If you’re an insurtech looking for funding, then it helps to know which investors are keen to take a risk on something new and innovative. Crowdcube say that out of 16 active UK unicorns, they have helped fuel the growth of 3, which is 14% of the herd. There are 16 active private unicorns in the UK, with five others already having exited.
Here’s some info we found on the Crowdcube website – maybe they could back your expansion plans?
So who exactly are our unicorns? And how did they supercharge their growth?
BrewDog
Since 2006, the team at BrewDog have been on a mission to make other people as passionate about great craft beer as they are. As they put it, “Every beer we make, everything we do, ties back to that.” BrewDog became our first Funded Club unicorn in 2017, after 11 years of hard graft and several funding rounds. To date, the craft brewery has generated over £73m from more than 120,000 of their Equity Punks. £13.97m of this was raised right here at Crowdcube.
BrewDog’s ‘Equity for Punks’ campaign moulded crowdfunding into what it is today, thanks to the founders’ desire to rally their superfans and turn them into craft beer crusaders. Co-founders James and Martin explain this in more detail:
“We introduced the first round of Equity for Punks back in 2010, changing the world of small business at a stroke. Before then if you wanted to invest in a brewery you would have needed a huge amount of cash and a willing financial wizard at your side. We wanted to change all of that. We believe the men and women who drink our beer should have the opportunity to buy shares in BrewDog and become involved in everything we do.”
Now the UK’s leading craft brewer, and one of the fastest-growing food and drink companies in the UK over the last 6 years, the team at BrewDog know the value of their Equity Punks stretches far beyond the capital they bring to the table. Co-founder James Watt captures this in a nutshell, simply stating “Community is the holy grail.”
Revolut
Our second Funded Club unicorn is digital banking app Revolut. Launched by ex-finance professionals Nikolay and Vlad in 2015, Revolut’s goal was to help people manage and move around money in multi-currencies more easily. The founders had pinpointed common frustrations around exchange rate markups and foreign transaction fees that made managing a bank account abroad a real hassle.
10 months and 200,000 customers later, the team came on board and launched their crowdfunding campaign with us. Their pitch was very popular, closing with a total of £1.01m thanks to 433 investors. Balderton Capital and Index Ventures were amongst these investors, helping to bring Revolut’s valuation to £42m. The following year, DST Global invested a whopping $250m into the company, setting a new valuation of £1.2b and crowning Revolut as our second crowdfunded unicorn. This also meant that our original Crowdcube investors realised returns of 19x.
Revolut recently hit another massive milestone when they announced their customer base had hit 7m. To put that into perspective, traditional banking titan NatWest currently has 7.5m UK current account holders. The team are also galvanising their dedicated community for social good, encouraging them to donate to charities such as WWF and The Rainforest Alliance directly through the app.
Monzo
The Monzo team grew their community so rapidly that they reached unicorn status in just over 3 years. The challenger bank now boasts over 3m customers, with 55k new sign-ups every week. Monzo has raised an astronomical £324m since founding, with £24.19m generated over their Crowdcube campaigns.
After raising £20m with us in their third crowdfunding round in 2018, Monzo closed a new £113m funding round led by YCombinator (YC) Continuity. This bought its post-money valuation to a massive £2 billion. This meant that if you invested in the first crowdfunding round in 2016, your shares would have increased in value 25x.
The challenger bank’s customer base and shareholders have always been key to the business, as Founder Tom Blomfield explains, “Community is at the heart and soul of everything we do.” In the past, they’ve actually turned down additional investment offers from notable international investors to ensure their customers and everyday investors can get a slice of the action.
Insurance Edge Comment:
Crowd-funding cash is notoriously difficult to win in serious volume, with the exception of social justice/charity campaigns. Perhaps the best opportunity in the insurance sector lies within ideas like Dead Happy, which offers its policyholders the chance to make a Death Wish, instead of a simple cash payout to friends or relatives. That definitely appeals to today’s under 35s generation, who find an almost religious solace in being applauded on social media as a `good’ person.
Most insurtech ideas essentially refine existing processes, but if founders can sell the idea of revolution, of truly making things work better on behalf of the policyholder, then perhaps they are onto a winner when it comes to crowdfunding finance.
The key factor seems to be getting people to buy into your brand values, as exemplified by Brewdog – people have a natural need to feel part of something that is bigger than themselves. That’s how start-ups can capture the hearts, and savings, of fans around the globe.
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