Because of the year end I wrote this summary of relevant crowdfunding news in 2015. This summary was also published in the news update of the CrowdfundingHub. The CrowdfundingHub is the independent European crowdfunding knowledge centre dedicated on creating a sustainable crowdfunding ecosystem in Europe.
The First European Benchmark
The year 2015 started with the publication of The European Alternative Finance Benchmarking Report. Carried out by the just established Centre for Alternative Finance of University of Cambridge Judge Business School this first European benchmark showed that crowdfunding, peer-to-peer lending and other forms of alternative finance are really moving mainstream in Europe and will raise €7 billion in 2015. The CrowdfundingHub was one of the partners in this research.
Another Record for Pebble
On 23 February the Kickstarter campaign of Pebble Time got started, breaking all records. It was fully funded at $500,000 in just 32 minutes. It crossed $1 million in funding 16 minutes later and exceeded $5 million within 5 hours. That’s by far the fastest ever crowdfunding project to reach $5 million. At the end of the campaign, $20,3 million was raised.
World’s Oldest P2P Lending Platform Celebrated 10th Anniversary
In March Zopa celebrated its birthday of providing loans to consumers for 10 years. Two months later the oldest P2P lending platform announced an innovative market-place deal with Uber to help drivers purchase their cars. Finally, Zopa hit the news in August when it surpassed £1 billion (about $1,5 billion)in lending.
Belgian and UK Government Introduce Tax Incentives for Crowdfunding Initiatives
The UK government announced the introduction of an innovative finance ISA for crowdfunding. From April 2016 P2P lending to both consumers and businesses will be sheltered from tax. The ISA includes all investment-based crowdfunded products. The Belgian government introduced incentives providing tax shelter for persons investing in crowdfunded startups as part of a plan to stimulate growth of startups.
Beyond Kickstarter: The Rise of Equity Crowdfunding
In 2015 Crowdcube became the first equity-based platform to hit £100 million in capital raised. Equity crowdfunding is still in its infancy. However, research done by Altfi shows that crowdfunding platforms are more and more generating efficiencies for young companies in need of capital and access to investors that were previously denied the opportunity to invest in SMEs.
SoFi Leads the Way in Fintech with $1 Billion Funding Round
Fintech is booming, and so are investments in Fintech. In 2014 payment service provider Adyen received the largest Fintech funding ever with an amount of $250 million. In 2015 this record was crushed by marketplace lender SoFi, which is short for Social Finance, that received $1 billion of primary capital in a funding round led by the SoftBank Group.
New SEC Crowdfunding Ruling
In the US the Securities and Exchange Commission adopted final rules to permit companies to offer and sell securities through crowdfunding. The new SEC crowdfunding ruling passed rules to implement Title III of the JOBS Act, bringing non-accredited investors into the fold for equity crowdfunding. This sets the stage for equity crowdfunding to continue its exponential growth on top of the existing market for accredited investors.
EU VAT Committee Posts Review on Taxing Crowdfunding
The EU’s VAT Committee has published its review of the liability to VAT of crowdfunding activities in November. The Committee stated that “where platforms provide services free of charge they remain outside the scope of application of the VAT Directive”. But where services generate a fee, such services are subject to VAT.
Hitting the $100 Million Funding Milestone
In December Star Citizen reported that it hit the $100 million funding milestone. The funding drive for the space exploration and combat game began in 2012 on Kickstarter. Since its campaign ended, Star Citizen has continued to raise money through pre-orders and via sales of spaceships that players can fly and fight in the game’s virtual universe.
The Rise of Marketplace Lending, Abandoning the P2P Model?
2015 was the year that more and more traditional financial institutions teamed up with crowdfunding platforms, proving that crowdfunding is here to stay. Driven by low interest rates and sub-zero yields, hedge funds have poured billions into P2P lenders. Banks too are moving into this sector. These institutions are not only repackaging P2P loans into new instruments, via securitisation; they are lending via these platforms too.
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