The London Stock Exchange and Europe’s largest private market investment platform, Crowdcube, have formed a strategic partnership to create a more inclusive and liquid private capital market ecosystem.
This partnership opens up a new pathway for investors among Crowdcube's two million members to invest in later-stage, high-growth, private companies on the same terms as large institutional investors. The partnership also creates a chance for companies that understand the value of turning their customers, users and stakeholders into shareholders to do so while creating fresh liquidity.
The London Stock Exchange was confirmed in August as the first operator approved by the FCA to run a PISCES* market. This approval means that when launched, its new Private Securities Market will, for the first time, allow private companies to use the Exchange’s public markets infrastructure to access liquidity while remaining private. The market will offer eligible investors easier and more direct access to high-growth private businesses.
A key principle behind PISCES has been to widen investor access to exciting private companies. With this principle of financial inclusion in mind, the London Stock Exchange and Crowdcube have partnered to open late-stage private-market secondaries on the Private Securities Market to eligible** Crowdcube investors - on the same terms as institutions Private companies utilising the Private Securities Market will now have access to Crowdcube’s significant investor base.
Julia Hoggett, CEO, London Stock Exchange plc, said: “This partnership is a unique opportunity to enable private companies and investors to utilise the same infrastructure and technology that underpins the London Stock Exchange’s public markets, while leveraging Crowdcube’s experience as a leading private markets investment platform in the UK. We are delighted to be working together with Crowdcube as we advance our shared vision for a connected and inclusive funding continuum.”
Matt Cooper, Co-CEO of Crowdcube: “As many of Europe’s leading late-stage companies remain private for longer - by choice or necessity - they need the right infrastructure to keep them investing and innovating in the UK. The London Stock Exchange’s Private Securities Market is an innovation that strives to provide precisely this support – while acting in a wholly inclusive way that ensures that not only institutional investors get a piece of the action, but a much broader base of investors are supported and encouraged to do so too. The Private Securities Market is a genuinely innovative initiative that bridges public and private markets more holistically than anything we’ve seen in Europe or the US.
“Our objectives in partnership with the London Stock Exchange are clear: to make the UK the most attractive place for private companies to scale, as well as attract and retain the best talent; and to give as many investors as possible the chance to share in the value those companies create. By using the same world-class technology infrastructure that underpins the Exchange’s public markets, this is a hugely exciting reality about to happen.”
How the partnership works
Crowdcube has become a Registered Auction Agent (RAA)*** for the Private Securities Market. This means it can act as a conduit for hundreds of thousands of its eligible investors, sophisticated investors, and employees of the investee companies - providing them with access to ownership in businesses that previously would not have been available until after an IPO.
Using the London Stock Exchange’s Private Securities Market to manage regular liquidity events while still remaining private is a progressive way to attract and retain talent, rewarding employees and early shareholders as the business continues to scale. Through this partnership, companies will be able to use Crowdcube’s technology to manage liquidity events for hundreds of employees in share option schemes as well as providing the opportunity for loyal customers and users of their product to become shareholders before they go public.
