New York – May 7, 2013 – Google Ventures as well as other high profile venture capitalists are showing their faith in crowdfunding’s future by fundingplatforms such as CircleUp and Lending Club. Today, CircleUp, an equity-based crowdfunding platform, announced today it has closed a $7.5 million Series A financing, the largest raise for an equity-based crowdfunding site. With the new funding, CircleUp plans to hire engineers and designers to build out the technology to serve more independent investors and small businesses. Last week, Google Ventures invested $125 Million into crowdfunding site Lending Club.
Union Square Ventures led the investment round in CircleUp. Google Ventures and existing seed round investors Rose Park Advisors, a firm led by disruptive technology innovator Clayton Christensen, Maveron, and financial services veteran David Topper, also participated in the Series A round. Andy Weissman, Managing Partner at Union Square Ventures will join CircleUp’s Board of Directors. In a statement posted on Union Venture Squares’ site, Mr. Weissman believes that the technology-enabled marketplace for funding has created an entirely new system of allocating capital and expertise. “This kind of peer-funding network has the potential to expand the types of investors and entrepreneurs that can participate in private investing,” said Mr. Weissman.
Mr. Weisman sees crowdfunding as a viable fundraising strategy for consumer products. “One of the most vibrant verticals is consumer products, with over 50,000 new consumer and retail companies started every year. These businesses are drivers of economic growth,” Mr. Weissman said. “CircleUp has created an equity crowdfunding marketplace, enabling investors to own pieces of small but fast-growing consumer and retail businesses.”
On May 2, 2013, Lending Club announced that Google ventures invested $125 Million into the crowdfunding personal loan site. ”Lending Club is using the Internet to reshape the financial system and profoundly transform the way people think of credit and investment,” said Google’s David Lawee. “We are excited to be a part of it.” According to press reports, investors are valuing Lending club at $1.55 Billion.