European life sciences companies are increasingly using equity crowdfunding to finance their growth, a new report from market analyst BIOCOM AG has revealed.
The report titled “Analysis of Crowd-based Financing in European Life Sciences” found that UK equity crowdfunding platform SyndicateRoom leads the way when it comes to life science fundraising.
Since its launch two years ago SyndicateRoom has completed 16 life science raises across Europe.
The found that since 2010, crowdfunding platforms have raised £17m across Europe for 42 life science businesses, with an average raise of around £400K.
Most of this momentum has been in recent years, with nine raises in 2013, 18 raises in 2014 and 13 in the first half of 2015.
SyndicateRoom alone accounts for almost 40% of those raises.
Report author Sandra Wirsching said: “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.
“It is considered as a marketing tool and add-on to other financing instruments.”
“British crowdfunding platforms are amongst the most experienced in Europe. This is mostly due to 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.”
The full BIOCOM report is available here.