CAPITALRISE’S losses more than tripled during 2018 and it needed more cash to support its growth plans prior to its recent Seedrs fundraise, the peer-to-peer property lending platform has revealed.
Its annual accounts for the 12 months to July 2018 shows its losses grew from £523,790 to £1.9m.
CapitalRise had cash reserves of £1.4m, but a note in its accounts warned these are not sufficient to cover all requirements as the business grows.
“The directors have a reasonable expectation that the company will continue in operational existence for the foreseeable future,” it said.
“However, the directors are aware of certain material uncertainties which may cause doubt on the company’s ability to continue as a going concern due to the company’s loss making position for the current and comparative period.”
The note mentions plans for a further equity raise, which has since been completed after the platform attracted £2.27m in a Seedrs crowdfunding campaign last month.
The Seedrs fundraise attracted 723 individual investors from 42 different countries, who together hold 8.57 per cent of equity, valuing the business at £18.25m.
The property investment platform said it will use the funds raised to expand its team and invest in marketing activities, in order to scale up the business and reach its £100m cumulative lending target.
“CapitalRise continues to perform well and grow in line with its business plan, continually delivering strong returns for investors and new financing solutions for its prime residential developer clients,” said Uma Rajah, chief executive of CapitalRise.
“We are an early stage business which is both well funded and has multiple sources of funding available to it to facilitate further growth.
“The success of our Seedrs fund raise was a thorough endorsement of what has been achieved to date as well as the potential of the business going forward and we have every confidence in CapitalRise’s future prospects.”