Last year we worked with a group of social crowdfunding platforms to co-develop and launch a match fund for social investment crowdfunding.
The Crowd Match Fund, which launched in December 2016, is aimed at supporting the uptake of SITR eligible investments listed on Ethex, Crowdfunder and Community Chest. We hope that this facility will encourage greater participation by the crowd in funding socially motivated projects, enable charities and social enterprises to raise more capital and encourage more platforms to engage with SITR.
We are delighted that the first three deals have been successfully matched through the fund, the first of which was a £280,000 Transferable Bond raised by Southville Community Development Association (SCDA) on Ethex. The offer came to market with support from the corporate finance team at Triodos Bank, who worked with SCDA to arrange the bond alongside grant funding from Power to Change.
The match fund theory of change was as follows:
- The presence of the match funding will encourage more SITR deals to happen;
- …which in turn will develop a track record and give more confidence to potential investors;
- … which will then encourage more arrangers and platforms to bring offers to market;
- … thereby encouraging more investors to invest.
Whilst it is too early to speculate about the efficacy of the fund, Triodos and Ethex have shared some initial reflections on how the SCDA offer benefited from the match:
The Crowd Match facility enabled us to raise twice the amount of investment for SCDA under the SITR terms than we would have been able to otherwise. This was a fantastic result as it has given SCDA access to £560,000 of investment at a very low cost of capital and, combined with grant funding, enabled them to move forward with the development of their new nursery. We hope that other social sector organisations will make use of it going forward.
Southville Community Development Association provides significant value to Greater Bedminster’s local community by supporting more than 25,000 people each year with much-needed nursery places and community services. Match funding encouraged investors to support the offer in the knowledge their investment was being doubled and the full £280,000 target was hit in less than five days, making a total of £560,000 - a fantastic achievement.
As further deals are matched through the fund, we’ll be sharing more information about how the match is playing a role to encourage retail social investment deals to be funded.