Perkbox is changing the face of employee benefits in a world where finding and retaining the best talent is a constant challenge for companies – especially SMEs who can’t afford to necessarily offer the perks big corporations can. Investors invested in Perkbox alongside leading venture capital firm Draper Esprit – on the same terms – via Seedrs.
An organisation such as Perkbox isn’t typically what you’d expect on an equity crowdfunding platform. As a B2B company, you might assume they don’t have the same obvious appeal as a lot of B2C companies. But with a sound business idea, solid traction and the right approach to engaging with their existing network Perkbox raised £4,353,745 from 361 investors – making them the largest raise on Seedrs to date. When they first approached us, Perkbox was already negotiating with venture capital firm Draper Esprit. Gautam Sahgal, Chief Operating Officer of Perkbox shared with us their experiences of raising equity finance online alongside institutional capital.
Why did Perkbox decide to raise investment with the crowds even with institutional capital lined up?
Gautam Sahgal, Chief Operating Officer of Perkbox: “The reason we chose equity crowdfunding even though we had institutional investment is that crowdfunding allowed us to reach out to the community, as well as gave us a great brand association with Seedrs and that was really important to us. And lastly, there was a lot of PR and press.
[Raising VC at the same time] was pretty difficult actually, a long process but the fact that we were using Seedrs actually made it easier because the nominee structure was easier to explain and understand. And the rights that shareholders have as a result of that are actually more equivalent to what all other shareholders have too. So talking to a VC at that point actually became quite a lot easier.”
Why did Perkbox decide to raise investment?
“We’re growing really fast. We’re a SaaS business which means we invest a considerable amount every month into marketing and sales to grow the top line bookings. We understood that we had two choices. We could accept the speed at which we’re growing and live within our means – because we’ve never done a very large fundraise before – or we could accelerate the whole process and try to grow a lot more quickly than we otherwise could have done. We chose the latter option and as a result, we needed to do a fundraise.
Funding is always difficult because you never quite know how the pieces are going to fit together. We were unusual because we had grown so much without any external investment, so we weren’t particularly well-known to the VC community and we weren’t looking for a massive fundraise which is typically what VCs would prefer. So going to the crowd allowed us on the one hand to democratise the process, which is what we’re about, and on the other hand, it allowed us to meet the goals of not raising an amount that we couldn’t actually deploy with any benefit.”
How has raising investment through equity crowdfunding benefitted Perkbox since funding?
“[Since raising investment] we’ve actually added a considerable amount of management talent. We’ve expanded the employee base from something like 90 people after this finance round to about 137 today. We’ve added talent in all groups from marketing and sales up to development and product. So we’re able to considerably accelerate plans that we already had.”
Why did Perkbox decide to use Seedrs?
“First of all, we liked the team a lot. We thought there was a natural affinity between us and Seedrs. Both companies stand for democratisation, for us, it’s the democratisation of benefits. We bring the power of what large companies have to SMEs and Seedrs does the same in the investment arena. Secondly, we thought Seedrs was more structurally sound than other alternatives we had seen, in particular, the nominee structure which really allowed us to raise money from VCs as well. Alternatively, it would have been quite different.”
How did Perkbox find their experience raising with Seedrs?
“Our experience with Seedrs was brilliant. We got a ton of press. We raised more than we anticipated. We lived up to the standard of being a company that stands for democratisation. And our name is considerably more well known today than it was before. So that was a success on all measures.
Certainly, we’re a lot more well known in our target area today than we were beforehand. It’s hard to put a number on that, but the impact that’s had on the conversations that we’ve had with prospects after December has pretty clearly changed. We’re now more well-known and considered to be much larger than the perception was beforehand.
[We’d recommend Seedrs] if you want to raise financing but also strengthen the level of community you have with your customers or users. We also think [Seedrs is] structurally very, very sound because it allows you as a shareholder to actually have a structure that’s much more shareholder-friendly for every other investor that comes in as well.”