Seedrs CEO Jeff Kelisky (L) and Crowdcube CEO Darren Westlake. Photo: Seedrs/Crowdcube/Yahoo Finance UK
Seedrs CEO Jeff Kelisky (L) and Crowdcube CEO Darren Westlake. Photo: Seedrs/Crowdcube/Yahoo Finance UK

The chief executives of Britain’s two biggest crowdfunding businesses say their planned combination will allow them to supercharge growth and it’s not about weathering the COVID-19 crisis.

Darren Westlake, the chief executive of Crowdcube, and Jeff Kelisky, his counterpart at Seedrs, told Yahoo Finance UK their planned merger was geared towards expansion, rather than cost cutting.

“The purpose of the merger is growth,” Kelisky told Yahoo Finance UK on Monday. “It’s not harvesting, it’s not consolidation. It’s absolutely about the growth opportunity that we feel is untapped.”

Crowdcube and Seedrs announced plans for an all stock merger on Monday, hoping to create a combined business worth around £140m ($181.8m).

READ MORE: Crowdfunding platforms Crowdcube and Seedrs to merge

The deal brings together the UK’s two biggest equity crowdfunding platforms, which between them have helped hundreds of British startups raise over £2bn.

“We’ve got a lot more in common that we have got differences,” Westlake told Yahoo Finance UK.

‘Stay on the front foot’

The deal was hailed by many in the fintech sector as an obvious combination. But some raised questions about whether it was a shotgun wedding, given financial conditions. Crowdcube and Seedrs lost £7.2m between them last year and activity on Seedrs’ platform dropped 20% in the early stages of the pandemic.

Seedrs’ annual results, published on Tuesday, show auditors flagged the business may need to raise money to keep going, particularly given the impact of COVID-19.

“They have to do something,” said Michael Jackson, an experienced tech entrepreneur and venture capitalist who is now a director of businesses including Axa UK and Volvo.

Both Westlake and Kelisky rejected this picture, insisting they are in fine fettle.

“The question behind the financials relates to: