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
The UK’s sharing economy could boom to 20 times its worth in just 10 years, according to PwC. (City A.M., June, 2016)
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
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
Finnish crowdfunding platformInvesdor 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
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
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 theMassolution 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”.
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What Are Your Thoughts?
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