APAC: Equity Crowdfunding Still a Niche Market

The online alternative finance market in the Asia-Pacific region grew 136% last year to $245.3 billion, led by strong growth in China, the 2nd Asia Pacific Alternative Finance Industry Report entitled Cultivating Growth, produced by the Cambridge Centre for Alternative Finance at Cambridge Judge Business School, University of Cambridge, the Australian Centre for Financial Studies at the University of Monash Business School in Australia and Tsinghua University in China confirms.

The report is based on data collected from 628 platforms across the Asia-Pacific region, including 463 from China and 165 platforms from the wider region.

Australia emerged as the second largest market in the Asia Pacific with $610 million – a sizable increase on the $398 million from 2015. Combined with New Zealand, which totalled $223 million in 2016, Oceania was the largest regional market in the Asia Pacific outside of China. Other key markets were Japan at $398 million, South Korea at $376 million, Singapore at $164 million, and India at $124 million where equity-based crowdfunding has remained in a grey area awaiting further input from the regulator.

EQUITY CROWDFUNDING HIGHLIGHTS

In the wider Asia Pacific region, if marketplace/peer-to-peer consumer lending had the highest level of institutional funding at 55% of total funds, equity crowdfunding had much less at 15%. 

Institutional Investment By Model.PNG

In terms of contribution to the market, equity-based crowdfunding accounted for 5% of the market and real estate crowdfunding for 1.61% totalling a 6.5% outside China in 2016 where equity-based crowdfunding platforms raised US$0.460 billion for SMEs.

Among the most funded industries, for equity-based crowdfunding, technology was the highest funded industry, followed by leisure and hospitality.

In terms of stakeholder arrangements in the Asia Pacific area (excluding China), for equity-based crowdfunding, just over 50% stated that a VC or angel owned either a minority or a majority stake in their firm confirming crowdfunding being part of the equity food chain.

financial inclusion

In terms of financial inclusion in the Asia Pacific area (excluding China) in 2016, equity-based crowdfunding had the lowest level of female participation with 8% of fundraisers and 6% of funders being women for this model.

Surveyed platforms were also asked for the proportion of funds that went to entities based outside the platforms’ headquartered country. Equity-based crowdfunding had the highest proportion of funding flowing out to other countries with 50% of funds going to businesses located in another country.

funding outflow.PNG

Find out more here.

 

 

 

 

 

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