Urbanara makes funding history
Home wares retailer Urbanara may start a new trend in the crowdfunding space as it announces plans for a crowd-sources IPO via German platform Bergfüerst. Normally used as a way to simply fundraise money, this will be the first time that funds are raised via a crowdfunding platform in exchange for company equity as part of an IPO.
This September, the company will launch a two-week IPO during which interested investors can bid on shares in a given price range and receive equity in Urbanara, as well as accompanying benefits and services. Urbanara prides itself on managing its core business processes itself, including managing its entire supply chain and only selling products from its own label.
The company has approximately 25,000 customers and is looking to raise at least €3 million via the IPO. The decision will allow the company to directly manage the allocation of corporate equity to investors and interact with investors who are keen in helping the business grow.
Standard IPO rules still apply
Urbanara is a great fit for the Bergfüerst platform because the company is no longer considered a startup and its business concept is off and successfully running; in fact, it is estimated to bring in €5million in sales this year. Although the IPO will be the first of its kind to take place via a crowdfunding portal, standard IPO rules and regulations will still be enacted.
Urbanara will have to provide investors with a prospectus and adhere to other directives typically followed by a venture capital fund. This will combine the social, interactive element of crowdfunding with the formalities of investments and hopefully result in a happy medium for both investors and Urbanara staff alike.
There is definitely some risk involved as this IPO will be the first of its kind. Now that the SEC has finally given the okay for startups to advertise that they are fundraising via crowdfunding, which took a considerable length of time to finally be discussed and approved, adding in IPOs to US-based crowdfunding sites could cause even more obstacles for the industry. But if more crowd funding portals implement the ability for businesses to conduct IPOs in-platform and adhere to standard investment protocols, this could become a more likely occurrence in the crowdfunding space.