massolution, the rather colourful, crowdsourcing research and advisory organisation have just published their 2013 report on the industry.
Based on the data collected from “308 active crowdfunding platforms (CFPs) worldwide and undertaking significant further research” the growth rates they found for 2012/2011 were:
- North America – 105%
- Europe – 65%
- Other – nearly 125%
- Total – 81%
They reckon this involved over 1 million campaigns which we calculate on average raised $2,700 or just over £1,750 a time.
Looking forward they see it nearly doubling this year aided, in part, by the US JOBS (Jumpstart Our Business Startups) Act hopefully coming into effect towards the end of the year. It, sort of, deregulates on the financial services front aiding equity investment.
In trying to get some overall perspective of this funding Project Merlin which was an agreement between the UK Government and the major British lending banks had an annual target lending figure of £76 billion to UK small and medium sized businesses. It actually achieved just under £75 billion in 2011. (pdf) Elsewhere Techcircle, from Bank of England data, indicate that bank lending to small and medium sized enterprises in the first 9 months of 2012 was a little under £30 billion. So crowdfunding is small but growing and we think VERY important.
Much of the growth came from the reward (and donation) models operated by the likes of Kickstarter. massolution reckon this increased by 85% to $1.4 billion last year with loans growing to $1.2 billion an increase of 111%. Equity advances at $116 million were tiny and grew by some 30%.
Here in the UK companies like Seedrs do specialise on the equity front and we’re pleased to see they have recently been included in the FinTech 50 The 2013 FinTech 50 -pdf (which also includes another favourite name of ours iZettle.
On the type of campaign or project massolution say:
“Crowdfunding first gained popularity as a way to fund creative, philanthropic, and social endeavors. This popularity prevails, but crowdfunding’s application for entrepreneurial ventures has also gained traction. Driven by models that offer financial return, the ‘Business/Entrepreneurship’ and ‘Energy/Environment’ categories are the next highest performing categories.
- Social Causes are most active, driving close to 30% of all crowdfunding activity
- Business & Entrepreneurship (16.9%), and the two major Art Categories follow: Films & Performing Arts (11.9%) and Music & Recording Arts (7.5%)
- Energy & Environment (5.9%) is the emerging category among the five most active”
“The UK Crowdfunding Association, or UKCFA, was formed in 2012 by twelve crowdfunding businesses.
Our aims are to:
- Promote crowdfunding as a valuable and viable way for UK businesses, projects or ventures to raise funds.
- Be the voice of all crowdfunding businesses in the UK (donations, loans and equity) to the public, press and policymakers.
- Publish a code of practice that is adopted by UK crowdfunding businesses, that protects those participating in crowdfunding.”
We’re impressed and also rather like the logo which seems to be a collection of I’s!
So we hope it’s a case of onwards and upwards on both a global and UK basis.