The Latest Crowdfunding News
Hi guys and welcome to another crowdfunding news edition, as usual, we will be travelling around the UK and around the globe in order to give you a snapshot of the latest goings-on in the crowdfunding world. Today we start our round-up and focus on The FCA and Cambridge University partnership, both have teamed up to review the current state of alternative finance, to ending our round-up in China. Missed our previous blog round-ups? If so, catch up here.
FCA & Cambridge University Team Up to Review UK Alternative Finance
The Financial Conduct Authority (The FCA) and the Cambridge Centre for Alternative Finance (CCAF) have teamed up to assist in the review of the UK alternative finance industry. The joint project will inform the FCA’s ongoing post-implementation review of crowdfunding regulation which is currently in process.
There’s a consensus that the UK is a global leader when it comes to alternative finance regulation.
Moreover, The Cambridge Centre for Alternative Finance is a global leader in research on disruptive finance. The pair will be working on a program of research that will identify any changes in the nature of the industry,clients’ expectations, plus its overall place in the financial services landscape.
The unique partnership will be primarily looking at what the crowdfunding investor population really looks like and how it is evolving, another research area that they will be investigating is how investors on the platforms understand the risks involved, as well as how they use the information provided to them by fundraisers. In addition, their research will look at the types of investments crowdfunding platforms are competing with for investors’ money, plus how these platforms and investors share the burden of due diligence and whether an expectation gap exists between the two.
Santander UK Strikes a Partnership With an Alternative Finance Company
Santander UK has struck a partnership with an alternative finance company to fund social enterprises in a deal that marks the first tie-up between a large British high-street bank and a crowdfunding site. (FT.com,October 2016)
The banking giant is joining forces with Crowdfunder to provide £200,000 to community projects, charities and enterprises that are focused on social change across the country.
The bank will donate half the funding target of a project once it raises 50 per cent from the public online.
This headline has gained attention because the partnership further closes the gap between mainstream and alternative finance, it also paves the way for closer collaboration between a well known high-street lender and the crowdfunding sector.
Back 2014, Santander UK paired up with Funding Circle referred small business customers looking for loans to the P2P lender when the bank was unable to serve them.
However, the deal with Crowdfunder is different because equity crowdfunding involves raising money from the public who each gain a share in the company.
Managing director of Santander Business Banking, Sue Douthwaite, told the FT : “Our purpose is to help people and businesses prosper and we recognise the important role social enterprises and charities play in helping communities to thrive.
“With the power of the crowd, our £200,000 Changemaker Fund will help bring great ideas to life and enable social enterprises and community ventures to grow.”
Image source : FT.com
Africa : Has Crowdfunding Potential but Regulatory Laws need to Catch Up
Last year crowdfunding platforms in Africa raised $32.3 million for various projects, data from the Afrikstart Crowdfunding in Africa report reveals. However, that figure could be much higher over the coming years if governments across the continent developed crowdfunding regulations.
As Nigerian journalist Yomi Kazeem mentions in his article for QZ.com, despite its rising popularity, the most common limitation of crowdfunding across most African countries, is a lack of legal and regulatory framework.
The Afrikstart Crowdfunding in Africa report states : “The absence of regulation limits the expansion of equity-based or debt-based crowdfunding platforms in Africa.”
Therefore, having a lack of regulation in place is likely to deter investors from using online platforms as there is no investor protection in place.
However, despite having regulation limitations, with cost of access to internet dropping in parts of Africa and smartphone penetration deepening, on the plus side, more Africans are taking advantage of crowdfunding platforms to finance projects ranging from start-ups to social causes.
South Africa comes out on top when it comes to crowdfunding, The Rainbow Nation’s platforms have raised $30.8 million, it’s worth noting that $32.3 million was raised by crowdfunding platforms from all over Africa, so it just goes to show how well South Africa is championing the concept.
The country’s dominance in crowdfunding on the continent is not accidental. According to a report, the popularity of crowdfunding in South Africa is down to the country’s “sophisticated business market, a robust and reliable regulatory credit system and supervision.”
Although not 100% perfect, other African countries can learn a lot from South Africa and adopt a more robust crowdfunding strategy.
Restaurant Chain “M” Secures £1.2M Just Hours After Seedrs Campaign Debut
Just hours after restaurant chain M launched its equity crowdfunding campaign on Seedrs, the London-based company has successfully secured £1.2 million out of its £1.3 million funding goal. (Crowdfund Insider, October 2016)
Since its launch back in 2014, the chain has received numerous awards such as : Best Use of Technology The Cateys 2016, Best Young Chef UK & Ireland 2016, San Pellegrino Awards, Best for Steak and Seafood, and many more.
For those that invested in the campaign, starting with the investors that put £10k into the campaign, they will receive 25% discount at M until January 2019, a copy of Executive Chef Michael Reid’s M: a 24- Hour Cookbook, free membership of M DEN, our luxury private members lounge plus, 15% off online wine purchases.
The investors that put in between £1,000 – £9,999 will receive a 15% discount at M until January 2019, a copy of Executive Chef Michael Reid’s M: a 24- Hour Cookbook and free membership of M DEN, their luxury private members lounge.
Lastly, those who invested between £200- £999 get 0% discount at M until January 2019 and a copy of Executive Chef Michael Reid’s M: a 24- Hour Cookbook.
You can read more about the crowdfunding campaign here.
Image source : Crowdfund Insider
Crowdfunding The Great Wall of China
Heritage officials have launched a crowdfunding campaign to help pay for restoration work on the Great Wall of China.
China Radio International has reported that more than 16,000 people have donated online since the campaign started at the end of August, raising almost 300,000 yuan ($45,000; £34,000) so far (stats taken from last month).
Dong Yaohui, who’s in charge of the fundraising effort, mentioned on the BBC website : “By pooling the contribution of every single individual, however small it is, we will be able to form a great wall to protect the Great Wall.”
The funds made will go towards restoring the Xifengkou section, which runs through a reservoir, and all of the project spending will be made public.
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.