Brompton Bikes is to turn its back on venture capital and private equity funding, opting instead for crowdfunding in a bid to further build on its bike hire ambitions.
Speaking to the Financial Times, chief exec Will Butler-Adams suggested that private equity backers are too short-termist in their demands.
For this reason, Brompton will now turn to Envestors for the first £1 million required and Crowdcube for the remaining £1.5 million.
The funding is required to further deliver on Brompton’s inner-city bike hire ambitions. At present this arm of the business is recording, yet narrowing steadily, its losses on its initial 20 city investment, reportedly slimming from £500,000 a year lost to £130,000 last year.
Should the crowdfunding pitch go down well then Brompton’s plan is to grow into Europe with a further funding round to the value of £25 million.
Confessing to receiving a number of private equity approaches every year, Butler-Adams told the paper that he would only allow significant investment if the Brompton business model were to see a sudden and radical change.
Catch the FT article in full here.