UK startup E-Car Club completes exit with buyout by Europcar in one of the first crowdfunding exits in the world.
Crowdfunding got a huge boost yesterday with the announcement by Crowdcube that one of its funded businesses, E-Car Club, had completed a successful crowdfunding exit with its purchase by Europcar, Europe’s leading car rental and mobility company. In announcing the exit, Crowdcube called the purchase the 'world’s first successful crowdfunding exit’.
Even if this is not the first crowdfunding exit in the world, it is certainly Crowdcube's, making this successful exit an important milestone not only for the investment crowdfunding platform, but for the crowdfunding sector in general.
With this exit, the 63-members of the crowd that invested in E-Car Club will receive a multiple return on their investments, and the exit could be just the beginning; according to Crowdcube, these same investors all have an average of 12 investments each in various Crowdcube projects, meaning they didn't put all their eggs in one basket, but rather built a diversified portfolio of investments in start-up, early and growth stage businesses from a range of sectors.
E-Car Club's business model
E-Car Club's idea is a rather interesting one - combining pay-as-you-use cars, which is a far more affordable alternative to owning a car (especially in the city) - with socially-conscious electric cars.
E-Car Club was founded by Chris Morris and Andrew Wordsworth in 2011 as a startup, and was one of first companies to seek equity funding through Crowdcube.
Luke Lang, co-founder, Crowdcube with Andrew Wordsworth and Christopher Morris, co-founders, E-Car Club
The startup’s business model, combined with its environmental and social impact approach, appealed to Crowdcube’s investors, and in 2013, the company was able to raise £100,000 from those investors, who will now see a multiple return on that investment.
After successfully fundraising on Crowdcube, E-Car Club raised additional growth capital through a number of socially-minded investors, some of whom included the original crowd investors. The company was then able to obtain institutional investment through the UK’s Ignite Social Enterprise LLC (the UK’s first social impact fund that targets energy-related ventures, backed by Centrica Plc).
Diversified investments in like-minded startups
Many of the original investors in E-Car Club continue to pursue investments in other businesses that are seeking capital through Crowdcube, including Powervault, an electricity storage device designed to capture solar power, which was also launched by Andrew Wordsworth through his Sustainable Venture Development Partners (“Sustainable Ventures”).
Key facts about E-Car Club investors
- In 2013, 63 members invested in E-Car Club
- The largest investment amount was £15,000 while the average investment was £1,500
- 87.5% of the investors went on to invest in other businesses through Crowdcube
- Combined, the 63 investors have made a total of 762 diversified investments on Crowdcube - the average portfolio is 12 investments and the largest portfolio is 237 investments
So do you think? Is this the world's first crowdfunding exit and could it be the sign investors were looking for?
If you want to learn more, check out Crowdcube's infographic on the E-Car Club exit.