SME Accounting Startup Breaks Ground With UK IPO

Equity-crowdfunded FreeAgent, a U.K.-based small business accounting firm, has listed on the nation’s AIM stock exchange, the LSE‘s market for smaller firms. FreeAgent broke ground with the listing but, according to reports, missed the mark on valuation.

Friday (Nov. 18) reports said FreeAgent has become the first IPO on the market delivered by an equity crowdfunding platform, Seedrs, which launched a funding campaign for the startup last year. While a first of its kind, FreeAgent’s listing didn’t yield the valuation it or Seedrs had hoped.

In July 2015, Seedrs opened up the crowdfunding campaign that led to 695 backers providing more than £1 million ($1.24 million) for the company. Its float last week raised about £10.7 million ($13.2 million), slightly lower than its calculated valuation at the time of the Seedrs funding.

Still, FreeAgent’s listing is good news for Seedrs, which also revealed last week that it secured a 14.4 percent internalized rate of return across the platform, reports said.

“Seedrs’ disclosure of portfolio performance is a huge step forward for transparency in the sector and a move that should be applauded,” said Rupert Taylor, CEO of AltFi Data, which previously released a report on the performance of the equity crowdfunding industry.

He added that ongoing disclosure of these types of financial statistics “would further improve credibility by allowing independent verification, consistency of output and benchmarking of performance.”

“Ultimately, this would be in the interests of all parties — investors, issuers and the platforms themselves,” he added.

Reports said Seedrs did not comment on FreeAgent’s listing.