Crowdfunding: Mapping EU markets and events study Executive Summary 30 September 2015
Crowdfunding: Mapping EU
markets and events study
Executive Summary
30 September 2015
Crowdfunding: Mapping EU markets and events study
September 2015 2
DOI: 10.2874/97125
ISBN: 978-92-79-46661-8
Citation is authorised provided the source and authors are acknowledged.
© European Union, 2015
Crowdfunding: Mapping EU markets and events study
September 2015 3
Disclaimers
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The information and views set out in this study are those of the authors and do not
necessarily reflect the official opinion of the Commission. The Commission does not
guarantee the accuracy of the data included in this study. Neither the Commission nor
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aim of providing specific information about crowdfunding markets within the European
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Crowdfunding: Mapping EU markets and events study
September 2015 4
Abstract
This report considers key trends in the European crowdfunding market during 2013
and 2014, encompassing a variety of funding models, including (but not limited to)
loans, equity and rewards. Data mapping platforms and the ‘projects’ supported by
these platforms was used to quantitatively plot market developments over time
throughout the European Union (EU). This data was also used to consider market
trends before and after national regulatory events in three markets within the scope
period – France, Italy, and the UK.
510 platforms were identified as operating in the EU in the scope period, of which 193
platforms contributed sufficient, eligible time-series data on project activity. The UK
had the largest number of platforms, accounting for over a quarter of the EU total,
with 143 platforms, including 45 participating platforms, and accounting for over 90%
of total capital raised or €2.0 billion. The UK market is followed by France (77
platforms and 25 participating platforms), Germany (65 total and 22 participating
platforms), the Netherlands (58 total and 25 participating platforms) and Italy (42
total and 12 participating platforms).
Crowdfunding projects were identified in every Member State in the EU during the
scope period. Eligible project-level data evidenced a total of €2.3 billion successfully
raised for 206,908 ‘projects’ in 2013 and 2014, where either the ‘project’ was located
in the EU or it was supported by a platform located in the EU (together defined as ‘in-
scope’ projects). While coverage varies significantly between Member States, the five
largest markets by total amounts raised were France, Germany, the Netherlands,
Spain, and the UK.
Analysis of trends in crowdfunding activity before and after national regulatory events
in France, Italy and the UK indicated a diversity of regulatory environments and
approaches (such as the relative development of the markets at the time of
regulation, the level of industry consultation and the nature of pre-existing regulatory
frameworks). As a result, the early effects on trends in market activity are complex
and varied. All three Member States have, however, either undertaken or proposed
further policy initiatives following the regulatory event. This suggests that regulatory
events have supported broader policy momentum in relation to crowdfunding
providers and this market.
Crowdfunding: Mapping EU markets and events study
September 2015 5
About the authors
Crowdsurfer
Crowdsurfer is an independent data utility for the crowd finance world, generating new
intelligence for those inside and outside the industry, and fuelling an emerging
ecosystem of service providers.
We harness the new source of rich and disparate data generated by thousands of
marketplaces daily to offer a comprehensive data-driven view of the crowd finance
industry at both macro and micro levels.
www.crowdsurfer.com
EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights
and quality services we deliver help build trust and confidence in the capital markets and
in economies the world over. We develop outstanding leaders who team to deliver on our
promises to all of our stakeholders. In so doing, we play a critical role in building a better
working world for our people, for our clients and for our communities.
EY refers to the global organisation, and may refer to one or more, of the member firms
of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young
Global Limited, a UK company limited by guarantee, does not provide services to clients.
For more information about organisation, please visit www.ey.com
Crowdfunding: Mapping EU markets and events study
September 2015 6
1 Executive summary
This study considers crowdfunding activity within the European Union (EU) from
1 January 2013 to 31 December 2014 (the ‘scope period’). We used two data sets: a
platforms database and a ‘projects’ database. This report comprises:
A mapping of crowdfunding markets in the EU, identifying main features and
trends, subdivided into:
a platform mapping analysis, where we identified and analysed
crowdfunding platforms operating in the EU Member States. Platforms
offering a range of funding type are included in our definition, including
lending (also known as ‘P2P’, peer-to-peer, P2B, peer-to-business, or
‘marketplace lending’), equity, donation, rewards, invoice trading and
others. This analysis considers growth in the number and type of
platforms, their location, and key activities.
a projects mapping analysis, where we analysed granular project-level
data, where a ‘project’ is a single fundraising attempt (of any funding
type). A sub-set of identified platforms contributed eligible, suitable data
for time-series analysis (these are referred to as ‘participating platforms’ in
this report). This analysis enables an exploration of trends over time.
A regulatory events study of selected national legislative intervention on
crowdfunding, including market trends before and after those events. We
considered selected regulatory events that took place during the scope period and
the mapped market trends before and after each event.
This summary sets out key findings relating to each component and key conclusions.
Note that there are important technical considerations to take into account when reading
these findings, which are set out in the report.
1.1 Market mapping
Market mapping was undertaken using two data sets. For all platform analyses we used
the platforms database. For all project analyses we used both platforms and projects
databases.
Crowdfunding: Mapping EU markets and events study
September 2015 7
1.1.1 Summary of activity
The table below summarises the data relating to platform and project mapping.
Figure 1: Summary of project and platform data gathered (Source: Platforms database, Projects database, Crowdsurfer Ltd.)
Total
Identified platforms
Participating platforms
Total Projects*
Amount raised*
Average raised*
# # # €000 €000
EU projects Equity 114 37 585 144,014 246
Loan 107 35 155,098 1,658,089 11 Rewards 152 75 24,164 163,711 7 Donation 93 35 4,262 14,970 4 Invoice trading 4 1 3,888 275,170 71 Other1 32 7 2,857 14,538 5 Total 502 190 190,854 2,270,493 12 Add non EU Non-EU platforms 8 3 n/a n/a n/a Non-EU projects n/a n/a 16,054 77,778 5 Total 510 193 206,908 2,348,271 11
Other data gathered Failed projects n/a n/a 18,885 88,814 5 Total 510 193 225,793 2,437,085 11
* For successfully ended in-scope projects in 2013 and 2014
1.1.2 Platform mapping analysis
In the platform mapping, we analysed the number and types of platforms active in the
EU in order to understand the current landscape and key trends. We analysed platform
formation rates, and platforms by funding type and location.
In total, 510 live platforms were identified as active in the EU by 31 December 2014
(Figure 2). This includes 502 EU-domiciled platforms (from 22 of the 28 EU Member
States2) and eight non-EU-domiciled platforms. Non-EU countries with platforms that are
active in the EU include the USA, Canada, New Zealand, Australia and China.
1 ‘Other’ includes funding types that do not match the characteristics of the other funding classes.
2 A platform is considered to be domiciled in the Member State in which the greatest percentage of its projects is located.
Crowdfunding: Mapping EU markets and events study
September 2015 8
Figure 2: Analysis of the number of live platforms in the EU by number per year (Source: Platforms database, Crowdsurfer Ltd.)
The total number of platforms rose by 23.2% in 2014 (from 414 platforms in 2013 to
510 in 2014), with growth in identified platforms slowing from 47.3% in 2013 (and a
peak of 74.3% in 2010). The total number of new platform launches decreased from
133 in 2013 to 96 in 2014.
The UK had the largest number of live platforms (143 platforms) that focus primarily or
solely on the UK market, accounting for 28.0% of the EU total number of platforms
(Figure 3).3 This is followed by France (77 platforms, 15.1%), Germany (65 platforms,
12.7%), the Netherlands (58 platforms, 11.4%) and Italy (42 platforms, 8.2%). Outside
of these markets, the number of identified live platforms was significantly lower
(125 platforms, 24.5%).
Figure 3: Analysis of the number of live platforms in the EU by location in 2014 (Source: Platforms database, Crowdsurfer Ltd.)
3 The number of live platforms in a given Member State is determined by the number of platforms whose
activity is predominantly in that Member State (see the definition in Section 2.4 of the report).
4770
122
188
281
414
510
48.9%
74.3%
54.1%
49.5% 47.3%
23.2%
0%
20%
40%
60%
80%
100%
0
120
240
360
480
600
2008 and prior 2009 2010 2011 2012 2013 2014
% c
hang
e
Num
ber
Number of live platforms
47
23
52
66
93
133
96
0
25
50
75
100
125
150
2008 and prior 2009 2010 2011 2012 2013 2014
Num
ber
Number of live platforms in 2014 by launch year
Total live platforms in 2014 = 510
143
7765
58
4233
168 8 7 7 7 6 6 6 5 5 4 2 2 1 1 1
0
40
80
120
160
Num
ber
Number of live platforms in 2014 by platform location
Total live platforms in the EU in 2014 = 510
Crowdfunding: Mapping EU markets and events study
September 2015 9
EU platforms provided a diverse range of funding types and there is further diversity
within each funding type. As shown in Figure 4 below, the most common funding types of
live platforms in 2014 were rewards (155 platforms) and equity (117 platforms); rewards
and equity platforms together accounted for over half of live platforms (being 272 out of
510 platforms). There were eight participating platforms that offered more than one
funding type and had successful in-scope projects.
Some platforms supported projects outside of their own country location (‘cross-border
funding’). 49 participating platforms (25.4% of a total of 193 participating platforms)
supported successfully funded projects outside their platform location in 2014.
Figure 4: Analysis of the number of live platforms in the EU by funding type per year (Source: Platforms database, Crowdsurfer Ltd.)
1.1.3 Project mapping analysis
We analysed the number and types of projects either located in the EU or undertaken by
EU platforms (together defined as ‘in-scope’ projects) in order to understand the current
landscape and key trends. We examined project data by funding type and location, cross-
border activity and multi-funding type platform projects (where the platform supported
projects of a funding type that differed from the primary funding type offered by the
platform).
Project mapping was based on an analysis of 2013 and 2014 data from 193 ‘participating’
platforms. Project data from these platforms evidenced a total of €2.3 billion successfully
raised for 206,908 in-scope projects in 2013 and 2014. This €2.3 billion represents an
approximate market coverage of 68% by amount raised, with EU loans crowdfunding
coverage estimated at 81%, and EU equity crowdfunding also at 81%. The average
amount raised per project remained broadly constant between €10,000 and €12,000
during the scope period (Figure 5).
Rewards30%
Equity23%
Loans21%
Donations18%
Other7%
Invoice trading
1%
Live platforms in 2014
78 94
93117
85107
125
1553
430
33
0
100
200
300
400
500
600
2008 and prior 2009 2010 2011 2012 2013 2014
Num
ber
Number of live platforms by funding type
Donations Equity Loans Rewards Invoice trading Other
Total in 2014 = 510
Crowdfunding: Mapping EU markets and events study
September 2015 10
Figure 5: Analysis of all successfully completed in-scope projects by participating platforms (Source: Platforms database, Projects database, Crowdsurfer Ltd.)
Coverage varies considerably between Member States due to the differences in the
number of active platforms and the collating and suitability of the detailed data required
for this analysis.
As stated above, project mapping includes both projects located in the EU (undertaken
by either EU platforms or non-EU platforms) and projects located outside of the EU but
undertaken by EU platforms:
Projects located in the EU: A total of €2.3 billion was raised for 190,854
successful projects. Of this, €2.2 billion was raised for 185,753 projects through
EU-based platforms and €85.1 million was raised for 5,101 projects on non-EU
platforms. Non-EU based platforms with EU projects include large, global US
rewards platforms and New Zealand-based donations platforms.
Projects located outside of the EU but undertaken by EU platforms: A total
of €77.8 million was raised for 16,054 successful projects. Projects based in Russia,
the US, India and Kenya accounted for the largest share of this category in terms of
the total amount raised.
For projects located in the EU, the five largest markets by total amounts raised were the
UK, France, Germany, the Netherlands, and Spain. Crowdfunding projects were identified
in every Member State in the EU during the scope period. While crowdfunding activity is
therefore an EU-wide phenomenon, there are significant differences in activity levels
between Member States. These differences in the level, and growth rates, provide a
challenge to analysis and presentation. The total amounts raised grew in excess of 100%
from 2013 to 2014 in the majority of markets, but sometimes from a low base.
-
20
40
60
80
100
120
140
160
180
€m
Amount raised
-
2
4
6
8
10
12
14
16
18
Num
ber,
thousands
Number of projects
-
2
4
6
8
10
12
14
Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14
€th
ousands
Average raised per project
-
500
1,000
1,500
2,000
2,500
3,000
€m
Cumulative amount raised
-
50
100
150
200
250
Num
ber,
thousands
Cumulative number of projects
Crowdfunding: Mapping EU markets and events study
September 2015 11
Nearly €180 million of cross-border crowdfunding projects were identified from
participating platforms in the scope period. The largest components of cross-border
activity were undertaken by non-EU platforms operating within the EU, and EU platforms
operating outside of the EU. Cross-border activity within the EU amounted to only €16.9
million of projects by participating platforms in the scope period.
In total, eight out of 193 participating platforms successfully funded in-scope projects of
more than one funding type in 2014 (compared to five in 2013). Of these, four platforms
supported some combination of equity, loans and rewards funding.
1.1.4 Regulatory events analysis
This regulatory events analysis was undertaken using desktop research into regulatory
documentation and reports, and stakeholder interviews.
We considered three national regulatory events, which occurred in Member States during
the scope period:
Italy (26 June 2013) – Regulation of equity crowdfunding by the Commissione
Nazionale per le Societa la Borsa (CONSOB) under Regulation 18592.
UK (1 April 2014) – Regulation of crowdfunding by the FCA under a new dedicated
regime
France (30 May 2014, applicable from 1 October 2014) – Regulation of
crowdfunding and introduction of two specific regulatory statuses.
It is too early to undertake an in-depth evaluation of the impacts of national regulatory
interventions, given that these interventions took place relatively recently. In this study
we conducted analyses to explore how regulation might have affected crowdfunding
activity.
Our analysis shows that activity levels and growth levels are uneven across the EU, as
are the local regulatory and legal frameworks. There is a variety of other contributing
factors that may have shaped the crowdfunding market during the scope period,
including the broader development of the “fintech” (financial technology) industry.
Notwithstanding this variety, there are some similarities between the selected national
regulatory events. In all the three markets:
Regulatory requirements prior to the event had not been specifically designed with
crowdfunding in mind. The extent of crowdfunding activity before the event
therefore depended on the ability of firms to undertake these activities using
existing regulatory permissions, or to operate outside the scope of regulation.
The regulatory event was undertaken with a view to setting out specific rules and
guidance for crowdfunding, and clarifying the broader set of rules and regulations
that would apply to these activities.
The events did not directly target philanthropic forms of crowdfunding (for
example, rewards crowdfunding).
Crowdfunding: Mapping EU markets and events study
September 2015 12
In undertaking these regulatory events, each of the three Member States responded to
local market conditions, customs and practices and has defined new rules for
crowdfunding. The differences reflect variations between regulations, laws and tax codes
between Member States, but also some important differences in the approach to
regulation (for example, the focus on the investor, the platform, and the underlying
project).
Each event has introduced local rules that support domestic platform activity, but do not,
broadly speaking, enable platforms to operate on a cross-border basis. Cross-border
operations usually require a fuller set of authorisations that are more costly and complex
than crowdfunding specific regulatory permissions (for example, those that fulfil
requirements of relevant EU law).
It is notable that each of the three Member States that adopted crowdfunding regulation
has undertaken or proposed further policy initiatives affecting the crowdfunding market.
While it is not possible in all cases to prove the causal link between these developments,
we believe that a clear and stable regulatory environment created by the events has
supported policy momentum in favour of crowdfunding providers. Therefore, a regulatory
event within crowdfunding may be seen as a catalyst for supporting broader reforms.
1.2 Conclusions
1.2.1 Market mapping
Crowdfunding is an EU-wide phenomenon with platforms identified in 22 of the 28 EU
Member States and projects identified in all Member States in 2014. However, the level
of activity and the rate of growth vary significantly across the EU likely reflecting
differences in actual market size and development and differences in data coverage.
These differences provide a significant challenge to analysis and presentation in this
report.
Diversity within the EU crowdfunding market also extends to funding types, with both a
range of funding types on offer and further diversity within each funding type. In 2014,
rewards, equity and loans were the three most common funding types based on the
number of platforms; in addition, invoice trading was a major funding type based on the
total amount raised (with a relatively large average project size given the typical client
profile). A small number of participating platforms dominate the market, with five UK-
based platforms representing over 80% of successfully ended in-scope projects by value.
Crowdfunding activity grew in 2014, compared to its level in 2013, with respect to both
projects funded and the number of platforms. The total amount raised for in-scope
successfully ended projects by participating platforms grew by 118.9% in 2014, while the
number of projects increased by 111.7%. The total number of platforms rose by 23.2%
in 2014 to 510 platforms (compared to 414 platforms in 2013). However, the total
number of new platform launches fell from 133 new platforms in 2013 to 96 in 2014.
Crowdfunding: Mapping EU markets and events study
September 2015 13
1.2.2 Events study
We did not find any observable market changes in the time-series data after national
regulatory events in France and the UK (within the scope period). Nonetheless,
stakeholder interviews suggested that it has played a role in supporting the maturing of
the industry. In Italy, however, the event may have limited the level of equity
crowdfunding activity by restricting the types of organisations eligible to use this form of
funding. In all three event study markets there have been follow on policy
announcements that appear to have built upon, or have been catalysed by, the initial
regulatory event.
The European crowdfunding market remains at an early stage of development and
continues to evolve rapidly. Further research over a longer time period is required to fully
understand trends subsequent to regulatory developments.
Crowdfunding: Mapping EU markets and events study
September 2015 14
DOI: 10.2874/97125
ISBN: 978-92-79-46661-8
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