In an update sent to investors today, StartEngine announced that they had officially closed their acquisition of SeedInvest. The combined company will now exceed 1.5M users, and has raised more than $1B of funding for startups.
As we covered previously, SeedInvest was a well-known name in the space that traded hands a few times over the years. Their brand does not seem likely to survive this most recent transaction, however, with the plan being to fold SeedInvest into StartEngine.
From Discovery To Consolidation And Leadership
EquityCrowdfunding is still in its infancy, especially when compared to investing in public markets. That having been said, this still seems like a significant milestone. While the earliest phases of the industry were marked by a myriad of competitors emerging, we may now be entering a phase where the leaders distance themselves from the pack through both expansion and consolidation.
Based on data from Kingscrowd, in the first 3 quarters of 2022, StartEngine just barely led crowdfunding platforms in dollars raised. The platform with the 5th most dollars raised was SeedInvest. As a combined company, StartEngine would have been over 27% ahead of their closest competitor.
However, StartEngine is not the only company trying to solidify a leadership position. In February, Wefunder, the crowdfunding platform that already leads the pack based on the number of new deals, announced they were expanding their reach into Europe. So far there have been raises from 9 European startups on the platform.
Wefunder’s approach is a bit more humble when compared to Republic. In order to get access to European startups and European equity crowdfunding investors, Republic purchased Seedrs for a whopping $100M.
Not one to be satisfied with a footprint on just two continents, Republic sought to expand even further in 2022. Last April, they announced Republic Asia with an initial focus on Korea.
StartEngine, Republic, and Wefunder are the three primary platforms in the US for equity crowdfunding. While they’re all taking different approaches, each is pursuing growth both domestically and internationally. As these companies grow, mature, and expand, it becomes increasingly difficult to imagine a new company unseating them from the top of the pack.
One thing to keep an eye on – does the SeedInvest acquisition simply bring business that would have gone to SeedInvest onto StartEngine? Or does it do anything to attract crowdfunding campaigns that otherwise would have chosen to go with another platform?