Equity Crowdfunding: What Does the Future Hold?

This piece firstly appaeared on The Market Mogul.

According to a new report, 17 crowdfunded companies have successfully exited over the past five years in Israel. Israel, also known as the “startup nation”, is one of the most vibrant entrepreneurial scenes in the world and has recently seen the launch of a new equity crowdfunding marketplace, iAngels. One of its co-founders, former Goldman Sachs analyst Shelly Hod Moyal told Dealbreaker.com that:

“Crowdfunding was already gaining momentum and it felt so right at that point in time. An opportunity to make a mark, to create something good and impactful for Israel by helping export Israeli tech abroad.”

Israel’s global traction is confirmed by its most representative equity platform, Ourcrowd, which delivered 88% of the aforementioned exits. The company has, in fact, announced the opening of a new branch in Madrid because it sees Spain as the “gateway to South America”. The firm, which already has a global presence via its offices in the US, Canada, Australia, and Singapore, has also set up a business partnership with Cardumen Capital, a Spanish-Israeli venture fund looking for investment in tech.

Ourcrowd’s latest alliance follows ones with the United Overseas Bank Limited (UOB) in Singapore, The National Australia Bank (NAB) in Australia and The Shanghai Commercial & Savings Bank (SCSB) in Taiwan. However, Ourcrowd it is not the only equity crowdfunding platform that has been looking for international expansion.

The Competition Intensifies

In the UK, for instance, Crowdcube, the largest equity crowdfunding platform in the country, recently reported 70 crowdfunding offers listed in Q3 2017. Furthermore, the company announced a new partnership with the American platform SeedInvest with the aim of giving British investors access to the American market.

In the Nordics, both leading market companies, FundedByMe and Invesdor, are fostering their internationalisation plans. FundedByMe recently announced the start of operations in South America via its Mexico branch as well as the opening of a new office in Dubai to take the lead of the UAE market in partnership with its Finnish partner, Around/Privanet, thereby confirming that crowdfunding is experiencing tremendous growth in the APAC region. Invesdor, which defines itself as “the largest equity crowdfunding platform in the Nordic region in terms of volume and turnover”, instead continues to focus on the Nordics as they launched in Sweden with Sharpfin campaign.

Lasse Mäkelä, CEO of Invesdor, claimed that Sweden will be an important market for the Finnish platform by saying:

“It is going to be a big one; we’re launching in Sweden with a bang. Swedish investors are very experienced and savvy, and we have learnt that they are hungry for more alternative investments.”

What Next?

On the one hand, these strategic moves suggest that has always been inherently global. However, on the other, crowdfunding platforms are increasingly seeking growth through internationalisation as a way of fostering diversification among their investment offerings. While Crowdcube, for example, opted for an access alliance, FundedByMe has chosen a complementary approach while Ourcrowd utilised a mix of the two.

Therefore, these partnerships raise a key question: since alliances bring companies together to collaborate, could this trend possibly represent a further step toward the creation of new financial conglomerates over the next decade?

 

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