The Latest Crowdfunding News – 12/9/16

The Latest Crowdfunding News

Hi guys and welcome to our first September crowdfunding news edition. As usual we will be taking a look at the latest goings-on in the world of crowdfunding and today we start our round-up by focusing on Kickstarter who have headed east and launched in Asia to looking at how European alternative finance performed in 2015. Missed our recent round-ups? If so, catch up here.

Kickstarter Launches in Asia

Kickstarter Asia

Kickstarter, one of the most well known crowdfunding sites has launched in both Hong Kong and Singapore respectively, and are their first ever sites in the continent.

Prior to launching in Asia, Kickstarter only operated in Europe, North America, and Australia.

In the past, entrepreneurs from Singapore and Hong Kong had to co-operate with overseas partners if they wanted their ideas published on the site.

With the crowdfunding giant now launching in Hong Kong and Singapore, people can present their projects from a local network as well have their fundraising goals set in Hong Kong/Singapore dollars.

Kickstarter will now compete with local sites such as FringeBacker from Hong Kong as well as the likes of OurCrowd and MoolahSense from Singapore.

Just like other crowdfunding sites, Kickstarter gains a cut from each project that has been pledged by its backers.

Well known Kickstarter projects include the Oculus Rift, which received its first funding via Kickstarter back in 2012 to the Pebble smartwatch.

Image Source : BBC News

Finnish Crowdfunding Act Updated

Finland Crowdfunding

From Asia to now travelling to Scandinavia! A few days ago in Finland, the government updated its crowdfunding act, the new legislation makes it easier to register, for example, until now, equity crowdfunding in the Scandinavian country has required an investment firm license from the Finnish Financial Supervisory Authority (FIN-FSA). However, the license slowed the market entry for new players.

Registration is a considerably more affordable alternative to the investment firm license, and this therefore allows new players into the market.

Investor protection is still at a good level under the new act, despite the fact that the registration process is a lighter form of regulation than a license.

In addition, the new Finnish crowdfunding act does not cover rewards or donations based crowdfunding models. For example, rewards-based models that are used by the likes of Kickstarter fall under consumer protection acts. In contrast, donation based crowdfunding in Finland is legal, anyone who wishes to create a donation based campaign must obtain a special fundraising permit from the police.

To sum it up briefly, Whilst the overall market size of alternative finance in Finland is relatively small, the government and industry bodies are hopeful that a balanced regulatory approach will help boost the up and coming sector.

Native equity crowdfunding company Invesdor’s CEO Lasse Mäkelä recently told Crowdfund Insider that the new Act should increase growth of the Finnish crowdfunding market. He stated :
“On a European level, crowdfunding volume is expected to double this year. We believe that with the new legislation Finland will be able to reach similar numbers.”

Crowdfunding in a tub! A brief insight into Oppo Ice Cream

Oppo Crowdfunding

At The House Crowd we love a good crowdfunding story and thought this was worth a mention (especially if you love ice cream!).
Back in 2015 Oppo Ice Cream at the time, was the most the “most overfunded” offer ever on Seedrs.

The London based company had originally set out to gain £150,000, however, they received triple the specified amount. Earlier this year they was again returned for further funding via Seedrs and smashed their £150,000 in just six hours!

Just like us, they too went on Dragon’s Den, they might not of had much of a slaying as what Frazer experienced, but again just like us being on the show helped propel their product.

Although they came out of the den empty handed, they revealed that they had no intention of taking The Dragon’s money as they had already funded the business by offering shares to their fans which they felt was a much better way of growing their brand. Going on the show for them was about spreading their message to the British public that you can indeed indulge in luxury ice cream… without looking like you have.

As we know, gaining business success is not a walk in the park, and it is something that takes hard work to cultivate. Oppo is also a great example of a small company that leveraged investment crowdfunding to take their business and product to the next level and a tasty investment it turned out to be!

Image source : Crowdfund Insider

FCA Calls for Input on Equity Crowdfunding Regulation

Crowdfunding FCA

Upon releasing the new rules in 2014, the FCA promised a post-implementation review of the crowdfunding market and regulatory framework in 2016 (the “Review”). (Lexology, August 2016)

The financial body has released a ‘Call for input’ which describes the results of their initial market research and sets out a number of questions. The questions are linked to a range of areas and the document contains some hints on the future direction of investment based crowdfunding regulation.

Firstly, one key area that they will be taken into consideration is due diligence. Current regulations do not set a minimum standard of due diligence, the regulations cite concerns relating to financial crime and stresses the importance of protecting the interests of investors. They therefore suggest that minimum standards may be introduced.

Secondly, they’ll take client assessment into consideration. The regulator wants to review the extent to which firms are meeting these requirements and whether clients are sufficiently informed to understand the risks that are involved. In addition, they may consider publishing further advice on how to ensure retail investors meet certain criteria as well as introduce sanctions for companies who do not abide by the rules.

Lastly, the FCA will be looking at disclosure. As Lexology mention in a recent blog article, equity crowdfunding platforms are required to provide potential investors with sufficient information so that they are reasonably able to understand the nature of the product and its risks.The Review will look at whether this high-level rule is sufficient to protect investors.

So what happens now? There are currently no proposals to change the regulatory framework for crowdfunding platforms. However, anyone with an interest in equity (or loan-based) crowdfunding has to submit their response to the FCA before 8 September 2016. The feedback will then be used to inform the FCA’s continuing review of the current market. After the Reviewing process, the financial regulator will consider publishing a new consultation document which will include any proposed rule changes.

 

European Alternative Finance Jumps to €5.4 billion in 2015

Europe Alternative Finance

One news story in particular that we stumbled across this week and everyone in the alternative finance community was talking about was Europe.

A report published by the Cambridge Centre for Alternative Finance (CCAF) entitled “Sustaining Momentum“, looks at the rapid growth of alternative finance across Europe.

In a nutshell, the CCAF reports on the ongoing growth of alternative finance including peer to peer lending, crowdfunding and more. Their findings show that alternative finance jumped 92% year over year to €5.4 billion in 2015.

In addition their research revealed that the UK continues to dominate the continent at €4.4 billion in aggregate funding. France and Germany are second and third with €319 million and €249 million respectively. The Dutch also performed well with €111 million. If you remove the UK out of the picture, European alternative finance increased by 72% year over year going from €594 million in 2014 to €1.019 billion in 2015. While the overall rate of growth slowed, the industry is gaining momentum as new regulations from across the continent take place as well as an array of platforms start to mature.

Interested in the CCAF’s research? If so, read their research embedded below.

CCAF Europe 2016 Sustaining Momentum – Final by CrowdfundInsider on Scribd

 

What Are Your Thoughts?

 

Which of our chosen crowdfunding stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it. 

Register Now For More Information

The Latest Crowdfunding News – 4/7/16

The Latest Crowdfunding News

Hi guys and welcome to our latest crowdfunding news blog post – as usual we will be giving you five stories from the crowdfunding world from the sharing economy is unfazed by Brexit to looking at crowdfunding and the blockchain. Missed our previous crowdfunding news round-up? If so, catch up here.

The Sharing Economy Is Unfazed By Brexit

Brexit

The UK’s sharing economy could boom to 20 times its worth in just 10 years, according to PwC. (City A.M., June, 2016)

The sharing economy sector here in the UK, which includes the likes of Kickstarter, Uber, Spotify, etc. is currently worth around £7bn.

PwC revealed that the sharing economy industry could see a 20-fold increase in growth by 2025.

Economists at the audit firm mentioned that even though the UK has voted to leave the European Union, the sharing economy’s vast expansion should still be on track.

The fundamental drivers of the sharing economy e.g. technological advancements, demographic change and urbanisation will continue over the long term which is great news for start-ups and as the old saying goes, sharing is caring, and the sharing economy is here to stay.

 

Baidu Adds Strict Requirements For Chinese Crowdfunding Platforms

China P2P

From the UK to now moving east to China, Chinese search engine Baidu last month announced it would now require crowdfunding platforms to abide to a strict set of qualifications designed to limit promotion from less reputable sites. Baidu mentioned it would no longer open new accounts for crowdfunding platforms to access their “pay for performance” networks unless they were approved (as mentioned in Crowdfund Insider).

If a platform fails to meet the necessary requirements Baidu have stressed that they will remove full access of their promotional services.

This is really good to see, as regulations in this particular world have been questioned for having a lack of strict rules in place.

Chinese crowdfunding platform Baichouhui’s co-founder Chang Zongfeng mentioned in China News/Crowdfund Insider that It’s good that Baidu has added strict regulations, which will benefit the industry in the long term. In addition, he mentioned that equity crowdfunding should have more stringent requirements for investors as it’s riskier than crowdfunding ordinary projects of lower value.

China is known for its vast amount of crowdfunding platforms, it has been reported that the Asian country has 400 crowdfunding platforms as of Q1 of 2016. Moreover, the volume of crowdfunding in China has been estimated to be around 3 billion yuan (about USD $448 million).

 

Finnish Fintech Pioneer Scores €1.2m To Finance Its Expansion In UK Market

Finland Crowdfunding

Finnish crowdfunding platform Invesdor has been bullish on the UK market despite the uncertainties of the recent Brexit.

The Finnish fintech pioneers closed a fund raise scoring €1.2m to finance its expansion here in the UK.

Invesdor view the UK as the biggest equity crowdfunding market in Europe and say that the fundraise represents an important milestone for their development strategy.

Co-founder and CEO Lasse Mäkelä mentioned in Alfi that : “There are interesting times ahead of us in European equity crowdfunding, and our investors seem to think so, too. Lately, it has seemed like new competitors are popping up everywhere you look.”

Mäkelä senses that the equity crowdfunding market might be moving towards a period of consolidation and believes that a time of mergers and acquisitions for platforms is on the cards.

 

Blockchain & Crowdfunding

blockchain crowdfunding

A new era of crowdfunding has been revealed from using blockchain technology. CCEDK, a crypto exchange from Denmark which has recently rebranded itself. They recently came up with an idea that they could serve its customers better by acting not primarily as an exchange, but as a gateway into the world of the blockchain.

So how does this work exactly? In a nutshell, crowdfunding over the blockchain enables ordinary people to access investment opportunities that they would never otherwise even see. The exciting feature of crowdfunding with cryptocurrency is that it allows the investor to trade their investment immediately on the trading platform OpenLedger. (Forbes, June 2016)

OpenLedger therefore offers third parties to hold an amount on a specific account in a short period of time in order to further the use for funds, providing an administrative and legal hub for investors.

The beauty of using blockchain technology is that it encompasses :- security (no one can freeze, seize, hack or attack your wealth and your identity can never be stolen; secondly, acceptance (you can spend your money instantly and anywhere where major debit cards are accepted); thirdly, privacy (only those you authorise can see your accounts). Lastly, accountability, having signature accounts which allows to share control of accounts with friends, family, and business associates.

As a whole, these form the Decentralised Conglomerate ecosystem, which is basically designed to boost the chances of success for entrepreneurs, whilst at the same time rewards its own stakeholders. Alignment of interests and incentives is imperative for the sharing economy.

Read more on this fascinating concept here.

 

Crowdfunding : One Of The Biggest Fintech Developments Of 2016

Crowdfunding News Crowdfunding Finland

Fintech – a buzzword you hear a lot these days, has seen significant expansion with no signs of slowing down as it continues to transform finance.

Besides the likes of big data, cloud computing, and payment innovation, crowdfunding has as risen to prominence in recent years.

From looking at the Massolution Crowdfunding Industry 2015 Report, the crowdfunding industry is worth $34 billion and could continue to grow to $96 billion by 2020.

Ali Ramadan from Bird & Bird mentioned in a recent Wired article on crowdfunding : “It’s another example of disruptive technology changing the status quo in equity and financial services when it comes to access to capital”, he explains. “One of the main reasons we are seeing business turn to crowdfunding is because of the potential to raise funds quickly and with less stringent terms than those which may be imposed by investors outside of a platform”.

Want to know more about crowdfunding? If so, check out our crowdfunding process page.

 

What Are Your Thoughts?

Which of our chosen crowdfunding stories has interested you the most? We would love to hear from you, feel free to leave us a comment on our Facebook and Google Plus pages. If you prefer to tweet us, tweet @TheHouseCrowd.

In the meantime if you want to know more about Property Crowdfunding do register for our Information Pack which will tell you all about it. 

Register Now For More Information