Scancell Holdings Plc's (LON:SCLP) successful £6.1mln share placing is particularly significant as it marks the first time - via crowdfunding - that retail investors have been able to access an AIM company raise on the same terms as City institutions.
The AIM quoted cancer drug developer will use the injection of cash to accelerate the development of both its ImmunoBody and Moditope platform technologies that help the body’s own immune system fight the disease.
The crowdfunding element of the funding was handled by SyndicateRoom, and the crowdfunding route was the only one available to new retail investors that wanted to participate in the share placing.
Retail investors, via SyndicateRoom, received new Scancell shares at the same discount that was received by the institutional investors.
"We have pioneered this new model of share distribution - giving brokers and companies access to previously untapped retail demand,” said Tom Hinton, SyndicateRoom's head of capital markets.
“It has never been done before and, as such, SyndicateRoom is the only means for retail investors to participate in the share offer, obtaining the same discount as institutional investors.
“Not only are we giving the crowd access, but we’re doing so at the most advantageous price in the market for individual investors."
SyndicateRoom calls its crowdfunding system a ‘pioneering structure’ and says it will give companies access to previously untapped retail demand for primary capital raises.
The company intends to continue offering retail investors opportunities the in the past were typically only offered to institutional investors
The company says the average discount to the City was about 10% - meaning that £1.65bn of value was handed to traditional City investors – and SyndicateRoom intends to spread this benefit to a far wider range of investors.
Significantly, it is also the only alternative funding platform to give direct access to both public and private equity. The company says that means it can give its members the opportunity to participate ‘across the entire funding journey of growth businesses’.
Goncalo de Vasconcelos, SyndicateRoom co-founder and chief executive, said: “SyndicateRoom was built on the fundamental belief that everyone should have equal access to investment opportunities, and that individual investors should get the same deal as the professionals.
“We’ve challenged City conventions by allowing crowdfunders to participate in a company’s offer of shares on equal terms to large institutional investors – and it will be for the benefit of individuals and companies across the UK who are confronting society’s most important challenges such as Scancell’s development of cancer treatments. “
Scancell announced on March 9 a placing to institutional investors, and on March 24 SyndicateRoom investors were invited to apply for shares.
The fundraise was done in two tranches. A total of £3.4mln-worth of stock was placed at 17p a share.
Separately, existing shareholders were also given the opportunity to follow their money in open offer, which brought in another £2.7mln.
Scancell chairman John Chiplin said he was “delighted” at the response from investors.