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London Stock Exchange grants intermediary status to crowdfunding platform SyndicateRoom

Monday, March 14, 2016
Opalesque Industry Update - SyndicateRoom, a UK crowdfunding platform, has announced its intermediary status with the London Stock Exchange, enabling crowdfunding investors to participate in IPOs and placings on the London Stock Exchange Main Market and AIM.

First crowdfunding platform to join the public markets

SyndicateRoom today becomes the first crowdfunding platform to join the public markets, receiving approved intermediary status for the £200m IPO of HealthCare Royalty Trust Plc. This follows HealthCare Royalty Trust’s application for admission of its shares to the premium listing segment of the Official List of the Financial Conduct Authority.

SyndicateRoom is currently the only alternative finance company to provide its members with direct access to public and private equity markets - helping their investor base to diversify their exposure to different asset classes through one platform. A wide spectrum of equity opportunities will be available to SyndicateRoom members, from early-stage crowdfunding rounds through to high-growth IPOs, pre-IPOs and discounted placings encouraging greater investor loyalty. SyndicateRoom members will now be able to participate across the entire funding journey of growth businesses.

SyndicateRoom has been recognised by AltFi as among the best platforms for managing risk and safeguarding investors. SyndicateRoom has undertaken over 70 capital raises through the platform since it was founded in 2013.

Equal access to the IPO market

The launch of SyndicateRoom’s public equity capability means individual investors will be placed in the same position as professionals, with the ability to participate in the IPO market and the opportunity to benefit from the same discounts for new equity issues.

Discounted placings are typically only offered to institutional investors. Over the past two years, over £16.5bn was raised on the London Stock Exchange via placings and IPOs, with an average 10% discount given. That means £1.65billion of value has been given to the traditional City of London investment community. SyndicateRoom seeks to spread this benefit to a far wider range of investors and believes there is strong appetite for investment among individuals considered too small to be embraced by the advisor community. 12 million individuals in the UK population are estimated to hold individual company shares but over three quarter of those did not buy into public equity in the last year, meaning SyndicateRoom will be providing the London Stock Exchange with an important and a valuable new source of retail investor demand.

SyndicateRoom Members to participate in HealthCare Royalty Trust’s IPO

SyndicateRoom has received approved intermediary status for the £200m IPO of HealthCare Royalty Trust Plc, and has a strong track record in healthcare investments:

· In August 2014, Oval Medical Technologies successfully raised £1,118,647 through the SyndicateRoom platform, to manufacture a pilot tool for its drug-device combination study

· In December 2014, Lightpoint Medical successfully raised £989,998 through the SyndicateRoom platform, to bring its two lead imaging products to the EU and US markets

· In May 2014, Fertility Focus’s first funding round successfully raised £880,500 through the SyndicateRoom platform, to invest in marketing for its fertility monitor

· In June 2014, Time for Medicine successfully raised £330,000 through the SyndicateRoom platform to further expand its offering, using cloud technology to bring specialist medical diagnoses to patients in primary care or at home

· In November 2015, Check4Cancer successfully raised £550,543 through the SyndicateRoom platform, to drive top line growth through brand building and customer acquisition

Goncalo de Vasconcelos, CEO and Co-Founder of SyndicateRoom, said: “SyndicateRoom has already built a large member base of online crowdfunding investors, helping to create a new equity-owning class – the mass affluent. We are now seeking to democratise access to the public market, widening the reach of IPO discounts and putting the public back into IPO. SyndicateRoom’s move into the public equity market is another step in the evolution of the London Stock Exchange providing capital to growth companies, now with greater participation from individual investors.”

The news that retail investors will now be able to participate in IPOs is extremely welcome", commented David Brown, stock market investor and SyndicateRoom member. "I've been investing for more than 25 years on the stock exchange and 15 years as a business angel and am incredibly excited about the prospect of having access to IPOs and private placings on a level playing field with institutional investors. It's fantastic to see SyndicateRoom leading the way, once again".

Jonathan Milner, co-founder and deputy chairman of Abcam plc said: "I wish this model had existed back when I listed Abcam. SyndicateRoom will enable a much larger base of retail shareholders for companies, which in turn will increase liquidity and stability. I believe this is a very positive shift for the industry."

SyndicateRoom's Head of Capital Markets, Tom Hinton, who joined the company in 2015 from Citigroup, where he was VP in the capital markets team, said: "At SyndicateRoom we believe that equality should be at the heart of equity investment. Giving the retail community access to the same benefits that institutional investors enjoy signals a strong starting point to achieving just that."

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