Investments via crowdfunding site Seedrs outperform other asset classes

In a portfolio update, the crowdfunding platform Seedrs has analysed the characteristics and performance of the 253 deals funded between its launch in July 2012 and the end of 2015. This shows Seedrs investments have, on a fair value basis, outperformed most other asset classes, according to the company.

Roughly 40 per cent of Seedrs’s deals have been for digital businesses and 20 per cent for non-digital. The remaining 40 percent have been for companies with hybrid digital/non-digital models.

Nearly 60 percent of deals have been for business to consumer businesses, with 30 percent for business to business, and the remaining 10 per cent for businesses with both B2C and B2B models.

Of 15 sectors, the three most popular in terms of number of funded deals have been food & beverage (11 per cent of deals), finance & payments (11 per cent) and travel, leisure & sport (10 per cent).

The platform-wide internal rate of return (IRR), that is, the annualised performance of all 253 deals in terms of share price appreciation (net of fees), as of 31 July 2016 was 14.44 per cent on a non-tax-adjusted basis.

When the impacts of tax reliefs and liabilities are taken into account, this goes up to 41.87 per cent.

Investors who have built portfolios of 20 or more investments have, on average, outperformed the overall market. They have achieved an average 15.01 per cent nontax- adjusted IRR (tax-adjusted: 43.39 per cent).

Businesses with hybrid digital/non-digital elements to their models have performed better than pure digital and pure non-digital businesses on average, achieving a non-tax-adjusted IRR of 16.88 per cent (tax-adjusted: 42.78 per cent).

Businesses with both B2B and B2C models have outperformed pure B2B and B2C businesses on average, with an 18.27 per cent non-tax-adjusted IRR (tax-adjusted: 41.74 per cent).

The three best performing sectors to date have been food & beverage, with a 22.77 per cent non-tax-adjusted IRR (tax-adjusted: 49.73 per cent); home & personal, with a 17.79 per cent non-tax-adjusted IRR (tax-adjusted: 57.76 per cent); and finance & payments, with a 16.91 per cent non-tax-adjusted IRR (tax-adjusted: 43.20 per cent).

Seedrs investor Robin Vaudrey, Head of CEE Region at the European Investment Fund (EIF) in Luxembourg, said, “My work at the EIF, the largest investor into European venture capital, has brought me close to the cutting edge of European technology and innovation, but until I came across Seedrs the opportunity to personally invest in such exciting new ventures did not exist given the traditional barriers to investing in private companies.”

Companies funded through the platform  have found it a positive experience, with Gray Stern, Co-Founder of Seedrs alumnus Landbay, a mortgage lender, saying, “Seedrs has enabled us to raise funds quickly and efficiently in line with our growth trajectory, at the same time giving us exposure to a new and valuable network of customers vested in our success.”

Seedrs has now funded more than 380 deals since launch in July 2012, with more than £150 million invested on the platform to date. According to Beauhurst, a leading third-party source of objective deep data on UK start-ups and scale ups, Seedrs is the UK’s most active investor in private companies.