Leading crowdfunder leverages Rackspace Managed Cloud to keep growing

Taking a cue from the popular TV show Dragon’s Den (similar to Shark Tank), where aspiring entrepreneurs pitch their products to potential investors, Westlake asked, “If you can put an idea in front of five people, why not put it in front of 5,000?”

This became the model for Crowdcube, an equity crowdfunding platform launched in 2011, which offers users the opportunity to invest in hundreds of businesses in the UK.

Less than two years after its inception, Crowdcube was catching on, even spurring some financial pundits to question whether this new method would one day render traditional banking obsolete.

As Crowdcube continued to grow, it also became apparent that it was limited by in-house IT operations, and in particular, the single server that was powering it.

Performance issues started becoming more common and as traffic increased, the site would slow down.

For a company that can raise thousands of pounds in a minute, even small periods of downtime meant lost revenue.

“We knew we needed to expand our DevOps capabilities,” said David Ives, head of technology at Crowdcube. “But we didn’t want to incur the cost employing a DevOps Engineer.”

Instead, he said, they preferred to use their existing in-house engineering talent for building the application and growing the business.

This was one of the considerations that led Ives to look for a cloud-based solution, and he and a colleague attended Cloud Expo Europe, where they initially considered an infrastructure-only provider to handle their needs.

“But then we met a couple of people from Rackspace,” Ives said, “And for me, the service component they were offering on top of the infrastructure was what got my attention.”

Crowdcube ended up migrating to a Rackspace Managed Cloud environment, and almost immediately, Ives said he saw a difference.

The setup they migrated to — a standard Rackspace DevOps offering — includes key components that have allowed Crowdcube to scale with traffic spikes and rely on 24x7x365 live support when inevitable hiccups arise.

“It was exactly what we needed,” Ives said. “Suddenly we had the equivalent of 10-15 DevOps engineers at our disposal, which I wouldn’t have been able to do internally.”

This allowed the engineers Ives did have on staff to focus on Crowdcube’s growth, which was showing no signs of letting up.

In 2014, Crowdcube introduced a new offering called mini-bonds, which allow more established companies to “borrow” funds from investors and pay a fixed interest rate at regular periods over a specified timeframe. This product has opened the power of crowdfunding to a whole new sector of businesses.

Today, the company is considered the world’s leading equity crowdfunding platform, and is ready to start offering assistance with IPOs, which will essentially complete the coverage it provides across the entire life of a venture — from raising seed capital all the way to going public.

However, Ives points out how difficult keeping up with this growth would have been, had Rackspace not been supporting them on the back-end.

“We currently offer investment opportunity in 270 businesses, we’re about to hit £100 million in funds raised and we have just under 200,000 registered users,” he said.

“There is no way we could have handled that sheer volume on the setup we had prior to working with Rackspace,” he added.

Crowdcube is hosted on OpenStack, the public cloud platform Rackspace developed together with NASA.

Infrastructure automation is done with Chef, which allows Crowdcube to scale up and down automatically, based on real-time demand.

New Relic is also used to monitor application performance, and automatically feeds into the Rackspace ticketing system, should the need arise.

And if troubleshooting escalates to the level of needing live support, chat client Slack is used to communicate with dedicated Rackspace staff at any time, day or night.

Ives said that he was sold by the entire combination of services, but that the 24-hour support was really the icing on the cake.

“I need to know I have someone on the other line, who can support me no matter what,” he said. “It’s not like having someone in-house, who might be unavailable or on holiday.”

And as much as Rackspace has assisted Crowdcube, the reverse has also been true.

“Crowdcube is playing a key role in the development of innovative business models and is harnessing the Internet’s power to drive crowdsourcing. We are excited to be able to support their commercial proposition through the work of our managed cloud specialists, so the in-house team can concentrate on its growth plans knowing that it has the infrastructure in place to support them,” said Darren Norfolk, MD Rackspace UK.

“Their requests for new features often end up being requested by other customers down the line. So they are actively assisting us in making the customer experience better.”

For their part, Crowdcube plans on continuing to leverage Rackspace as their market grows alongside them.

Not only has the platform thrust crowdfunding into the spotlight, founders Westlake and Lang have taken an active role in assisting with legislation being drafted for the nascent industry.

And when it’s all said and done, the duo look back and know that they accomplished their goal, which began as a simple desire to fill a gap in the marketplace.

“They saw a need and they met it,” Ives said. “And just stay tuned, there’s a lot more to come.”

Crowdcube is currently in the process of redesigning its entire application from the ground up. It’s also expanding the engineering team and setting up for the next chapter in their businesses’ story — which will all be supported by Rackspace Managed Cloud.

“We have many new products in the pipeline,” Ives said. “And suffice to say, the extensibility and scalability that we’ve been able to attain with the platform are major factors in my confidence that we can provide the business with the future growth we have planned.

Ives said that Crowdcube also has a high profile client due to launch in September, which will extend the business’ reach, across the Atlantic Ocean.

“It’s going to be a real coup for Crowdcube.” Ives said.