US-based consumer product crowdfunding company CircleUp has closed a $22m fund which it will use to invest in brands that list themselves on its platform, TechCrunch reported yesterday.
Founded in 2005, CircleUp operates a crowdfunding service that matches entrepreneurs with accredited investors and charges 5% of the money raised. The company’s Consumer Growth Fund will match the funding raised by selected promising startups on its platform in the shape of direct investments.
The fund will be managed by CircleUp managing director Jayson Yuan. The funding came from approximately 50 limited partners including individual executives and several family offices.
Although a regulatory filing in August 2014 suggested CircleUp was aiming to raise $25m for the fund, Yuan told TechCrunch it was oversubscribed from a $20m target, adding: “These investors can now access an asset class they’ve never reached, without needing to pick and choose the companies themselves.”
CircleUp raised the Consumer Growth Fund partly because investors had expressed interest in backing companies on the platform but did not have the scope to sift through the startups themselves, according to chief operating officer Rory Eakin.
The company has also been approached by several undisclosed parties wanting to form another fund that would invest in companies listing on the platform, Eakin said.
In addition to the Consumer Growth Fund, CircleUp has raised $23m across three rounds from Google Ventures, the corporate venturing arm of internet company Google, Canaan Partners, Maveron Ventures, TriplePoint Capital, Rose Park Advisors, Union Square Ventures and assorted angel investors.