Woodford Patient Capital Trust, which is run by star fund manager Neil Woodford, has bought a stake in equity crowdfunding platform, Seedrs.
The trust has made a £7.5 million (€10.6 million) investment along with Augmentum Capital.
The investments value Seedrs at £30 million and a further £2.5 million will be offered to existing shareholders and the “crowd” through a campaign on the Seedrs platform.
Seedrs will use the capital to expand its marketing efforts in the UK and Europe, and to increase platform development activities and launch its business in the United States
The Woodford trust is an £800 million vehicle launched earlier this year by Woodford Investment Management and managed by Woodford. It invests mainly in early-stage and early-growth companies but also has exposure to some blue-chip companies.
Augmentum Capital is a venture capital firm founded in 2009. Its Augmentum I LP, which is making the investment in Seedrs, is wholly backed by RIT Capital Partners, a FTSE investment trust chaired by Lord Rothschild.
Details of the crowdfunding campaign will be announced shortly.
Tim Levene, managing partner at Augmentum Capital, says: “We have been following the developments in equity crowdfunding for some time and believe Seedrs are the stand-out company. The market is still early in its development with many challenges to overcome.”
Augmentum Capital has made a number of investments in alternative finance businesses such as Zopa, Interactive Investor, Borro and BullionVault.
Jeff Lynn, chief executive and co-founder of Seedrs, says: “The greatest fund manager of our time and the greatest financial family in history have looked at the equity crowdfunding space, decided that there is a huge opportunity to be won, and decided that Seedrs is the one that's going to win it. We are honoured to have both investors on board...”
In a recent interview with Funds Europe, Nitzan Olsha, partner at global advisory and administration firm Maitland Group, also spoke of his conviction that there would be considerable growth in the number of crowdfunding funds available in the near future.
Seedrs is the largest crowdfunding platform in Europe, according to the firm. It has funded over 220 deals to date and has grown 15% month-on-month.
The fundraising round remains subject to Financial Conduct Authority approval.
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