A new online platform is, for the first time, giving UK-based investors the chance to invest in some of the most exciting frontier and emerging growth companies in the world.
Emerging Crowd, the brainchild of co-founders Lucien Moolenaar and Will Tindall, will offer investors the opportunity to buy equity and bonds issued by businesses focused on selected frontier and emerging markets.
Economists from the World Bank have identified that returns from private equity in frontier and emerging markets often outperform both developed market private equity and emerging market listed stocks, while also exhibiting low correlation with developed market investment strategies. To date these opportunities have almost always been the preserve of high net worth investors and industry insiders. Ordinary UK-based investors will be able to sign up to Emerging Crowd and connect directly to a carefully screened selection of growth companies raising money online.
Most of the companies raising funds on Emerging Crowd will already have achieved impressive results, but like many small and medium-sized businesses around the world, they find themselves in a “funding gap” where the banks have failed to provide financing for growth. All of the companies will be carefully vetted by the platform’s experienced investment analysts, and the investments will be backed up by hands-on due diligence and screening to meet the required investor protection standards.
Emerging Crowd will open the door for ordinary investors to choose for themselves from a wide range of privately owned businesses. Investors will have the opportunity to engage directly with these businesses and to ask questions of the management teams. Emerging Crowd will also manage a streamlined investor relations service on the platform so that investors can see their money at work. The platform will encourage investors to use social media to facilitate ongoing relationships with the companies.
Emerging Crowd will look for quality unlisted companies and entrepreneurs with a proven track record, backed by strong management, good reputations and decent growth prospects. The platform will initially focus on familiar sectors such as technology, consumer goods, agribusiness, property, and lifestyle, and the team have already held talks with a number of exciting businesses interested in raising money on the site when it launches later this year.
“Our aim is to build an online community of investors who are passionate about growth opportunities in emerging and frontier markets,” says co-founder Will Tindall. “There are some incredible businesses with huge potential in these markets, but until now the vast majority of investors have had no way to reach these companies, let alone consider taking a stake in them.”
“We think there will be great demand from UK-based investors for these businesses,” says Tindall’s co-founder, Lucien Moolenaar. “Not only do they offer the prospect of rewarding returns over the longer term, but investors will also be supplying new capital that can act as a much-needed catalyst for growth in these countries,” he said. “Our members will have the opportunity to remain engaged with the companies and they will be able to directly see the impact their investments have in these rapidly developing economies.”
Emerging markets such as Brazil, India and South Africa, as well as smaller frontier markets such as Nigeria, Botswana and Vietnam, offer investors a way to benefit from the opportunities found only in developing economies – which are often characterised by higher rates of growth, consumer-driven businesses, young populations and rapid urbanisation and industrialisation.
In order to register to invest on the site, investors will need to meet the eligibility requirements laid down by the Financial Conduct Authority for investment crowdfunding.
