News in brief: crowdfunding; technology; peer-to-peer lending

News in brief
News in brief

Investments on Seedrs platform passes £100m milestone

More than £100m has been invested on the equity crowdfunding platform Seedrs since its launch in July 2012.

A new report released by research firm Beauhurst shows that equity crowdfunding continues to dominate early-stage investment, with Seedrs taking pole position in the space. Seedrs is ranked number one in various categories of investment, including being the top seed-stage equity investor in the UK and the top equity investor in London, and it has established “a strong lead” in investment activity for businesses in the Technology and the Business and Professional Services sectors.

Seedrs CEO and co-founder Jeff Lynn said: “Our mission is to build a sustainable industry with a business approach focused on a combination of scale and professionalism. We create a world-class experience for investors and entrepreneurs and build long-term relationships along the way.”

iOS business management app

A new real-time business management app for iPad, iPhone and Apple Watch has been created for small businesses.

The new iteration of Sage Live for iOS is to be the first in a series of solutions that Apple and Sage are working on together for SMEs. Sage Live will be sold through Apple’s ecosystem and Sage will work with Apple to help educate SMEs on the benefits of mobile technology.

Sage EVP global strategic partnerships and alliances Alan Laing said: “Mobile and cloud technology is revolutionising the way small and medium businesses work, giving real-time decision making for the first time ever, reducing costs and democratising access to business management tools. iOS is the leading mobile platform for business users and we are deepening our commitment to iOS by delivering our new Sage Live solution for iOS that provides simple, insightful accounting and payment services to Small & Medium Sized businesses.”

Concerns over peer-to-peer lending losses

Over the next five to 10 years losses will emerge from the peer-to-peer lending market that will make the bankers look “like lending geniuses”, former City regulator Lord Adair Turner has claimed.

Speaking on the BBC’s Today programme, Turner said: “You cannot lend money to small and medium sized enterprises without someone doing good credit underwriting."

Commenting on this warning, Haslers corporate finance partner Michael Watts said: “One of the problems with peer-to-peer is how the investors lend funds. There will be some that don’t have a balanced portfolio and are poorly educated as to how to invest, so are much more likely to experience large gains or large losses.

“There have already been a couple of high profile failures, such as Rebus, which was funded through Crowdcube, equally there have been some great successes, but it is all about having a good spread.”

However, according to Whittingham Riddell tax partner Duncan Montgomery, the peer-to-peer market is in fact very small at present, with more being done on a direct basis through family or linked businesses.

Intelligent online marketplace matches SMEs to lenders

An online marketplace that uses behavioural analytics to intelligently match lenders with SMEs seeking finance has been launched where small businesses can compare and select finance products from traditional, independent and alternative lenders.

The majority of SMEs still fail to take advantage of the wide variety of funding choices available to them because it is too time consuming to research and apply to multiple providers. The new platform, Capitalise, features more than 50 lenders enabling small businesses to search, rank, select and manage finance options via a single automated application at Capitalise.com.

Capitalise MD and cofounder Paul Surtees says: “The rise in alternative lenders is beginning to ease the significant constriction in small business lending but there is a lot more to do. Many SMEs only contact the largest banks when seeking finance with the vast majority only approaching a single lender. Capitalise creates greater opportunities for independent, alternative and traditional lenders to reach small businesses with lending solutions that will fuel growth and ultimately, economic benefit.”

Short-term data centre contracts for start-ups

Central London data centre City Lifeline has agreed a short-term partnership with tech start-up SPARKL, taking into account the differing needs of start-ups compared to established players. With research showing half of UK businesses fail within their first five years, founders are naturally wary of long-term fixed commitments.

Stereotypically, data centre contracts are annual, which tie up start-ups for a full year. City Lifeline has taken the needs of smaller businesses into account to offer a more appealing contract which provides greater flexibility during the initial growth stage of the business.

Jacoby Thwaites, founder of SPARKL, believes this type of short-term contract helps support start-up growth without forcing them into a lengthy agreement.

He says, “We have entered into a project with a major player in the networking industry and required secure, fully scalable hosting. However, as with many tech start-ups, we’re not blessed with never ending wallets so cost is always at the forefront of our minds.”