Crowdfunding sites crashing in Tandem

An odd thing is happening in the world of crowdfunding. Their sites keep crashing, but only when startup mobile-only challenger banks are hanging around.

It started with Mondo, which in February raised £1m from Crowdcube and in the process managed to crash the website. What sort of web server-stopping traffic did the site receive? “The Passion Capital backed mobile bank received unprecedented interest for its crowdfunding campaign from more than 8,500 people,” according to Crowdcube’s blog. Business Insider reported at the time that the “total number of people notified” directly about the round was 44,000 — talk about breaking the internet.

But it hasn’t stopped there. Last week, Tandem followed suit with its own crowdfunding round, this time on Seedrs rather than Crowdcube. And their site broke too! What an exciting turn of events, as Tandem’s email on Friday noted:

What a 24 hours… we opened our crowdfunding to those who pre-registered just yesterday and there’s been a real scramble to get involved. We broke Seedrs’ site, fixed it, broke it, fixed it again.

It’s not good enough to break a crowdfunding site once, you’ve got to fix it and then break it all over again.

But while we’re waiting for the next challenger bank to come along and tell us they not only broke a crowdfunding site’s website, but that a mob of desperate investors burned down its offices too in a bid to get their hands on some shares, let’s take a look at the Tandem offering.

Here it is (click to read):

Those relatively sparse 13 pages are what’s being sent to would-be investors after they’ve requested more information. In fact, it wasn’t available from the outset – the company only started offering it after it had reached its initial £1m target. “Invested! Could you please send your deck [...]?” is a real comment from the messageboards.

The limited information didn’t stop people placing some big, fast bets. Of the first £1m, 85 per cent was raised in just 10 seconds, with the remainder raised in 15 minutes. £700,000 of that came from just three anonymous investors, one of whom accounted for £400,000. Presumably they were just like all the other investors on Seedrs, and made their investment with the same amount of information and access to management as everyone else.

Those big ticket investments helped get the bandwagon rolling nicely. At pixel time, Tandem had raised £2.14m for 3.16 per cent of its equity, at a £65.7m pre-money valuation.

And the Seedrs website seems to be functioning again. What luck.

Update: Seedrs has got in touch via email to say that the problems with its site lasted “about two hours” and was just a “slowdown”. This, says CEO Jeff Lynn, was “materially different” to what happened at Crowdcube, where the Mondo campaign was paused for several days. “In our case, it was a short delay that we addressed effectively, and the campaign has proceeded as hoped,” he says in the emailed statement.

Further updates: A spokesperson for Crowdcube says the company has made “significant improvements” to its systems to avoid issues in future.

A spokesperson for Tandem says its investor deck reflects the need to “protect commercially sensitive information, while ensuring that relevant information was made available”. Two of the top five biggest investors in the crowdfunding round are institutional investors in Tandem, they added, but declined to provide further details.

Related Links:
Investors don’t like your company? Try crowdfunding – FT Alphaville
The crowd has money, but few rights – FT Alphaville
Crowdfeeding: the burrito option – FT Alphaville
Crowdfunded, fruity and English – FT Alphaville
Jumping on the peer-to-peer gravy train – FT Alphaville
Crowdfunding rules arrive: angry face, sad face – FT Alphaville