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TODAY'S OTHER NEWS

Crowdfunding site used by agents claims “it’s business as usual”

A newspaper claims that a crowdfunding site used by some estate agencies and other property industry companies has suspended trading on a secondary market as it seeks funds to remain in business.

However the crowdfunding site itself says it is business as usual and claims there are inaccuracies in the report.

PropTech firm CreditLadder, online agency MyHomeGroup, landlord website brightLET and rental platform Movebubble have all raised money on Seedrs in the past year alone; many other property firms have crowdfunded on the site before that time.

But now the Sunday Times says Seedrs has told its shareholders that it is temporarily suspending trading on a secondary market until it concludes fund-raising efforts of its own, which are at “advanced stages.”

The newspaper says a report by the crowdfund company’s auditors, KPMG, spoke of the need to raise extra capital after a multi-million pound cash burn; without such extra capital it would “case significant doubt on the group’s ability to continue as a going concern.”

Crowdfunding sites such as Seedrs, and its larger rival Crowdcube, have been at the centre of controversies regarding the quality of the businesses using them to raise funds.

Online estate agency Emoov collapsed towards the end of last year after a multi-million pound fund-raise on Crowdcube just four months earlier, although the brand has subsequently been saved by a new owner.

The paper says Seedrs declined to comment to the newspaper on the story.

However, Seedrs has contacted Estate Agent Today with a statement saying there were substantial inaccuracies in the Sunday Times report.

The statement days: “When we released our 2018 Shareholders Report on 1st August, we announced that we are in advanced stages of finalising a new round of funding. Under the rules of our Secondary Market, we are required to declare a company ineligible as soon as it announces that it is in process of raising a funding round. We applied the rules to ourselves, just as we would with any company, and declared our shares ineligible for the August trading window. That is the only reason that they are not trading.

“For the avoidance of any doubt, we are not running out of cash or close to it. However, in order to continue to deliver the 70 per cent year-on-year growth we've been delivering over the past three years, we need to invest further capital in the business, and that is why we are raising additional capital. We will share details about our new raise as soon as it is finalised.

“The platform is business as usual.”

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