Crowdfunders of Freetrade were forced to wait almost a month for Crowdcube to release their funds after the investment platform was acquired by IG in January.

The delay comes despite the acquisition being completed on 1 April and the funds being received by Crowdcube on 4 April.

FTSE 250 listed online trading platform IG purchased the free share dealing app back in January for £160million.

This is Money understands Crowdcube was provided with Freetrade’s shareholder register two weeks before the transaction was completed and had knowledge of the shareholder register before the deal was announced.

Another payment agent executing shareholder payouts completed the majority of payments within 24 hours of the deal closing.

Snapped up: Online trading platform IG has acquired Freetrade for just £160million

A spokesman for Crowdcube told This is Money: ‘As an FCA-regulated entity, we are required to carry out Anti-Money Laundering checks at the point of payout – even if these checks were completed at the time of the original investment. 

‘These are regulatory obligations that must be fulfilled for every transaction and investor.

‘The payout timings followed our standard process – we take consumer security seriously and aim to ensure the process is as smooth as possible. 

‘This exit was particularly complex due to the number of individual shareholders in Freetrade, which exceeds 22,000.

Freetrade was backed by crowdfunding investors via Crowdcube, with the platform valued at £650million at one point in 2021.

Crowdcube is a crowdfunding platform that allows investors to buy equity in start-up companies as part of fundraising rounds.

The firm faced backlash from its crowdfunders after the deal was announced, as many investors realised losses on their initial stakes. 

In 2023, crowdfunders bought shares at £2.60 each, but some will have received as little as £1.19 per share.

Crowdcube added: ‘As of Friday last week, the majority of people had been paid. 

‘Most of the payments still outstanding are to people who have not provided their bank details. Our team is contacting them regularly to get the required information.’

One crowdfunder, John Haagensen, received his payment of around £15,000 on Friday. 

He said: ‘It’s quite concerning and, frankly, disappointing, especially for the many small investors who continue to support Crowdcube and its mission.

‘Their actions are unfair. I have lost a significant gain on the stock market where I had intended to place my funds.’

Matthew, another Freetrade crowdfunder, was paid just after 3am on Monday. 

Before he received the payment, he told This is Money: ‘Each day that Crowdcube delayed cost me interest.

‘Crowdcube have said that they are completing anti-money laundering checks. I don’t see how this can take so long.’

Matthew planned to use his payout for an overpayment on his mortgage.

‘I’m not sure why this had to be prescheduled rather than them just sending it on Friday,’ he said on Monday.

Even after being paid, Matthew was unhappy. He said: ‘From the sale to IG group, I am expecting to receive £719, so a small profit. 

‘While I am grateful that I am making a profit rather than a loss, if I were able to participate in a vote on this sale, I would have voted no. I am receiving £1.20 per share. 

‘However, I understand that the bigger institutional investors are getting £2.60 per share.’

He added: ‘I honestly feel that us Crowdcube investors have had the raw end of the deal.’

Many investors made a loss on their stakes.

DIY INVESTING PLATFORMS

AJ Bell

AJ Bell

Easy investing and ready-made portfolios

Hargreaves Lansdown

Hargreaves Lansdown

Free fund dealing and investment ideas

interactive investor

interactive investor

Flat-fee investing from £4.99 per month

InvestEngine

InvestEngine

Account and trading fee-free ETF investing

Trading 212

Trading 212

Free share dealing and no account fee

Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.

Compare the best investing account for you