Crowdinvesting is a relative recent phenomenon which is growing in many different countries around the world. Several people have heard about equity crowdfunding or peer to peer lending only in the last couple of years. Nevertheless, as young as it may seems, crowdinvesting, especially in the form of P2P lending, has been out in the market for while: some pioneering companies have been operating since the early 2000s, while GrowVC itself - i.e. Crowd Valley’s parent company- has been active in the online investment space since 2009. In the past few days crowdinvesting has reached a new milestone with the IPO filing of one of the most established peer-to-peer lending platform in the US.
The fact that a crowdinvesting platform is going towards an IPO does not just increase the company’s value itself, but gives a lot more value or - better - validity, to the the entire crowdfunding sector. Even though this new financial source has gained legitimacy under several aspects in the past couple of years - with national authorities showing interest and working to release ad hoc regulations, early stage investors financing platforms to support their growth and allow them to deal with an increasing demand - the IPO filing of one of these companies gives a new, strong signal to the world about where crowdfunding stands. Just by looking at the numbers of the most established peer-to-peer lending platforms one can quickly understand that this is a phenomenon that could not be longer ignored by public markets: Lending Club, the platform that filed for the IPO, for example, said it has facilitated more than $5 billion in loans since its inception in 2007, of which more than $1 billion were made in the second quarter of 2014.
The news of this IPO caused mixed reactions: some people are enthusiastic about it, others are afraid it could be another “dot com bubble”. Even though we cannot predict the future and markets sometimes seem to work irrationally, Crowd Valley has been observing and operating in the sector for long enough to see how things are evolving. In particular, we get to see every day who there is behind these emerging crowdinvesting platforms: we are approached daily by many traditional finance professionals, for example asset managers, broker-dealers and private equity funds, which see the crowdfunding technology as an enabler of efficiency for their original businesses. This means that the technology we provide them with changes the means through which they operate, but does not change the substance of their work. And for this reason we believe that they will be able to keep doing their job and grow their companies professionally, while embracing a new technology that is bringing about a paradigm shift.
References
Armental, M.; Chapman, L. (2014). Lending Club Files for Initial Public Offering. WSJ
Cinelli, S. (2014). Lending Club's IPO and the Next Phase of Crowdfunding. Equities.com
Image credit to: Simon Cunningham http://bit.ly/1vSQwHb
The news of this IPO caused mixed reactions: some people are enthusiastic about it, others are afraid it could be another “dot com bubble”. Even though we cannot predict the future and markets sometimes seem to work irrationally, Crowd Valley has been observing and operating in the sector for long enough to see how things are evolving. In particular, we get to see every day who there is behind these emerging crowdinvesting platforms: we are approached daily by many traditional finance professionals, for example asset managers, broker-dealers and private equity funds, which see the crowdfunding technology as an enabler of efficiency for their original businesses. This means that the technology we provide them with changes the means through which they operate, but does not change the substance of their work. And for this reason we believe that they will be able to keep doing their job and grow their companies professionally, while embracing a new technology that is bringing about a paradigm shift.
References
Armental, M.; Chapman, L. (2014). Lending Club Files for Initial Public Offering. WSJ
Cinelli, S. (2014). Lending Club's IPO and the Next Phase of Crowdfunding. Equities.com
Image credit to: Simon Cunningham http://bit.ly/1vSQwHb
About the author - Irene Tordera
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.
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