London-based sustainable investing platform Clim8 is shutting down and looking for a buyer, but says shareholders will likely lose money in a potential sale. It’s the latest sign that early-stage consumer fintechs are struggling amid the funding drought.
Clim8, which was founded in 2019 and had raised £12m to date, including £2m in media for equity from Channel 4 Ventures, will no longer offer its investing platform to new customers from today onwards, according to a customer message seen by Sifted. The platform will be available to existing customers until May 30, CEO Duncan Grierson said.
"The venture capital environment has completely changed in the last year and it’s extremely difficult for startups to raise new funding. Unfortunately, we have not been able to scale our customer base fast enough to show strong enough traction to venture capital investors,” Grierson said in an email to Sifted.
He said that Clim8 is solvent, has more than enough cash to pay all costs and is looking for a buyer for the company. Grierson said that Clim8 had informed all shareholders, including those from Crowdcube, and that all were likely to lose money.
“We are aiming to maximise the value of the company and have ongoing interest, so it’s not possible to forecast the final outcome but it’s likely that there will be a loss for shareholders.”
The climate fintech rode the wave of the Covid retail investing boom, during which time it raised more than £6.6m from nearly 5,000 investors. It did that through three fundraising campaigns on Crowdcube, giving customers the opportunity to join as users and also shareholders in the company.
Clim8’s institutional investors include Channel 4 Ventures, 7percent Ventures, the British Business Bank, Evergreen Fund and Basil Partners.
The future of Clim8 customers
Existing users of Clim8’s investing platform were today told that their investments and cash on the platform are protected by the company’s custodian WealthKernel, and that from April 1 they would not be charged for using the platform for their investments.
Customers have been given 60 days to decide what to do with their investment portfolio.
Options include transferring their investments to Aviva-owned investment platform Wealthify; transferring their portfolio to another investment platform; or withdrawing their funds in cash. Customers that decide to move to Wealthify will also receive a sign-on bonus, Grierson told Sifted.
Clim8 allowed retail investors to invest in stock portfolios that were filtered according to specific climate-related metrics — such as tonnes of carbon dioxide saved, gigawatts of clean energy generated or litres of water saved.
Crowdcube nominees own 15.8% of the company’s shares, while CEO and founder Duncan Grierson holds a 31.63% stake, according to Beauhurst data.
Clim8 is the latest in a string of recent European consumer fintech closures, including French neobank for teens Vybe, German crypto investing platform Nuri and French restaurant payments fintech Sunday.
Sifted has reached out to other investors for comment.
Amy O’Brien is Sifted’s fintech reporter. She tweets from @Amy_EOBrien and writes our fintech newsletter — you can sign up here.
