厂别别诲谤蝉听补苍诲听Crowdcube听have agreed to terminate their planned merger after it was provisionally blocked by a听competitions听谤别驳耻濒ator.听
Exeter-headquartered Crowdcube and London-based Seedrs are the two largest equity crowdfunding platforms in the UK.听 听
The听Competition and Markets Authority, having听investigated听the听proposed merger,听concluded that听it would result in the combined company having at least a 90% share of an听鈥榠mportant market鈥�.听
It found that the companies competed听closely against each other to win the business of SMEs, with a significant number of businesses viewing equity crowdfunding as their only way to secure financial backing.听听
鈥淎 deal between the two could result in UK SMEs and investors losing out听as a result of听higher fees and less innovation…听The CMA鈥檚 initial view is that blocking the merger may be the only way of addressing these competition concerns,鈥� it said.听
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Jeff听Kelisky听and听Jeff Lynn, CEO and听Executive Chairman听of听Seedrs听respectively,听revealed the decision in a joint statement,听as did听Darren Westlake, CEO of听Crowdcube.听
鈥�Following on our message about the CMA鈥檚 provisional findings yesterday, I wanted to share with you that we have agreed to terminate our merger with听Crowdcube,鈥� said the听Seedrs听duo, who said earlier that they felt the CMA had听鈥済otten it wrong鈥�.听听
They continued:听鈥�We fervently disagree with the CMA鈥檚听view, but听given the low likelihood that they will change their mind at this point, we have concluded that it does not make sense to continue the battle.鈥�听
They added that they had听prepared for the听possibility听of the deal being blocked by raising a funding round, the details of which will be announced soon.听
In his statement, Westlake added: 鈥�Crowdcube听recorded outstanding levels of growth in the last 12 months and remains in a very strong financial position following record revenue in 2020 and two consecutive quarters of profitability.听听
鈥淲e continue to invest in our people and products, and we expect to be profitable again in the first half of 2021, with an unprecedented level of high-profile European businesses set to fundraise with us in the coming weeks.听
鈥淲e are excited by the growing market opportunity in the UK and across Europe and we will share further updates on our plans for the future in due course.鈥�听
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Kirstin Baker, Chair of the CMA inquiry group, said:听鈥淚nvestment in small and growing businesses is vital to the UK economy as we emerge from the coronavirus pandemic, and we have given this deal careful consideration.听听
鈥�These are the two largest equity crowdfunding platforms in the UK, with at least a 90% share of the market between them and we see them competing closely on price and innovation. This means the merger could lead to less choice and higher fees for SMEs and investors.听
鈥淲e have therefore reached the view that blocking this merger is likely to be the best way to maintain competition. The decision to block any deal is not taken lightly and is only made if there is a real risk of customers losing out.鈥�听
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