CircleUp Closes $7.5 Million Series A Funding

SAN FRANCISCO, Calif. — CircleUp, the leading 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.

Union Square Ventures, whose portfolio companies include Twitter, Kickstarter, Lending Club, CodeAcademy and Etsy among others, led the round. 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 and David Krane, General Partner at Google Ventures will become a board observer.

“CircleUp helps exceptional consumer and retail brands find the capital they need to grow from our private network of strategic investors,” said Ryan Caldbeck, CEO and co-founder of CircleUp. “The combination of Union Square’s incredible marketplace experience, and Google Ventures’ amazing operating team, will enable us to serve more customers and continue to hire exceptional talent to improve the transparency of private capital markets.”

Since its launch in April of last year, CircleUp has helped consumer companies from Connecticut to California raise more than $10 million. These companies are able to raise more than just capital on the platform; they also find business partners with experience in their industry through CircleUp’s partnerships with world class consumer companies which include Procter & Gamble and General Mills.

“Raising capital for non-tech companies is a huge challenge, and incredibly inefficient,” said Andy Weissman, Managing Partner, Union Square Ventures.  “Early-stage consumer and retail, CircleUp’s focus, is where innovation happens in that industry but the space also suffers from a dearth of capital from traditional resources. CircleUp is transforming early-stage investing and enabling talented entrepreneurs to get the funding they deserve from passionate investors.  We have a long history of helping to develop many successful marketplaces, and CircleUp shares the key characteristics with the very best.  By improving information flow and market transparency, CircleUp helps investors make better decisions and businesses raise capital more efficiently, bringing an entire industry into the 21st century.”

“CircleUp is a classic disruptive innovation, elegantly simplifying the complex process of financing high growth small businesses and thereby expanding the addressable market by bringing capital to great non-tech companies that have historically struggled to get efficient access to it,” said Rose Park Advisors Managing Director Matt Christensen, who also led CircleUp’s Seed Round in 2012.

“In a short time, the team at CircleUp has built a product that, through their data and technology, is a better experience for users than raising money in the offline world could ever be,” said David Krane, General Partner at Google Ventures.  “In addition, CircleUp is seeing classic network effects as more users join.  By developing unique data on the private capital market, CircleUp can make the user experience on both sides even better.”

CircleUp’s success is driven by a team that includes investment professionals with deep background in consumer private equity; exclusive market focus on consumer products and retail and a regulatory approach that lets them help outstanding small businesses today, ahead of the JOBS Act implementation.

About CircleUp

CircleUp is the largest equity-based crowdfunding platform where accredited investors find free access to select private investments, easy tools to identify and diligence companies, and online transaction capability to make investments.  For retail and consumer product entrepreneurs, CircleUp offers an efficient way to access a network of sophisticated investors as well as value added partners.

About Union Square Ventures

Union Square Ventures is one of the leading venture capital firms investing in Internet and Mobile Internet businesses. Located in New York, Union Square Ventures backs passionate, experienced entrepreneurs who are focused on creating highly scalable services and significant value propositions for their end users. Over the past 7 years, Union Square Ventures has been directly involved in the development of 40 companies and, through its principals’ prior firms, has participated in the launch of over 120 companies.

About Google Ventures

Google Ventures provides seed, venture and growth stage funding to the most innovative and promising entrepreneurs across a variety of industries. Founded in 2009, Google Ventures has extensive entrepreneurial experience, deep technical knowledge, and expertise in building high growth, scalable products and companies. Among its 160+ investments are Nest, DocuSign, and Foundation Medicine. Google Ventures is headquartered in Mountain View, Calif., with offices in Boston, New York and Seattle.

About Rose Park

Rose Park Advisors, LLC (RPA), based in Boston, MA, is a specialized investment firm focused on identifying investment opportunities by applying the framework of disruptive innovation. The firm was founded in 2007 by Matt Christensen, and Harvard Business School’s Clayton Christensen, the NY Times bestselling author of The Innovator’s Dilemma, and architect of the framework of disruptive innovation.

Source: Beverages