INSIGHTS / News

Equity crowdfunders who invested seed capital in a company, via leading equity crowdfunding site Crowdcube, are today to receive a full exit from their investment. In a worldwide first, 63 investors who helped E-Car Club, the UK’s first entirely electric car sharing club for businesses and communities, to raise £100,000 in 2013 are to be given a multiple return on their investment following the sale of the business to Europcar, Europe’s leading car rental and mobility company.

E-Car Club was founded by social entrepreneurs Chris Morris and Andrew Wordsworth as a start-up in 2011.  It was one of first companies to seek equity capital via Crowdcube where its business model combined with its social purpose appealed strongly to investors. The company combines the increasing popularity of pay-per-use car clubs as an attractive, affordable alternative to traditional car ownership, with the improved performance and reduced price of electric vehicles. E-Car Club works closely with councils, social landlords and community group partners to deliver improved economic, social and environmental outcomes for local residents.

“By joining forces with Europcar we now have access to the considerable investment and resources that we need to accelerate our growth and reach more communities,” said Christopher Morris, co-Founder of E-Car Club. “We will continue to have a social mission at the heart of our business: to improve mobility on a local level whilst simultaneously reducing the cost and environmental impact of each journey taken.”

Following its fundraising on Crowdcube, E-Car Club went on to raise further growth capital via a group of socially minded investors, some of which included the original crowd investors, before securing institutional investment through Ignite Social Enterprise LLC, the UK’s first social impact fund specifically targeting energy related ventures, backed by Centrica Plc.

Andrew Wordsworth added: “We absolutely loved raising investment on Crowdcube in 2013, which really kickstarted our growth and we’re exceptionally grateful for the support of the crowd from investment through to exit. Without their initial investment today’s announcement and our ability to deliver social benefits within local communities would not have been possible. The funding process and professionalism of the Crowdcube team matches their position as number one in the market and we’re delighted that our investors, crowdfunders and angels alike, are realising a multiple return. This demonstrates how Crowdcube can make a huge difference to business ideas, job creation and economic growth.”

E-Car Club already has 19 operational hubs across the UK and expects to continue triple figure growth rates over the next few years. Individuals and businesses can rent a vehicle for as little as an hour. Its acquisition by Europcar marks a fundamental step in the evolution of crowdfunding.

Luke Lang, co-founder of Crowdcube commented, “The sale of E-Car Club to one of the world’s leading car-hire companies and the multiple return delivered to the people who invested through Crowdcube marks another momentous milestone in the history of equity crowdfunding. Delivering financial returns are vital to the long-term growth of equity crowdfunding so we’re extremely proud to be the first to achieve this in just over two years after investors backed E-Car Club. With over 260 businesses funded on Crowdcube I am certain that this will be the first of many.”

Many investors in E-Car Club have gone on to invest in other businesses seeking growth capital via Crowdcube such as Powervault, an electricity storage device to capture solar power, which raised £150,000 and £700,000 in 2014 and 2015 respectively. Powervault, like E-Car Club was launched by Andrew Wordsworth via his Sustainable Venture Development Partners (“Sustainable Ventures”) vehicle works with investors, entrepreneurial managers and corporate partners to originate, build and grow businesses in the low carbon and sustainability sectors.

Luke Lang continued: “Investing in early-stage businesses is risky but it can also be very lucrative if you diversify judiciously. E-Car Club, whose crowd investors included business owners, serial investors and senior directors at global banks as well as everyday investors, is a great example of how our investor community is sophisticated and understands the importance of diversification having made an average of 12 investments each on Crowdcube.  As crowdfunding becomes mainstream it’s now commonplace for people to invest on Crowdcube alongside world-renowned venture capital firms, acclaimed angel investors, institutions and even the UK Government.”