A significant trend in the financial technology sector in recent years has been the growth of companies focused on empowering individuals to actively participate in financial services. Currently, a U.K.-based investing platform is announcing a substantial funding increase following a period of heightened interest spurred by the COVID-19 pandemic.

PrimaryBid, which enables individual investors – those who are not professional traders – to invest in newly issued shares of publicly traded companies, has secured $50 million in new funding. This investment follows the company’s collaboration with major investment banks to facilitate retail investor participation in 41 capital raising initiatives for U.K. public companies and trusts since April 2020.

“The COVID-19 pandemic highlighted the resilience of public markets, with companies efficiently securing recapitalization,” stated Anand Sambasivan, CEO of PrimaryBid. “Our technology has enabled thousands of individual investors to participate on an equal footing with institutional investors, providing a significant source of liquidity and long-term ownership for companies issuing stock. The positive response from company boards and their advisors demonstrates the value of our digital solution for inclusive retail access, combining strong governance with optimal execution.”

PrimaryBid intends to utilize these funds to expand its team, further develop its technology platform, forge additional partnerships, and pursue international expansion.

This Series B funding round differs from those of its platform users, as it is led by prominent strategic investors and venture capital firms. Participants include the London Stock Exchange Group, Draper Esprit, OMERS Ventures, Fidelity International Strategic Ventures, and ABN AMRO Ventures, alongside existing investors Pentech and Outward Ventures.

The LSE Group’s involvement may indicate potential future geographic expansion targets for PrimaryBid, such as the Borsa Italiana exchange in Italy and the Turquoise pan-European equities market, both of which are part of the group’s operations.

“This investment reinforces our collaboration with PrimaryBid and reflects the London Stock Exchange Group’s dedication to increasing retail investor access to public equity markets,” commented Charlie Walker, head of Equity and Fixed Income, Primary Markets at London Stock Exchange plc. “Through PrimaryBid’s innovative approach, retail investors have been able to access capital raises under the same conditions as institutional investors, supporting U.K. public companies by providing additional capital and liquidity. PrimaryBid has become a vital component of the U.K.’s capital raising environment, and we anticipate collaborating with them to further enhance retail investor access to capital markets both within the U.K. and internationally.”

The company is not disclosing its valuation following this round, which comes after a Series A funding of $8.6 million in September 2019. This latest Series B round has been the subject of speculation for several months, with recent reports confirming its completion.

PrimaryBid’s growth coincides with a surge in startups developing investment services focused on specialized opportunities and underserved markets. Rally has shown the potential in providing a platform to invest in (rather than purchase) collectibles, while Yieldstreet has created a platform for investors to access alternative investment classes, such as shipping. Companies like Stash, Revolut, and Robinhood are also expanding trading and investment access to a new generation of consumers.

However, these new entrants targeting smaller investors and niche markets face their own challenges. Revolut has encountered scrutiny regarding executive conduct (though these issues appear to be resolved, and the company continues to raise substantial capital). YieldStreet recently won a lawsuit against a ship recycling company but is also reportedly under investigation regarding certain practices. Furthermore, Robinhood has indefinitely postponed its U.K. launch after initially delaying its expansion plans earlier in the year.

PrimaryBid’s recent success has occurred during a volatile period in public markets and the investment landscape.

Similar to the disruption experienced in other areas of life, the early stages of the pandemic led to a significant slowdown in trading activity. Uncertainty surrounding the economic outlook caused the IPO market to stall and overall trading volume to decrease.

However, activity gradually resumed under new conditions, primarily remote operations. This shift created new opportunities for emerging players.

PrimaryBid has capitalized on this shift by developing a platform that simplifies retail investor participation in new share offerings. Established since 2016, the company has found its niche as companies seek to broaden their investor base.

The startup spearheaded a campaign in April to emphasize the role retail investors can play in revitalizing the stock market. Companies that have utilized the platform for new share issuances since the pandemic began include Compass Group, Ocado, Taylor Wimpey, and Segro.

Individual investors, collectively, represent a significant force in the market. While their individual investments are typically smaller than those of high-net-worth individuals or institutions, their combined activity is substantial. According to 2018 data from the U.K.’s Office of National Statistics, retail investors account for approximately 13.5% of U.K. share capital, rising to around 20% within the FTSE 250 and potentially exceeding 30% in some AIM companies, as noted by PrimaryBid.

While numerous platforms exist for individuals to buy and trade shares, PrimaryBid distinguishes itself by focusing on new share issuances rather than existing shares. Although companies could theoretically allocate shares for sale through PrimaryBid during IPOs, a company spokesperson clarified that “the core innovation lies in enabling retail participation in ‘accelerated’ follow-on offerings (which are approximately five times larger than IPOs in terms of equity issuance), which have historically been inaccessible to retail investors.”

This approach has proven successful with both investors and strategic partners.

Vinoth Jayakumar, partner at Draper Esprit, stated: “Our investment in PrimaryBid aligns with our broader investment strategy of democratizing retail investor access to public markets and modernizing market infrastructure software. We believe both our companies are anticipating the future direction of finance.”

OMERS Ventures, the investment arm of the Canadian pension fund, highlighted its focus on fintech. “In 2020, it became impossible to ignore PrimaryBid’s rise and its success in championing retail investors in the capital markets,” said Tara Reeves, partner at OMERS Ventures. “PrimaryBid’s technology sits at the intersection of key trends in financial services – regulation, digitalization, and democratization – and OMERS Ventures is pleased to support the team’s mission to provide individual investors with equal access to institutions. PrimaryBid is now firmly established within the U.K.’s capital raising ecosystem, and we look forward to assisting the team in achieving its international ambitions.”

“We are pleased to partner with PrimaryBid to promote fairness, inclusivity, and transparency in capital markets,” said Michael Sim, vice president, Fidelity International Strategic Ventures. “Anand and the team have developed unique technology infrastructure that is redefining how issuers access capital markets, seamlessly connecting everyday retail investors with public companies. As the economy recovers from the impact of the coronavirus, it is essential that retail investors have a voice as companies recapitalize and the economic recovery begins.”