It's beginning to feel like anyone who's anyone in the start-up world has raised cash from crowdfunding. Fed up with the reluctance of banks and the overbearing presence of VC investors, small businesses are increasingly keen on turning to the crowd (and even Andy Murray has got in on the action).
The business that's enjoyed the lion's share of this surge is Crowdcube, the Exeter-based equity crowdfunding website that pioneered the concept back in 2010. Today it announced businesses have now raised a total of more than £100m through its platform. Half of that has been raised this year alone, thanks to an explosion in the number of businesses that have managed to rake in more than £1m each.
'Enabling people to invest in some of Britain’s brightest companies, alongside world-renowned venture capital firms and acclaimed angel investors, on Crowdcube is now commonplace,' said Crowdcube's founder and CEO Darren Westlake (pictured above with fellow founder Luke Lang). 'Crowdfunding is now sitting alongside venture capital, angel investing and traditional debt financing as a mainstream channel for funding rather than an "alternative".'
Read more: Can Crowdcube defy its critics?
Crowdcube's early clients tended to be very young startups without a great deal of traction, but it has managed to attract some much bigger names in the last year or so. JustPark, the parking space finder app backed by BMW, raised £3.7m back in March and Camden Town Brewery raised £2m in the same month.
Yesterday it got another vote of confidence from Brewdog. The craft beer maker has been trying to raise £25m with its own crowdfunding campaign but that appears to be losing momentum, which explains why it has now opened up its funding round to Crowdcube's investors.
Crowdfunding is clearly a hit with start-ups but concerns have been raised about how sustainable it can be. Crowdcube investors have received returns of just in excess of £600,000 so far, despite putting in that £100m. Backing startups is obviously a risky and fairly long-term investment but unless they start getting back some more of their money then it won't be surprising to see investors getting a little uppetty - and thinking twice about putting up more cash.