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The Times Reports – Moneybox doubles its valuation as early backers are cleared to sell

The digital savings and investments platform reveals a £70 million share sale to two new institutional investors

The Times

By Patrick Hosking, Financial Editor

24 October 2024

Summary:

Over 26,000 Moneybox investors will soon have the chance to sell part of their stakes as the digital savings and investment platform’s valuation has nearly doubled to £550 million in two years. The company announced a £70 million share sale to new investors, Apis Global Growth Fund and Amundi, allowing private investors to sell up to 10% of their holdings.

Crowdcube, which facilitated Moneybox funding rounds in 2020 and 2022. Crowdfunders from 2020 could see returns of 2.9 times their investment, while 2022 investors may see 1.8 times. Moneybox’s value at the 2022 round was £298 million.

Oxford Capital, has reportedly made 17 times its original investment since backing Moneybox in 2016.

Moneybox, a leading provider of Lifetime ISAs in the UK, now manages £10 billion in assets with over 1 million customers. The share sale will involve mostly existing shares, allowing early investors to benefit from their investments.

Ben Stanway, co-founder and chairman, confirmed Moneybox’s profitability, with £62 million in cash reserves. While they don’t anticipate raising additional capital, they may consider a liquidity event around 2026-28, potentially through a London IPO.

The original article:

https://www.thetimes.com/business-money/companies/article/moneybox-doubles-its-valuation-as-early-backers-cleared-to-sell-w9pdbdx0n

Estimated reading time: 2 min

 

Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  1. You could lose all the money you invest
    1. If the business you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail.
  2. You are unlikely to be protected if something goes wrong
    1. Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here.
    2. Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
  3. You won’t get your money back quickly
    1. Even if the business you invest in is successful, it may take several years to get your money back. You are unlikely to be able to sell your investment early.
    2. The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
    3. If you are investing in a start-up business, you should not expect to get your money back through dividends. Start-up businesses rarely pay these.
  4. Don’t put all your eggs in one basket
    1. Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.
    2. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. https://www.fca.org.uk/investsmart/5-questions-ask-you-invest
  5. The value of your investment can be reduced
    1. The percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
    2. These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

 

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.