businesses whose doors would otherwise be closed to them.”
The Cubex marketplace allows investors to express interest in buying shares in a high growth business such as Grind and Carwow while matching their demand with people wanting to sell shares. Shareholders can provide details about equity they want to sell. If buy and sell side demands are met, Crowdcube will offer managed, company approved secondary events.
This next step in Crowdcube’s growth strategy follows a period of constant profitability and growth. Europe’s leading marketplace is expected to be profitable again in the first half of 2021 and has an unprecedented number of high profile European businesses set to fundraise with it in the coming weeks, including the global mobile app Citymapper.