The merger of U.K.-based crowdfunding platform Seedrs with rival Crowdcube is creating a $181M (£140M) marketplace that will allow the general public to buy shares in startups.

Why should we care?
The merger of the two crowdfunding platforms is good news for fintech investors. Indeed, popular banking startups Revolut and Monzo raised capital through this method, and an expanded marketplace could also allow for expanded secondary market offerings. But the merger also exposed cracks in the model caused in part by COVID-19. Seedrs reported a net loss of $6M (£4.7M), caused in part by “material uncertainty” which could have put its future in question as an independent entity. Existing shareholders in Crowdcube, which is also a loss-making business, will own 60% of the shares of the combined entity. Despite these risks, Charles Delingpole, CEO of ComplyAdvantage, told CNBC having two parallel exchanges was “suboptimal,” and a single platform will ensure the interests of stakeholders will be best served.