20th January 2021
Despite the unprecedented circumstances that were presented to us during 2020, like all dynamic and agile businesses, Crowd2Fund has actually had one of the most productive years delivering on a number of mission-critical projects allowing us to prepare to scale the business in 2021 and beyond. We will be delivering on our ‘finance for all’ mission over the next few years via the proven and, now more resilient, Crowd2Fund platform.
A downturn within the economy was always going to be the ultimate test for the new FinTech sector, the significance of the economic impact of COVID-19 has been a true test for Crowd2Fund and the entire sector. In short, the resilience of small businesses listed on the platform has exceeded our expectations so far during the crisis, along with other key operational elements of the business proving to be robust.
Throughout the year we have delivered a fundamental overhaul of all credit, compliance, and operational processes, thus preparing the platform to dramatically scale during 2021, in line with our Reboot Britain plan. We have also delivered a redesign of the site, and plan to do a comprehensive user experience audit early next year, which will see a significant improvement to your investing experience. Our new credit policy and operational processes have been cautiously tested in the 4th quarter of the year, seeing the first few deals completed successfully since March.
The final project of the year has been a fundamental enhancement of the Exchange - or secondary market - which we plan to relaunch early next year. The new Exchange will continue to improve on the feature allowing investors the ability to sell their investments and choose the price. They will also receive real-time updates on businesses, giving more up to date information to allow investors to make informed investment decisions and set accurate sale prices for buyers. Enhancements crucially focus on protecting investors from losses caused via the Exchange, accuracy of listing price, and loan status transparency.
We’re thrilled to have started listing new opportunities for you to invest in the 4th quarter this year with two exceptional entrepreneurs, Andrew Swann of My Amazing Team, and Emma Waddington of Yorkshire Lavender. These two flagship campaigns were fully funded quickly by investors, demonstrating a significant demand for projects on the investor side; something we’ve not seen in a long time. The two recent businesses we have listed also demonstrate the type of innovative and growing opportunities we aim to list going forward.
We’re incredibly excited about fully launching the new credit policy next year with other amazing entrepreneurs and their businesses. We hope you got the opportunity to invest in these high-quality opportunities, if not – don’t worry there will be plenty to invest in coming early next year.
We have noted that some investors have been disappointed with a lack of opportunities this year, but we genuinely hope that these investors understand the reasons why. A more stringent credit policy coupled with £ billions of government stimulus going into the SME market has caused a constraint on quality deal flow. We decided not to offer the government stimulus via the platform because of a jarring with our proposition, which is tailored exclusively for private investors, rather than institutional funds who are currently deploying the emergency loans. We are focused on preparing the platform to scale when the emergency government stimulus ends early next year.
This is when we can expect a reset of the small business investment market to pre-COVID-19 conditions and we expect a significant increase in demand for investment that is not government-backed. We believe our clients access additional benefits by borrowing directly from people, rather than institutions. The platform offers many advantages, not available from institutional capital such as rewards, and a private investor network who can support their business over the longer term, which allows us to compete with more established, incumbent lenders.
We are overwhelmed with the positive response we’ve had in regard to our Reboot Britain campaign. Without even launching the campaign publicly, the Crowd2Fund investor community have pledged up to £3m, almost a third of the funding sought to deliver the plan. Early January will see the public launch of the campaign and the investment opportunity will remain open until the £10m target is achieved. The funds raised so far will allow us to kick-off the Reboot Britain plan in line with the schedule defined.
We are very confident we will exceed the £10m target and as part of our scale-up plan, we plan to exceed the 3,765 businesses funded per year with our approach. The amazing thing about Reboot Britain, is that it creates a scaled-up fully independent, user-owned, private capital investment platform for entrepreneurs – an important differentiator often overlooked. Scaling up over the next few years will improve the investment landscape which is currently dominated by institutional capital. When mobilised on mass, Crowd2Fund has the potential to release £ billions of growth capital for entrepreneurs and decent returns for private investors, without the need for a middleman.
With a secured budget, we are incredibly excited about the plans that will enable us to deliver finance for all, across the 54 Commonwealth markets which have a combined population of 2.4bn – a huge marketplace. There will be a comprehensive redevelopment of our front-end user experience, which will see an improvement on existing functionality, but also the internationalisation and introduction of payments, allowing you to treat your Crowd2Fund account almost like any other bank account.
We have already started to develop a new technology stack in parallel to the ongoing operational management of the existing platform. This will allow us to deliver enhanced functionality, the increased volume of transactions sought, but also, critically, the performance needed to deliver an amazing international investing experience, at scale. Starting with our existing core team, we will build a team of the best engineers, digital marketers, finance, and compliance professionals in the UK to deliver this.
From January, advertising will be ramped up slowly, also adhering to our new compliance procedures and we expect additional traffic to be reflected in a higher volume of transactions by February. In March we will kick-off the 2021 IFISA season, which we are greatly looking forward to, given the new market landscape.
Thank you for all the support and patience, both entrepreneurs and investors within our community. We are incredibly excited about emerging from the crisis early next year stronger than ever.
Wishing you and your family a very happy Christmas and a healthy, prosperous 2021.
Past performance and forecasts are not reliable indicators of future results. Your capital invested is not covered for compensation in the event of a loss by the FSCS. Tax treatment will depend on the individual circumstances and may be subject to change. Please see our Risk section before making an investment decision.