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IMPORTANT NOTICE
1
Please note that the provision of the information in this presentation does not create and is
not intended to create a relationship between Crowd Valley Inc. and any other person. You
are not and should not regard yourself as being a client or customer of Crowd Valley Inc. and
must not expect Crowd Valley Inc. to have any duties or responsibilities to you, act for you or
your clients, or be responsible for providing protections afforded to customers or yourselves
or be responsible for advising you in any respect. Please consult your own advisers as you
deem necessary.
The information provided herein is solely for informational purposes and should not
be construed as an attempt to solicit new clients or advertise our services for hire. The
information and opinions contained herein have been compiled or arrived at in good faith
from sources believed to be reliable; however, Crowd Valley cannot be held responsible for
its accuracy or completeness.
Crowd Valley does not engage in the offer, sale or transfer of securities. Securities may not
be offered or sold in the United States absent (i) registration under the U.S. Securities Act of
1933, as amended (the Securities Act) or (ii) an available exemption from registration under
the Securities Act. Please consult legal counsel in the appropriate jurisdiction before offering,
selling or buying securities as registration under the Securities Act or similar state legislation
may be required.
EXECUTIVE SUMMARY
2
Being an infrastructure provider for the international crowdfunding market, Crowd Valley
has gained a central position in this space. This gives the company a broad overview on
the sector’s most recent developments, with data collected on over 6,200 individuals and
companies to date. The present report differs from the previous ones, published with data
collected in Q3 and Q4 2013, as it is based on surveying a randomly-selected sample of more
than 100 individuals and companies out of the about 650 that have expressed an interest
in entering the crowdfunding market during the first quarter of 2014. Therefore, the analysis
provides probably the first data-driven insights on how the international crowdfunding sector
is developing in 2014.
The demand for crowdfunding technologies is still mainly based in the USA and it is above
all directed at equity investment models for startups. Nevertheless, during this quarter Crowd
Valley observed a steep increase in the demand for lending models and real estate platforms.
Other regions including Europe and Asia also play a major role in the crowdfunding sector,
representing significant proportions of the total demand for crowdfunding services.
In Q1 2014, the variety of organizations and professionals interested in entering this new
financial market is even more vast. In particular, many actors coming from the traditional
finance sector (i.e. broker dealers, asset managers, investment advisors, private equity funds,
etc) have shown an interest in crowdfunding. This seems to confirm what Crowd Valley
always believed: crowdfunding will bring about a paradigm shift, affecting not only the early
stage finance world, but the entire financial industry.
INTRODUCTION
3
Since the start of 2014, a few important milestones have been achieved by the crowdfunding
industry. In particular, in Europe, the UK and France have released their regulations for
securities crowdfunding, and the Spanish government has announced that it is also working
on regulatory activities. New Zealand has approved regulations for securities crowdfunding,
which are so far some of the most liberal. The European Commission has released a
communication on crowdfunding where it states that it will support the development of this
new financial source, as key for Europe’s long term growth. The UK has also allowed p2p
loans as part of Individual Savings Accounts (ISAs). All of these advances have stimulated
the attention of many actors, who are following closely the situation and are getting ready to
move the first steps into the market.
Crowd Valley has examined in this report a randomly-selected sample of more than 100
observations from across six continents, in order to unveil some of the most interesting trends
in the crowdfunding sector, which are presented in the following sections.
*Disclaimer on Data Collection
It should be taken into account that the sample used to analyze the market trends is
composed only of organizations and professionals who approached Crowd Valley due to
interest in one or more of the company’s services.
INVESTMENT MODELS
4
Being a provider of technologies, services and methodologies for securities professional
looking to get involved in this new financial market, Crowd Valley seeks to understand the
demand for the different investment models.
The company identified four main categories of investment models:
1) Equity-based crowdfunding;
2) Lending, which includes peer-to-peer lending, business loans and other forms of lending;
3) Reward-based crowdfunding;
4) Combined, which refers to those cases where two or more of the aforementioned models
are combined in one platform.
The charts below show the percentages each investment model held on the total demand for
crowdfunding operations during Q4 2013 and Q1 2014. Even though equity remains the most
demanded model, compared to the previous quarter, it has been undergone it has undergone
a decrease (from 82% in Q4 to 60% in Q1). This has been counterbalanced by a consistent
increase in the demand of lending models (from 5% in Q4 to 29% in Q1). The demand for
combined models keeps, instead, growing.
INVESTMENT MODELS
1) Equity
60%
29%5%
2%8% 10% 5%
Q1 2014 Q4 2013
82% 78%
14%
5% 3%
Q3 2013
2) Lending 3) Reward 4) Combined
5
ASSET TYPES
7
Many people still associate crowdfunding with startups, even though during the past two
years, this new fundraising methodology has been used to enable investments in many
other assets than startups alone. Crowd Valley has directly witnessed a rising demand for
crowdfunding portals for other assets such as real estate, cleantech and energy among many
others. In particular the company identified four main categories of assets:
1) Private companies*;
2) Real Estate;
3) Other Real Assets, which include, among others, energy, cleantech and life science;
4) Other, which comprehends all other kinds of assets, that could not fit into the former
categories, for example education and intellectual property (IP).
The charts below represent the total demand for crowdfunding platforms or services divided
by asset type. In Q1 2014 Real Estate has experienced a steep increase: from 19% in Q4
to 30% in Q1. While the “Startups” category holds firmly its position, this quarter two new
categories made it into the chart: Peer-to-Peer (P2P) and Peer-to-Business (P2B), where P2P
refers to individuals supporting other individuals and P2B refers to individuals supporting
businesses or other entities. In fact, given the great increase in the demand of lending
models, as highlighted in the previous section, Crowd Valley decided to look more closely at
it, segmenting the asset types in P2P and P2B loans.
*In this edition Crowd Valley changed the category name from “Startups” to “Private
Companies”, since it observed that the demand is not just for startup portals, but for more
mature businesses platforms too.
1) Private Companeis
43%
44%
30%
19%
9% 6%13%
24%
0% 0%0%
13%
46%
16%
23%
0% 0%
15%
2) Real Estate 3) Other Real Assets
4) P2B 5) P2P 4) Other
ASSET TYPES
8
Q1 2014 Q4 2013 Q3 2013
CLIENT PROFILE
10
In fifteen months of activity, Crowd Valley has been approached by many organizations and
professionals interested in its crowdfunding technologies or related services. The variety in
the potential clients’ profiles is particularly interesting. The company has identified several
types of organizations which were then grouped in the following categories:
1) Broker-Dealer representatives;
2) Angel Network;
3) New Company, which refers to potential clients who are going to create a new company
for the crowdfunding activity;
4) Incubator;
5) University;
6) Already existing Crowdfunding Platform;
7) Private Equity Fund;
8) Other, which includes already established companies that are planning to expand their
operations into crowdfunding.
In the present edition we changed the survey form, including three new categories: Large
Corporation, Investment Advisor and Asset Manager. These types of actors, who now display
an interesting percentage on the total demand, during the past data collection processes
were probably self-declaring “Broker-Dealer” or “Other”. Adding the three abovementioned
categories allowed the company to segment further the demand and frame in a more
accurate way the situation.
1) Broker-Dealer
2) Angel Network
3) New Company
4) Incubator
5) University
6) Crowdfunding Platform
8) Investment Advisor
9) Asset Manager
10) Private Equity Fund
11) Other
7) Large corporation
ORGANIZATION TYPES
11
21%
18%
9%
7%
6%
2%
32%
34%
35%
7%
6%
2%
6%
5%
0%
6%
6%
6%
0%
3%
7%
0%
0%
4%
21%
22%
28%
6%
0%
0%
0%
0%
2%
Q1 2014 Q4 2013 Q3 2013
THE GEOGRAPHY OF CROWDFUNDING PLATFORMS
12
The demand for crowdfunding services is global. In fact, as shown by the following chart, the
organizations and the professionals who approached Crowd Valley since its start are from six
different continents. North America, driven by the US, which is still the main market, improves
its position, with its percentage increasing from 42% in Q4 to 45% in Q1. In Q1 2014 the
demand from Europe went back to the level of Q3 2013 (from 34% to 27%). In particular, the
UK, Italy and France remain the biggest markets in the region.
The new entrant of this quarter is Australia, which is among the top six locations with 4% of
the total demand. Africa and South America maintain more or less the same percentage as
the previous quarters, while Asia experiences a decrease.
United States
United Kingdom
Italy
Australia
Canada
France
Other
TOP 7 LOCATIONS
14
Q1 2014 Q4 2013 Q3 2013
36%
37%
43%
8%
13%
14%
4%
5%
5%
4%
0%
0%
3%
3%
3%
3%
4%
4%
31%
33%
31%
TOP REGIONS
North America
Europe
Asia
Africa
South America
Oceania
15
47%
42%
45%
26%
34%
27%
12%
12%
7%
8%
7%
8%
4%
4%
5%
2%
2%
4%
Q1 2014 Q4 2013 Q3 2013
FOCUS ON THE US (Q1 2014)
16
Even if the demand for Crowd Valley’s crowdfunding services and technologies is global,
the biggest market remains the USA (37% in Q4 2013 and 43% in Q1 2014), where the
crowdfunding sector is more established than elsewhere*. Thus, this section presents
facts and figures focusing only on the US market. It is particularly interesting to notice that,
although “New Company” is the main category, the actors from the traditional finance sector
(i.e. Broker-Dealers, Private Equity Funds, Asset Managers and Investment Advisors) play a
relevant role.
*Massolutions, 2012. Crowdfunding Industry Report.
1) Broker-Dealer
2) New Company
3) Private Equity Funds
4) Investment Advisor
5) Asset Manager
6) Other
ORGANIZATION TYPES IN THE US (Q1 2014)
19
4%
30%
9%
9%
35%
4%
FOCUS ON THE FINANCIAL INDUSTRY
20
Given that in Q1 2014 the demand from traditional financial industry actors represents a
significant part of the total demand for crowdfunding services , Crowd Valley decided to focus
on these types of actors in the present section. The charts below highlight the investment
models and the asset types most required by the financial industry actors. As it was easy to
predict, the demand for reward crowdfunding platforms is null. More interestingly, real estate
is the most requested asset type.
CONCLUSION
23
The present report presents facts and figures obtained analysing the data the company
collected during Q1 2014. The results contained in this report are probably the first data-
driven trends of the international crowdfunding market to be published in 2014. In particular,
since the start of 2014, the organization observed the following new trends:
1) The demand for lending models has increased significantly;
2) Real estate is the asset category where demand has increased the most;
3) New relevant actors from the traditional finance world, such as private equity funds and
asset managers, are looking to enter the crowdfunding ecosystem;
4) USA still remains the main market, but other countries, for example Australia, are
strengthening their position.
5) Traditional finance world actors are especially interested in Real Estate crowdfunding.
By publishing this information Crowd Valley aims to expand the current knowledge about this
new, transparent financial sector and to support regulators and other relevant stakeholders in
the global ecosystem in evaluating the market’s evolution. The company will continue publish
similar reports on a regular basis.
CROWD VALLEY CONTACTS
24
Main Contacts
Report Authors
MARKUS LAMPINEN - CROWD VALLEY CEO [email protected]
(646) 801 4054
PAUL HIGGINS - CROWD VALLEY COO [email protected]
(415) 580 0087
ALESSANDRO RAVANETTI - CROWD VALLEY CMO [email protected]
REX KEMPCKE - ENERGY EXPERT [email protected]
IRENE TORDERA - MARKETING & COMMUNICATIONS COORDINATION [email protected]
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