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STARTUP

Spain launches world’s first government-run crowdfunding platform

Authorities in Biscay in Spain's Basque Country will allow its citizens to invest in state handpicked start-ups, the first local government to do so on the planet.

Published: 15 March 2018 09:35 CET
Spain launches world’s first government-run crowdfunding platform
Photo: Startup/Depositphotos
If you’re thinking of setting up a business in the Basque Country or looking for an alternative way to invest, this brand-new take on crowdfunding may be of interest to you.
 
From March 15th 2018, the government of Biscay (Vizcaya in Spanish or Bizkaia in Basque) is calling on any business-savvy members of the public to invest in Basque start-ups they’ve cherry-picked for their potential for success. 
 
Crowdfunding Bizkaia's founders say the advantage of having local government involved is its capacity to boost investor confidence by mitigating risk. 
 
“In general the illiquidity of equity-based crowdfunding creates financial uncertainty,” their press release reads. 
 
“You don’t see a payout until the company exits – that’s assuming the business doesn’t fail, and you also can't offload shares into a secondary market if you decide it’s a poor investment.“ 
 
Biscay’s government platform puts applying companies to the test with a rigorous financial and economic appraisal, which is meant to take the pressure off the shoulders of investors as they don’t’ have to check the viability and risk of the startup themselves.
 
 
According to Bizkaia Crowdfunding, there are also many perks for the startups applying, not just access to ‘seed money’. 
 
Chosen startups can request to have the government match the level of funding raised by the public, with a limit of €30,000.
 
Each venture will also receive a free year of business mentoring and support to help the businesses reach their growth targets, as opposed to mainstream crowdfunding platforms like Kickstart or Crowdcube who “pull out” once the money has been raised.
 
Working as partners, the company and government jointly decide fundraising aims. 
 
Additionally, the government-run platform provides other financing streams and business support avenues when the year finishes.
 
Crowdfunding Bizkaia also states that their commission fee is substantially lower than that of private crowdfunding platforms, 1 percent compared to an average 3 or 4 percent higher.
  
So what are the prerequisites for applicants?
 
All companies must be robust, in strong financial health– including four to five pre-existing shareholders– and occupy a unique market space.
 
Start-ups seeking investment on the platform must be headquartered in Biscay with companies from outside the region encouraged to establish their headquarters in Biscay to qualify for the platform.
 
Crowdfunding Bizkaia’s website will launch with four start –ups, another four in line, and the aim of managing between ten to twelve projects a year, which will be selected from around thirty that are expected to apply to join the platform.
 

MALMÖ

Is Malmö’s pogo stick e-mobility startup for real?

Cangaroo, the Malmö-based startup offering to hire pogo sticks through an app won viral coverage. But is it for real? The Local tracked down Adam Mikkelsen, founder of ODD Company, the "super-creative PR company" behind it, to find out.

Published: 26 June 2019 16:17 CEST
Is Malmö's pogo stick e-mobility startup for real?
Adam Mikkelsen (centre) with the rest of the Cangaroo team. Photo: ODD Company
The Malmö company's innovative addition to the last mile e-mobility sector has been covered by the The Wall Street Journal, Forbes, Huffpost, CNN, and our sister site The Local France, although from the start sceptical voices were raised. 
 
At the height of its viral coverage in May, the company put out a public statement insisting that the company was not a PR stunt.  
 
“With a lot of initial questions along the line of 'is this for real?', we feel the need to underline that Cangaroo is 100% real,” it said in a statement.  
 
But when The Local spoke to him, Mikkelsen admitted that the initial idea had been to make a stir and get a point across. 
 
“It definitely started as some statement, I wouldn't say against, but in the micro mobility movement,” he said. “And a lot of things we do tend to divide the crowd, with 50 percent saying 'is this real?' and the other half wanting to try them out.” 
 
He said that articles talking about the company dumping tens of thousands pogo sticks in cities across the world as e-scooter companies like Lime and Voi have done, are “delusional”. 
 
“With the Cangaroo, I would definitely see it as a success even if we only managed to put out ten pogo sticks in two cities and then we're out of money,” he admitted. 
 
“But we're not about making a statement by just making something up and not doing it, because then we might as well announce that we're doing flying cars or whatever.” 
 
Adam Mikkelsen (right) with a prototype Cangaroo. Photo: ODD company
 
If the handful of pogo sticks the company hopes to release in Malmö in August are well received (and that is quite a big 'if'), Mikkelsen claimed he and the PR bureau aim to stick with the company. 
 
“If everything is running smoothly and the demand and feedback is great, then we would absolutely continue to scale and expand like any startup would do,” he said. 
 
The company, like its 2017 'Pause Pod' relaxation tent, have been developed by the company's ODD lab, which it uses for experimental projects that are not for real clients. 
 
The Pause Pod relaxation tent the company released in 2017 raised 960,244 Swedish kronor on Kickstarter and then sold about 2,500 tents before ODD wound the company up. But it got massive media coverage. 
 
In the past the company has created similar viral 'product ideas' for commercial clients, such as the Somersby grass slippers for Carlsberg, or the Hug Trench for the fashion brand Monki. 
 
 
Mikkelsen said that even though both the Pause Pod and Cangaroo were part of the company's ODD Lab, and not for any particular client, the company aimed to use the buzz around Cangaroo to raise the profile of gay, lesbian and transgender charities. 
 
“We are currently in talks with different Pride festivals, so we aims to use the product in the public space to allow people to take stand on something,” he said. “During Pride week our ambition is that if you jump on a pogo stick, you jump for free love.” 
 
“So we're not going to use it as a campaign for a commercial company,” he concluded. “But if you look at charity organizations, they sometimes struggle to get their message out.”
 
So it it for real? It depends what 'real' means. 
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