The first successful British crowdfund exit has finally got into gear with the sale of an electric car sharing club to hire giants Europcar.
E-Car Club investors drove a tough deal with the buyer, and claim they have made a multiple return on their investment of £100,000.
However, neither side will disclose the sale price, arguing the information is commercially sensitive.
E-Car Club started life on Crowdcube with a pitch to raise £100,000 as a start-up idea.
The company persuaded 63 investors to stake cash of between £1,500 and £15,000 in return for shares.
The London-based start-up charges drivers aged 19 or over just £4.50 an hour to take a car, including insurance and power.
“E-Car Club is revolutionising the transport sector by providing a convenient, hassle-free, environmentally-friendly alternative to private car ownership,” says the firm.
Europcar took a stake in the firm in August 2015.
E-Car Club has now announced that all the initial investors have made a full exit from the company.
The firm was founded by entrepreneurs Chris Morris and Andrew Wordsworth in 2011.
The pair went on to become one of the first successfully equity funded business on Crowdcube.
“By joining forces with Europcar we now have access to the considerable investment and resources that we need to accelerate our growth and reach more communities,” said Chris Morris.
“We will continue to have a social mission at the heart of our business: to improve mobility on a local level whilst simultaneously reducing the cost and environmental impact of each journey taken.”
Wordsworth has also raised £850,000 in two funding rounds on Crowdcube with Powervault, a start-up developing a storage device for solar power.
E-Car Club leads the way for other successful crowdfunded projects to move towards a successful exit.
As a young financial sector, the first deals are only just emerging from crowdfunding. Figures from other crowdfunders suggest one in five deals fail.
Altogether, 63% of equity crowdfunded deals on platform Seedrs failed to turn a profit.
“Start-ups and growth ventures are, by their nature, a long-term asset class, and meaningful returns are unlikely to be realised for five to seven years at a minimum, if at all,” says Seedrs CEO Jeff Lynn.