After two successful rounds on Seedrs, the MacRebur team decided to do another round on Seedrs to fuel their growth and expand internationally. They set out to raise £1.2M, but smashed their target by more than 200%, raising over £2.8M from +2,600 investors.
We sat down with Toby McCartney, co-founder and managing director at MacRebur, to discuss their experience with crowdfunding and the benefits of follow on crowdfunding rounds.
Tell us about how MacRebur started? Where has your vision taken you so far?
The MacRebur story all started back in 2015, with my little girl’s school assembly project. The assembly was based around what lives in our oceans and my little girl started her projects around the plastics in our oceans. She became a real eco warrior and asked me to not only reduce my plastic consumption, but to collect all the plastics in our household and create something with them. I realised then just how hard it is to stop consuming plastic… Everything that we buy is made of it or wrapped in it. But I realised something else as well – we live in Scotland, home to some of the worst roads in the UK. So, I set out to solve the pothole problem, inspired by something I’d seen in India, where they take plastics and rubbish, put it into potholes and set a light to it so it would all melt down and form a seal in the whole. That’s how MacRebur started.
It took me 18 months in my garage of cutting up bits of plastics and sending it down to a lab with 844 failed test results. By the 845th test, I finally got a result and realised I had created a product between plastics and oil that could substitute the traditional road material.
Together with two friends (one in the construction business and the other as the head of the waste department), we entered the competition with Sir Richard Brandson, the Virgin Media Business Voom 2016 and won. We met many great people along the way who were big fans of crowdfunding. James Watt, the founder of Brewdog, shared his experience with us as did Rob Love, founder of Crowdfunder. That’s how we ended up with Seedrs. I guess we’ve funded the round so quickly, because of the publicity that we received from the competition. We were only going out for £590,000, but ended up getting £1.4M in the round in just 10 days.
What were your goals that you wanted to achieve from this crowdfunding round?
We initially self-funded the company with the 3 directors, but quickly burnt through the cash due to testing and trials. We had done our research into the traditional ways of funding – banks, loans, credit cards – but we didn’t want to take those options. We had considered the VC route, but the match didn’t feel quite right. So for us, the crowd was the way to go. At the time of our first round, we were lucky with the momentum. David Attenborough had just released the blue planet, talking about plastic waste in our oceans, so we rode that wave in our first crowdfunding round as it made us current and relevant. We were also able to leverage the community we built from the Virgin competition who had supported us up to that point.
Talk us through your 3 rounds. What was it like to run a campaign the first time and how different were the 2nd and 3rd time?
Our first crowdfunding round was built on projection.We didn’t have any roads down in the UK yet, so we could only tell and sell what we hoped would happen. The seller’s round as I like to call it.
The second round was the most challenging. Although we were successful, we also had a few people complaining that we didn’t exactly execute on everything that we had promised in the first round. But eventually, those promises came into effect, and people started trusting us.
By the third round, we had more systems and processes in place for the round itself, we had an established business with figures demonstrating growth, and we had our support group, with most being invested from the first round. They’d seen the progress and that gave us enough time to communicate effectively with them, month by month to keep them on board and keep them part of the story. For this round I had also prepared a lot of investors questions. It takes a lot of time to answer all the questions on the forum, but this time I felt more confident and prepared.
Can you give us one highlight per campaign?
The speed into the round was amazing.We were afraid that we wouldn’t fund in the 60 days (back then) but we did it in 10!
It seemed for a while that the investors weren’t receiving the answers that they were hoping for, and we were concerned about investors pulling out. We were relieved to finally reach our goal.
Just before we closed off the round, we had investors thanking us for our hard work and answering all the questions. I had never seen that on any other campaign so that was a personal highlight for me.
In general, for every round, we closed off within half of the time, with just the amount of capital that we needed.
What investor feedback did you receive, and how has it helped you navigate your crowdfunding campaign and growth?
I don’t feel like we used the investor feedback during the first and second round, but it’s our plan to leverage it moving forward. We are now more comfortable to start conversations with our investors, share our exit strategy and ask for advice. We know it’s also in their best interest as early backers to help us succeed.
In our third round, we saw many more big-ticket single investments ranging from £100k to £200k. All investors, ticket-size aside, bring a certain amount of marketing support, but I believe that these bigger ticket investors will help us to reach our exit in 3-4 years time.
How would you describe your overall experience working with Seedrs? Did the Portfolio team help you prepare for your follow-on rounds?
Seedrs is a group of relatively young people innovating in the finance space. It’s not like speaking to a bank manager, it feels like a cooler, less old school way of raising capital. The Seedrs team understands the pains and gains of young businesses. Everyone that we’ve been involved with has been innovative and excited to support us. The advice has been brilliant every single time.
We found Seedrs’ marketing support particularly valuable in our third raise. We didn’t do this for the first and second crowdfund, but it turned out to be so crucial in making this round as good as it was. We would definitely choose that again for any future rounds.
Talking about dilution, did you get a lot of pushback from investors about diluting their shares because of the 3 rounds?
We didn’t, but we have to find a balance between the dilution and the capital that will help grow 5 times what we expected. You can propose that plan to your investor base and the dilution will always be a secondary concern.
What have the proceeds from your Seedrs rounds helped you achieve so far, and what plans do you have in the pipeline for the upcoming months?
A Seedrs crowdfunding round takes about 3-4 months to run so for us it was really important to ensure that we fulfill part of our initial plan with the money that we’ve raised. We put our models into action so that the money was spent wisely and quickly. We are determined to meet the exit strategy that we’ve promised, so there’s no time like the present.
After our first round, we were still working from a garage, and we used the proceeds to buy offices, a warehouse and machinery. That really set us up as a credible business. As we completed the other rounds, we started looking at the curve and how we can use the money to get further up on that curve. We’re now looking at hiring more staff and expanding internationally.
Aside from the funds, what have been the long term benefits of your crowdfunding campaigns and why did you decide to do 2 follow-on rounds after your first campaign?
The 5,000 people that have invested in MacRebur are all helping us to market the business. They share us on social media and market our business personally, which results in more sales. So it’s not just about the money that you get in, it’s the value of the marketing support you gain from your investors.
MacRebur is the only type of business that does what we do, so there’s no benchmark as to whether we’re doing a good job. However, when we talk to our investor base, they can actually tell us whether what we’re doing is working and how to improve. Our investors make us sharper with the questions that they ask, the advice they give, and the ideas they have that we hadn’t thought of. It’s like having a third eye looking in.
Were these benefits the reason why you decide to do 2 follow on rounds or was that purely for the funding aspect?
As our business has grown, we’ve needed more money. I think our aspirations have gone from being a small business to having a fully fledged exit strategy, so we needed more capital to get to that point. We also kept choosing crowdfunding because our exit is expected to be a trade sale and we haven’t found that trader yet. We didn’t want to go down a VC route and give away a large proportion of our business as we wanted to keep hold of as much equity (60%) as possible between the 3 directors to help us exit.
What’s the long term vision for your community?
I suppose it’s all about the legacy we’re trying to create. We want to be seen as the help that ends the plastic epidemic, or at least part of it. We can’t do it alone, but we have the help of all our investors who are also driven to eliminate waste plastics and back green companies. Hopefully at the end of all this, MacRebur is known for being an eco-innovator, not just a roads company, and every investor is part of that cause.
To find out more about MacRebur, visit their business page.