By Oliver Smith on Tuesday 6 April 2021
CEO Anand Sambasivan and Draper Esprit partner Vinoth Jayakumar talk about the post-Deliveroo opportunity ahead.
In the last few months a host of high-profile IPOs, including Deliveroo and PensionBee, have turned to PrimaryBid in order to include a customer-only share offering in their float plans.
The flurry of activity comes after years of steady growth for the fintech, which secured $50m in investment just last October from venture backers including Draper Esprit to continue its growth.
We spoke with PrimaryBid’s CEO and founder Anand Sambasivan, and Draper Esprit partner Vinoth Jayakumar, in the wake of Deliveroo’s IPO last week to find out how the journey to democratise access to public offerings is going.
“We’ve certainly captured the imagination of so many companies that are now listening on both sides of the Atlantic,” Sambasivan told AltFi, adding that the last few months have been a “career highlight” for him.
Over the last year or so the fintech has focused on narrowing the kinds of retail investors it can help companies reach, building out its tech to target existing shareholders, employees, and even specific friends, family and customers.
“Previously, if you allocated say a billion pounds to retail, the company’s going to be asking who these people are? How are they connected to my company? What are they going to do with the stock?”
“With all of these unanswered questions, there's a natural fear and uncertainty around allocating to this unknown quantity.”
PrimaryBid’s focus has been to offer the same level of data around retail investors that the investment banks running an IPO might give to the listing company around its institutional investors.
“This is why we've been able to get that allocation for stakeholders. I wouldn't say it's a change or a shift in our strategy, but it's definitely a maturing as we reach this very interesting point around how we think about communities and deals.”
Customer-only offerings, or community offerings, are nothing new in the world of equity crowdfunding—where Crowdcube has long offered the tech for companies like Freetrade and Monzo to target their existing customers—but for public markets it’s novel.
From the retail investor perspective, Vinoth Jayakumar says Draper Esprit has been on this journey of democratising market access since 2016 when the VC fund chose to list itself on the London Stock Exchange.
“We democratised access to the private markets through a public vehicle, which means that the everyday investor can now invest in Revolut [a Draper Esprit portfolio company].”
“Last year we saw PrimaryBid as leading the same democratisation at the individual level, and PrimaryBid came up as the only company of its kind in the world to be doing that.”
Jayakumar believes a “retail renaissance” is taking place, with three companies in Draper’s portfolio, PrimaryBid, Freetrade and Revolut, all working to lower the retail barriers around equities, offerings, crypto and commodities.
“It's just a nice way of saying the everyday investor is becoming more and more empowered and wants to know exactly how their money is being invested, because they're more in control of it.”
Clearly, empowerment has a flip side, with Deliveroo’s IPO opening down some 30 per cent last week and leaving retail investors with painful day one paper losses on their collective £50m stake in the food delivery giant.
However, the direction of travel that PrimaryBid, Draper Esprit and the broader market is on, towards opening up and democratising access, is undeniable. Bumps and all.
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