Transaction overview
Founders Future, a prominent French venture capital firm, acquired Sowefund, an equity crowdfunding platform based in France. The deal was completed on October 19, 2023, following its announcement on October 18. While the exact value of the transaction remains undisclosed, it marks Founders Future's strategic move into the retail investor space through a fully integrated yet independent acquisition.
Deal structure and financing
Details surrounding the financial aspects of the deal, including the equity/debt split and lead banks involved, are not publicly disclosed at this time. The lack of specific information makes it challenging to assess leverage metrics or any potential lock-up terms for Sowefund's founders or existing shareholders. However, Founders Future has indicated a multi-million euro investment plan aimed at scaling up Sowefund’s operations and expanding its team over the next one to two years.
Strategic context
Founders Future acquired Sowefund with the strategic goal of diversifying its investment methods and attracting retail investors to complement its existing venture capital activities. The move addresses two major trends observed by Marc Menasé, Founders Future's founder and CEO: a new generation of investors seeking transparency in their investments and a desire for direct engagement with startups; and the opportunity to bring professional discipline from VC practices to crowdfunding platforms. Sowefund’s track record since 2014, handling over €81 million in raises across 103 campaigns, positions it well as a leading player in equity crowdfunding. The acquisition enables Founders Future to tap into an alternative funding source for startups amid the current challenging VC landscape.
Regulatory path
As of now, there is no publicly available information regarding regulatory scrutiny or approvals required for this transaction. Given that both companies are based in France and operate within the European Union, it can be inferred that they would need to adhere to EU regulations governing financial services and crowdfunding activities. The acquisition may also benefit from Sowefund’s recent certification as a European crowdfunding service provider, which allows them to operate across multiple EU jurisdictions. This regulatory milestone could facilitate future expansion plans for Founders Future's new subsidiary within the continent.