crowdfunding news

on the blog

10th Mar, 2016

Crowdfunding and P2P are Booming in the UK, Nesta Report Confirms

Alternative finance claimed 12 percent of small business lending in 2015, a sizable share of a rapidly changing market.

That’s according to a report titled ‘Pushing Boundaries’ by Nesta in collaboration with the University of Cambridge. This report is part of an annual series from the institutions that analyzes the alternative finance industry, including P2P lending and crowdfunding. Another key takeaway is that the sector grew 84 percent in 2015 and facilited £3.2 billion in loans, investments and donations — nearly doubling over 2014. More than 1 million people invested via online platforms in 2015, and 254,721 individuals, projects, not-for- profits and businesses raised finance via online alternative finance models.

And that rapid growth seems poised to continue, especially as banks and other financial institutions get in on the action. Institutions are increasing their stake in alternative finance, as Nesta’s report demonstrates.

And, institutional investors are taking the online marketplace more seriously. About 45 percent of all platforms reported institutional involvement. Donation-based and equity-based crowdfunding grew exponentially in 2015.

Of the total market, peer-to-peer business lending comprises £1.49 billion, almost doubling the amount lent in 2014. £881 million of that is in non-real estate lending projects, like The peer-to-peer business market experienced an increase in automated lending and in secured loans.

The report projects that the alternative finance sector will grow to more than £5 billion in 2016.

“With increasing public and business awareness and the introduction of the Innovative Finance ISA, opportunities are abundant for the alternative finance industry in 2016 as well as challenges. From the peer-to-peer lending side, the challenges for 2016 are likely to be deal origination, credit risk modelling and underwriting. For equity-based crowdfunding, the challenges are not too dissimilar. The focus is likely to be on deal flow, due diligence and dealing with business failures as much as successes.”

Nesta’s report concisely demonstrates the sharp growth of various sectors of the alternative finance sector. As these industries continue to grow, we’re thankful for institutions like Nesta that keep tabs on industry growth and trends so we can make the rebuildingsociety community even better.

30th Nov, 2015

P2P Weekly: FinTech Growth

“Banking facing ‘Uber moment’, says former Barclays boss,” The Guardian

Technology continues to strengthen new banks and alternative finance, while traditional banks are at risk of falling behind, said Anthony Jenkins to Reuters. Jenkins was ousted from Barclays in July.

“Chinese Online Lending Startup Dianrong To Expand Into South Korea,” Wall Street Journal

One of China’s biggest peer-to-peer lenders will partner with a Seoul-based conglomerate to bring the Chinese company’s technology to South Korea’s financial industry.

“Scammers are trying to extort the customers of hacked crowdfunding site Patreon,” Business Insider UK

Patreon users exposed in a September hack are now being extorted by scammers who claim to have extensive data on those users. Patreon executives have urged users to ignore the messages.

“China Report: Bank Executives are Fleeing to FinTech Companies,” Crowdfund Insider

Several executives of high profile Chinese banks have turned to jobs in fintech after salary caps in the banking industry made it less attractive.

04th Nov, 2015

P2P Weekly: Treasury Glows

“Treasury sings praises of peer to peer lenders,” FT Adviser

At the P2P Finance Association Summit in London, city minister Harriett Baldwin tipped her hat to the P2P industry, saying: “P2P platforms and fintech provide competition, ideas, and technology– making people’s lives better and the markets more effective. When you do well, your businesses flourish. Excellence breeds excellence. Customers have the services they need to meet their aspirations. And this country becomes better off, as a result of all this activity taking place here in the UK.”

“Where it’s due: Britain’s small firms are not as credit-starved as they may seem,” The Economist

Analysis shows that the credit outlook for SMEs in the UK is better than a surface level examination might indicate. Demand for credit increases, and SMEs are repaying loans quickly. Healthier banks and small businesses have made for a lot of activity, which should be considered a good thing.

SEC votes to allow equity crowdfunding for startups, small businesses,” Chicago Tribune

In the U.S., the Securities and Exchange Commission adopted new rules that allow individual investors to buy shares of startups and small businesses through crowdfunding platforms. Crowdfunding leaders praised the move as a step toward democratising investment. There are clear limits designed to protect investors based on an individual’s net worth and other factors.

“RebuildingSociety to support own auctions,” AltFi is in the news. Our new catalyst initiative, which promises that we will be the first to invest in all loans we post, has caught industry attention.

28th Sep, 2015

P2P Weekly: Kickstarter

“Kickstarter now legally bound to balance altruism with profit,” CNET

Kickstarter has reorganized as a public benefit corporation after 6.5 years of operation. The move requires that they demonstrate ongoing efforts to positively impact society. About 0.1 percent of U.S. companies have the designation.

“Mapped: How the sharing economy is sweeping the world,” The Telegraph

The Telegraph has a fascinating map that shows where and how sharing economy companies are having the most impact. Take a look!

Peer-to-peer business loans to hit £12bn in 2020,” The Telegraph

According to a study of the business lending market, P2P lending is on track to grow 10 fold from 2014 to 2020.

“Improving technology has recently given rise to peer-to-business lending and crowdfunding as alternatives to banks. With an emphasis on user-friendliness and a concerted marketing drive, this sector is likely to grow rapidly over the years to 2020. Partly this will be come naturally through economic growth, but will also likely be due to these new businesses taking SME lending market share lending from banks,” the study says.

“P2P Lending: Addressing the Challenges that China is Facing as its Economy Transforms,” Crowdfund Insider</>

P2P may become an increasingly important component of China’s turbulent economy. Although regulations limit the lending format’s power (for example, P2P lenders can’t use their own money to secure loans), it continues to develop inroads in the economy. American businessman Barry Freeman moved to China to found Jimubox. He said he wants to “help build a company that will solve some of the challenges that China is facing as its economy transforms.”

21st Sep, 2015

P2P Weekly: Next FinTech Frontier

“This is the next revolution in fintech, according to investors,” Business Insider

With crowdfunding, P2P lending, alternative payment methods and more shaking up the financial tech industry, some investors have their eyes on a new area of opportunity — insurance.

“We’re just at the start of an insurance explosion here. I’ve seen more and more insurance companies in the US, Europe, and Asia getting started,” said venture capitalist Pascal Bouvier. “I wouldn’t be surprised if we tally the numbers on investment in insurance startups two years from now and it’s massive.”

“Startup bringing peer-to-peer lending to Canada this fall,” The Globe and Mail

A new Canadian lender called Lending Loop will individuals investors with as little as $50 to join its membership. It’s the first peer-to-peer lender accessible to average people in Canada, where other companies have only allowed accredited investors to join.

“Saved from the streets by crowdfunding, young woman looks to the future,” The Guardian

In a heartwarming story out of London, photographer Cathy Teesdale turned to the crowd to help Naiomi, a homeless woman and aspiring horse trainer, get into safe housing. Teesdale’s JustGiving campaign raised more than £1,000 in two days, and now Naiomi is getting back on her feet.

“Fast-growing P2P sector set for shakeout,” Wall Street Journal

New regulations from the Financial Conduct Authority designed to improve the security of the peer-to-peer lending sector are putting the squeeze on some firms. Industry leaders have said the new regulations drastically change the economic reality for lenders, especially smaller ones. Others have noted that “thinning the herd” may not be such a bad thing, as it will increase the reliability of the industry as a whole if all participating lenders are more economically stable.

“Prestamos Prima launches peer to peer lending for real estate in Spain,” Crowdfund Insider

Spanish finance group Prestamos Prima is launching Viventor, which will provide peer-to-peer loans secured by mortgages. Initially, it will only be open to EU investors. Says Prestamos Prima CEO Andris Rozenbahs:

“The financing model of high street banks is outdated, and they are too slow to change the course as fast as the market demands. Recent years have shown that alternative finance solutions are reshaping the industry, and a major change on stage is inevitable.”

Thank you
Your Bid's been