Fairtrade bodycare company Bubble & Balm has become the first company to raise growth capital through Crowdcube – the pioneering crowdfunding website set up to offer investors equity in small businesses.
Warwickshire-based Bubble & Balm received investment totalling £75,000 via Crowdcube, in return for a 15% equity stake. In total, 82 investors contributed between £10 and £7,500 to meet the funding target.
The investee plans to use the funding to expand its product range, enhance marketing activity and meet increasing demand from renowned retailers such as Waitrose, Oxfam and Planet Organic.
Sue Acton, founder of Bubble & Balm, said that she was attracted to Crowdcube’s financing initiative, as an alternative to seeking more traditional investors, because the model fitted well with the company’s image of working as a community.
She said: “I'm very much looking forward to working with all our investors as we take Bubble & Balm to the next level.
“Some of our new shareholders (from Crowdcube) have already offered their skills as well as their cash to support our growth, and this is another huge benefit of crowdfunding - not only do we now have the investment we need to deliver against our plans, we also have a diverse team of supporters (and customers) too.”
The deal is a major landmark for Crowdcube, which enables small firms to connect with “a nation” of small investors, instead of one or two high net individuals, to find funding.
Darren Westlake, who founded Crowdcube last year, said that the investment raised by Bubble & Balm marks a “significant moment in the history of small business finance in Britain.
“In the current climate, with banks being risk averse, we are thrilled that Bubble & Balm has succeeded in getting vital growth investment.”
Speaking about the future of his venture, Westlake added: “This is just the start. Many entrepreneurs on Crowdcube are on the verge of achieving their funding targets using our crowdfunding model. I firmly believe that Crowdcube is the future of business finance in Britain.”
There is no cost for entrepreneurs to sign up to Crowdcube, although the platform receives a 5% success fee. If the target funds are not met, investors get their money back and no success fee is charged to the entrepreneur.
If you’re interested in raising finance using crowdfunding take a look at our crowdfunding platform. We’ve partnered with Crowdcube to offer businesses a new way to raise seed or growth capital.