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CrossFund Limited

Opportunity

Series A funding round raising US$5M with a valuation cap of US$45M

CrossFund is built by Angels for Angels. It is an invitation-only, professional cross-border investing platform that empowers accredited investors to buy shares in early-stage tech companies in emerging markets. The platform provides clear, frictionless, valuable benefits to all key stakeholders: angel investors, startups and incubators/accelerators.

Business Highlights

  • Companies invested in increased their valuation from a range of a minimum of 2.1x to a max of 8.3x in 3-6 months
  • 100% of portfolio companies have raised funds
  • 100% of closed campaigns have reached the minimum
  • 43% of closed campaigns have hit or surpassed the minimum target
  • US$900K monthly funds raised reached
  • +US$670K Max funds raised by a single campaign
  • Communities of investors are brought together through shared data points (industry, network connections, interests) and are cultivated to work together as teams.
  • Start-ups are matched to these complementary communities, thereby increasing their chances of finding investor-startup parity.

Transaction Overview

  •  Series A Round
  • Transaction: US$5M
  • Instrument: SAFE
  • Valuation Cap: US$45M

 Use of Funds

Technical & Product 42%
Marketing & Sales 22%
Finance & Regulatory 15%
General Administrative 7%
Vertical Integration 10%
Others 4%

CrossFund has raised three funding rounds prior to this seed extension, with the founding team only diluting 12% and holding the large majority of the business. The management team knows how to hustle and operate lean, and they have also made breakeven the past 4 months and thus are profitable month-over-month.

  • Angel Round: US$80k @ US$1M valuation (May ’21)
  • Pre-Seed Round: US$100k @ US$5M valuation (June ’21)
  • Seed Round: US$550k @ US$15M valuation (November ’21)

CrossFund Limited Company Presentation

Company Overview

Similar to what AngelList, Republic, and StartEngine have built in the US, CrossFund is building in emerging markets by bringing accredited investors opportunities to invest across Asia, Africa, and the Middle East. The company’s main operating hubs are in Vietnam (Ho Chi Minh City) and Dubai (UAE), and we are investing in their global topco in the Cayman Islands.

In emerging markets, there are no major investing platforms or crowdfunding platforms. There are small domestic players in markets like South Korea, Japan, and Hong Kong, but there is no cross-border platform that aggregates investors and startups across the entire region. Beginning in Southeast Asia with footholds in Vietnam, Singapore, Pakistan, and India, CrossFund aims to continue penetrating Asia while also growing across Africa (Nigeria, Kenya, Egypt) and the Middle East (UAE, Saudi Arabia). Just by nature of its geography, the company has a distinct competitive advantage and is operating in an untapped market.

CrossFund has been growing fast since its launch through Q1 of this year. There was US$500k invested into startups through its platform in January, US$630k in February, US$900k in March, and US$1.1M in April. In total, they have raised US$4.7M for startups since inception last May and forecast raising US$18M by the end of 2022, pacing them to grow 10x faster than Republic did in their first year. They already have 1k+ investors on their platform and 5.5k+ investors from 44 countries in their community through April.

CrossFund only offers investment opportunities into pre-vetted or referred startups on its platform. This means there is no application process for founders, and startups cannot just list themselves on the platform as they do on retail investing apps. The startups are sourced through the founders’ investor networks in emerging markets and through deal flow partners such as accelerators (SOSV, YC, Techstars…), VCs (Surge, Yolo, GFC…), and family offices. CrossFund sees about ~300 startups per month and only invests in 4 per month, giving the platform a selection rate of 1-2%. By the end of 2022, they forecast investing in 10 startups per month through the platform.

The investment opportunities that CrossFund offers on its platform typically must meet the following criteria:

  • Pre-series A, valuation between $10-25M or less
  • Based or expanding into emerging markets (Asia, Africa, or the Middle East)
  • The product is live and generating revenue
  • Sector agnostic, both B2B and B2C startups are considered
  • Replicating a business model or providing a service that has proven successful in developed markets (USA, Europe, or China)

CrossFund’s business model charges no carry, no management fees, and no SPV costs to investors. This means that 100% of an investor’s investment goes directly towards startup equity! The platform earns a service fee of 10% which is paid by startups based on the total amount they raise through the platform. CrossFund then sends 2% of that fee back into the startups as equity, giving the company and its shareholders an investment portfolio of their own. This means that investors who invest in CrossFund also have indirect ownership of all the startups that will ever raise through their platform.

ADDITIONAL REVENUE STREAMS

CrossFund plans to generate additional revenue streams beginning in Q3 of 2022, primarily through a secondary exchange and by providing SPV services to syndicates.

  • Secondary Exchange: CrossFund is aiming to build a secondary market where investors can buy and sell shares between each other (peer-to-peer), with CrossFund taking a 1-2% commission on each transaction. This market will give liquidity to investors by allowing them to sell all or part of their startup shares in subsequent funding rounds, without needing to wait for acquisition or IPO. At first, this market will be on the blockchain and only accessible to CrossFund investors and startups, but can eventually be decentralized and made accessible to all investors and startups.
  • SPV Services: CrossFund is aiming to outsource its SPVs and back-office services to syndicates looking to raise funds for startups. These SPVs will be offered in Singapore and Hong Kong at a discounted price to players in the United States (Assure, Allocations…) and UK (Vauban), as non-US SPVs are much more affordable for syndicates and more convenient for non-American investors.

EXIT OPPORTUNITY

CrossFund is the leading private investing platform in emerging markets. In the past 8 months, the three largest investing platforms in the United States have all raised at unicorn valuations: AngelList Ventures (US$4B, Tiger Global), StartEngine (US$1.3B, Agoura Investment), and Republic (US$1.05B, Valor Equity). The largest platform outside the US, in Israel, also raised at a unicorn valuation last fall: OurCrowd ($1B, SoftBank).

Given these comparables, CrossFund anticipates having significant growth potential to (1) become a unicorn in the coming 2-3 years and position itself for IPO, or 2) be acquired by the larger players in the US looking to expand their influence internationally.

 

PORTFOLIO

Pre-vetted

First Screening

Due Diligence

Community Feedback

Announcements

July 2022
Duhqa raises $2m in seed round funding

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Team

Ben Cardarelli

Founder & CEO

Davide Cali

Founder & COO

Andrew Hoban

Head of Product

Mic Tham

Head of Investment

Nik Porwal

Head of Compliance

Katherine Lui

Head of Finance

Raffaele Ragini

Head of Marketing

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