PrimaryBid, a UK-regulated platform connecting publicly listed companies with everyday investors for discounted share issuances has previously raised $3M. It’s now upped those stakes with an $8.6M funding round, led by UK VCs Pentech and Outward VC with participation from new and existing investors. Craig Anderson, a partner at Pentech, will join the PrimaryBidBoard of Directors with Outward VC having a Board Observer seat.
This investment is representative of the trend towards unpacking complex financial investment products for the average person, especially in the UK.
The FCA-regulated platform recently made a long-term commercial agreement with Euronext, the leading pan-European exchange in the Eurozone. The partnership gives the company access to nine new geographies, with the first new site launching in France later this year.
Commenting, Anand Sambasivan, co-founder and CEO of PrimaryBid, said: “Everyday investors are a vital part of the stock market and yet unable to buy discounted share deals – a longstanding imbalance in the public markets. This is true whether it is a government selling down its holding in a large company or a quoted company is raising growth capital. Our platform addresses this challenge, giving small investors the same access as traditionally afforded to large institutional investors.”
Investors can tap into PrimaryBid’s centralizing infrastructure that allows access to everyday investors as part of a share issuance, including block sales. The inclusion of retail investors can improve pricing and liquidity outcomes for their clients. The company’s solution allows private investors to participate, at the same time and the same price, delivering open access regardless of the size of their investment. The service is free of charge for investors, from £100 upwards.
PrimaryBid doesn’t have competitors because Retail investors have not previously had access to discounted equity offerings run by investment banks. This is because the retail investment market is too fragmented, and these deals are highly time-sensitive. As a result, only clients of Investment Banks (i.e. institutional investors) could previously access these attractive deals.
So now, listed companies that want to raise more capital on the stock exchange by issuing new shares can now connect with retail investors and offer these retail investors these shares at the same discounted rates as those offered to institutional investors. “In the past, these retail investors just couldn’t access these attractive deals for these new shares,” explains Sambasivan.
Craig Anderson of Pentech said: “We believe equity capital markets infrastructure is dominated by an institutional focus and is not geared for retail investors, which unfairly restricts consumer access to the primary equity markets. PrimaryBid addresses this problem by using technology to democratize the equity capital markets to provide a new asset class to retail investors.”
Kevin Chong of Outward VC said: “By bringing publicly listed companies directly to ordinary investors, PrimaryBid addresses increasing frustrations felt by equity issuers and potentially expands global equity markets to the benefit of all players – investors, issuers and investment bank advisers.”
Pentech previously invested in Nutmeg (which recently closed a £45m funding round led by Goldman Sachs). Outward VC has previously backed Monese, Curve and Bud.