Crowdfunding to IPO - How many have made it?
Crowdfunding to IPO – How many have made it?
There have been 56 exits for companies that have used crowdfunding in the UK. 5 of these have been via an IPO. How does this compare to start-ups in general? Read on!
The Stats
First up: the headline stats. I’ve put these together with help from CCAF publications and Equity Crowd Expert both of which provide hugely valuable data on the crowdfunding industry. Beyond this, I’ve also used Crunchbase and of course the platforms (Crowdcube and Seedrs).
2396 companies have successfully used crowdfunding in the UK
56 have exited
5 have used an IPO to exit
These 5 are FreeAgent, Big Sofa, Augmentum FinTech, BidStack, and NEO Finance. See details of their IPO and crowd raise in the table below:
How does this compare to IPO rates in the UK in general?
This data was hard to find so bear with me as I take you through how I calculated this. A disclaimer that there are several key assumptions that make this very much an estimation:
Assumption: The time to IPO is the same as the average time to IPO 6.3 years (Statistica)
Assumption: All companies that registered in the UK IPO’d in the UK
Below I’ve listed the number of new UK businesses over 5 years starting in 2010 and the number of UK IPOs 6 years later from 2016. The Number of IPOs and the Number of New UK Businesses are from The Department for Business, Energy and Industrial Strategy.
The Final Numbers
The average rate to IPO for new businesses in the UK, across 5 years, is 0.024%
The average rate to IPO for crowdfunded businesses in the UK, since 2009, is 0.217%
A big caveat to these figures is that companies that make it onto crowdfunding platforms are rarely brand new (although some are!) and, as shown above, these figures are based on some big assumptions regarding the time to IPO. However, this does suggest that running a successful crowdfunding campaign increases your chance of exiting via an IPO in the future.
Do you have further data or comments around this? I’d love to hear from you!