Seedrs launches the first ever ‘convertible’ equity crowd investment round
Seedrs, the pan-European equity crowdfunding platform, has launched the first ever ‘convertible’ equity crowd investment round. The round is for Future Ad Labs, a fast-growing advertising technology startup that is already backed by some of Europe’s leading venture capital firms.
The convertible allows investors to invest in Future Ad Labs today, with their investment converting into shares in the future at a discount to the future valuation. This means that Seedrs investors will receive more shares for their money than future investors. Future Ad Labs has so far exceeded their minimum target of £300,000 in their first two days from 227 investors ranging from £10 investors up to £90,000 from Passion Capital. They are looking to raise up to £600,000.
Convertibles are very popular in Silicon Valley as a way to raise money now, while deferring the need to place a value on the company until some time in the future. Although investors will not know the valuation at the time of investing, they will know they will be getting a discount when their investment converts into shares in the future, usually when a significant round of financing is raised.
Future Ad Labs has been a major startup success story. Initially called ‘Digital Spin’, the company began life by raising £60,000 from 70 investors via Seedrs in July 2012. After merging with Future Ad Labs, the business went on to receive a further $1 million investment from venture capital firms as well as other industry angel investors in 2013. Passion Capital led the investment round and other investors include Balderton Capital and Ballpark Ventures.
Future Ad Labs boasts a diverse team of scientists, engineers and gaming experts who have combined their expertise to replace frustrating experiences on the web with interactive advertising formats. Their flagship product, PlayCaptcha, replaces CAPTCHAS, which are a ubiquitous security feature that force website visitors to rewrite distorted words to prove they are human and not a computer bot. They are commonly found when buying tickets online or completing a registration form. At least 300 million CAPTCHAs are completed daily, which equates to 150,000 human hours wasted every day, making them an omnipresent experience that frustrate users around the world. In contrast, PlayCaptcha offers an innovative alternative to traditional CAPTCHAs by providing a more enjoyable user experience, which proves to be more engaging than standard digital advertising formats, and creates a new revenue stream for publishers.
The award winning launch of PlayCaptcha is soon to be followed by the launch of fun and engaging alternatives to pay walls and video loading pre-rolls which, similar to PlayCaptcha, will deliver guaranteed brand engagement and an incremental revenue stream for publishers.
To date, the company has been a part of Newcastle-based Ignite 100, and BBC Worldwide Labs,and has collaborated with ITV, BBC and other leading publishers. Furthermore, Future Ad Labs has secured brand deals with global iconic brands including Heinz, Nestle, Reckitt Benckiser, Renault, Sky and Unilever. The company was named Hot Company of the Year at The Festival of Media Global and Asia in 2013. This year Future Ad Labs won ‘Best User Experience’ at the Marketing on Mobile Awards and was shortlisted for ‘Best Adtech Startup’ at the Europas in June.
Jeff Lynn, co-founder and CEO of Seedrs said, “Offering the first ever crowd convertible is very significant news, not just for Seedrs but for the equity crowdfunding industry as a whole. Unlike some other recent crowdfunding products which appear to limit the potential upside for investors while still exposing them to all of the risks, convertibles allow investors a chance to actually increase their returns.
Together, Future Ad Labs, its investors and Seedrs are proving that crowdfunding is coming of age. We are all very excited about this development.”
Howard Kingston, Co-Founder of Future Ad Labs, added:“We’re thrilled to be returning to Seedrs to raise money to help us to continue our product development and further expand our business proposition before we raise a significant round of funding. We have a great history with the Seedrs team, and are very excited to be the first startup to use convertibles on a crowdfunding platform.
Coupled with the Seedrs nominee structure which has been integral to our ability to raise top tier VC funding from Passion, Balderton, and Ballpark Ventures, we believe this convertible will provide us with the perfect launchpad before we go to market for a large round.”
Future Ad Labs will use the money raised in this convertible round to launch new products, continue product development and close existing business opportunities, before they look to raise a significant venture capital round in the near future.