Big changes are happening in the financial services industry, with Fintech that has experienced a fantastic growth and with financial technology companies now on pace to see the level of investments to reach a new record in 2017. As part of this, there is a case represented by Real Estate, a trillions dollars sector that has been slow to change, which is seeing a wave of innovation with property technology, or Proptech.
Launching a digital finance portal for the first time can be difficult. From our experience, we understand there are many moving parts to this venture so, at a high level, we have outlined the main considerations when starting such an undertaking.
An innovation is said disruptive when it “helps create a new market and value network, and eventually disrupts an existing market and value network (over a few years or decades), displacing an earlier technology”.
Crowdinvesting has been evolving in a way that could well be that of a potential disrupting innovation for many markets. And real estate may be the first one.
From the last Global Crowdfunding Market report published by Crowd Valley, real estate crowdfunding emerged as one of the main trends worldwide. As the image on the left shows, in Q1 2014, real estate was the asset type whose demand by Crowd Valley’s potential clients has increased the most compared to previous quarters, passing from 19% in Q4 2013 to 30% in the first quarter of the present year.
In a recent academic study it was explained that one of the advantages of crowdfunding is that it allows entrepreneurs to overcome the spatial proximity limit and to find investors that may be located even far away from them. However, lately we have also been witnessing the development of crowdfunding that seems to go in the opposite direction: local crowfunding, that is crowdfunding for projects and investors who are located in the same area or neighborhood.
“Crowdfunding platforms could naturally evolve to become the primary source of financial services for young generations” Nathaniel Karp, chief economist for BBVA Research, US Economic Outlook, 2nd Quarter 2013
There is a growing sense that our industrial age capitalism has reached a pivotal point in its evolution. Even people who have long and deep experience of working in the financial system believe it needs change.
There is a big mismatch between the financial support today's real economy needs and what financial markets are able to deliver. The banking industry is run by a select few large organisations, which are allowed to create money effectively out of nothing, and which are big lenders to unsustainable sectors such as the coal industry.