The securing of the growth capital fundraising for Bubble & Balm is the first time a British business has raised finance using the equity-based crowdfunding model, which was launched by Crowdcube in March this year.
Warwickshire-based Bubble & Balm sought £75,000 through Crowdcube’s web-based crowdfunding platform in return for 15 per cent equity in the business. A total of 82 investors committed between £10 and £7,500 each to meet the funding target.
The funding will enable the business to expand its product range, which promised to provide Fairtrade products, ramp up marketing and meet increasing demand from retailers such as Waitrose, Oxfam, Planet Organic and other independents.
Bubble & Balm founder Sue Acton, a former City banker, comments, ‘I am absolutely delighted we have achieved our target. Raising finance is incredibly tough for any small business, Bubble & Balm included, and I was really excited when I first heard about Crowdcube.
‘The idea of pitching our business to a wide range of people, ranging from armchair dragons looking to invest £10 through to more traditional investors with thousands to invest, was really appealing. As well as increasing our chances of raising the funds, I also liked the fact that the Crowdcube model fits really well with what Bubble & Balm is all about – working directly and fairly with communities and all our partners to achieve a shared success.’
Crowdcube claims to have taken the notion of crowdfunding ‘a step further’. Rather than backing social or arts projects – the main goal of similar sites such as Kickstarter in the US – Crowdcube offers ‘ordinary people’ a shareholding in high-growth businesses.
Business partners Luke Lang and Darren Westlake came up with the idea while watching the BBC TV show Dragons’ Den, and launched the website from their Exeter base earlier this year with six businesses, each of which had submitted a video pitch, images and supporting documents. The general public can invest from £10 to £5,000 in the companies, while sophisticated investors or people of high-net worth are able to invest more.
Westlake, Crowdcube’s managing director, comments that he hopes the platform will become a mainstay of the British investment industry, declaring that the first close is ‘just the start’.
He explains, ‘This is a significant moment in the history of small business finance in Britain. In the current climate with banks being risk averse, we are thrilled that Bubble & Balm has succeeded in getting vital growth investment.
‘Many entrepreneurs on Crowdcube are on the verge of achieving their funding targets using our crowdfunding model. I firmly believe that Crowdcube is the future of business finance in Britain.’