European life sciences companies are increasingly using equity crowdfunding to finance their growth at a time of rapid progress for the industry. UK equity crowdfunding platform SyndicateRoom leads the way, enjoying top ranking across the whole of Europe, having completed 16 life science raises since launching less than 2 years ago.
These are the conclusions of a new report from German market analyst, BIOCOM AG, published in a report titled “Analysis of Crowd-based Financing in European Life Sciences.” The report is an overview of the available crowdfunding platforms for life science companies and an analysis of the role that crowdfunding plays in meeting the capital demands of the range of companies focused on improving quality of life.
Since 2010, crowdfunding platforms have raised £17 million across Europe for 42 life science businesses, with an average raise of around £400,000. Most of this momentum has been in recent years, with 9 raises in 2013, 18 raises in 2014 and 13 in the first half of 2015. SyndicateRoom alone accounts for almost 40% of those raises.
“With respect to the high capital demand in the life sciences, it was only a question of time before firms jumped on the bandwagon of crowd financing”, said report author Sandra Wirsching. “It is considered as a marketing tool and add-on to other financing instruments.”
Commenting on SyndicateRoom’s leadership across Europe, Wirsching said: “British crowdfunding platforms are amongst the most experienced in Europe. This is mostly because of Britain’s favourable regulatory framework that supports investment in higher-risk technology companies. Furthermore, platforms with strong ties to professional investors, such as SyndicateRoom, fit best to the high capital demand of life science companies.”
SyndicateRoom CEO Gonçalo de Vasconcelos added: “Our unique investor-led model allows our members to co-invest alongside experienced angel investors in highly sophisticated investment opportunities on the same economic terms as the lead investors. This is a powerful and successful model for life sciences businesses as they raise capital, as well as a range of other industries, including pharmaceuticals, information technology, property and even movie making.”
“We’re particularly proud to lead Europe in life sciences, against a field that includes specialist life sciences platforms. This is a testament to the strength of our model, uniting the crowd with professional investors that often have deep, sector-specific expertise,” added Gonçalo. A detailed case study focused on life sciences business Bactest, and their crowdfunding campaigns through SyndicateRoom, is available on request.