 | Nesta, an UK-based innovation charity with the mission to help people and organisations bring great ideas to life, together with Cambridge University, has recently published an in depth study on the British alternative finance sector. The results are very interesting, highlighting the outstanding growth of this innovative sector, as we report below. |
£84 million: predicted market size of equity crowdfunding in 2014, with an average investment of £1000. If the estimates are correct, the market almost tripled its size compared to last year. One of the key factor behind this rapid growth may have been the ad hoc regulation put in place by the British regulator last April, which has been also heavily criticized by some who thought that the limit posed on retail investors (10% of their net investable assets) was too strict. According to Nesta, only 38% of the investors were professional investors or high net worth individuals.
£749 million: predicted market size of peer-to-peer business lending in 2014. This is the largest crowdfunding market in the UK and if ISAs for P2P lending are enacted, it will probably grow more and even faster. The average loan size is of £73,222 and 63% of the business which received one saw their profits increasing afterwards. A less encouraging fact is that this is mainly a male market: 83% of investors are gentlemen, which reminds us of the great gender difference in the early stage investing sector.
£547 million: predicted market size of peer-to-peer consumer lending in 2014, almost the double compared to last year. While lenders are primarily motivated by the interest rates, for borrowers there must be something more to it: more than an half of the borrowers were offered a loan from a bank, but decided to go with P2P lending.
Additionally to these figures, the report investigated other forms of alternative finance, including donation crowdfunding (£2 millions), rewards crowdfunding (£26 millions), community shares (£34 millions), pension-led funding (£25 millions), debt-based securities (£ 4,4 millions) and invoice trading (£270 millions). Except for pension-led funding which remains at the same market value as last year, all the other forms of alternative finance increased their volumes. This positive trend is in line with the outcome of this year’s Global Crowdfunding Market Reports published by Crowd Valley. The British situation is, however, very interesting in terms of numbers, as the country reacted overall positively to crowdfunding and online investments. We hope to see soon more of these statistics and an equally exciting outlook on other countries too.
References:
Baeck, P. & Collins, L. (2014). Understanding Alternative Finance. Nesta
Image credit: Baeck, P. & Collins, L. (2014). Understanding Alternative Finance. Nesta
£749 million: predicted market size of peer-to-peer business lending in 2014. This is the largest crowdfunding market in the UK and if ISAs for P2P lending are enacted, it will probably grow more and even faster. The average loan size is of £73,222 and 63% of the business which received one saw their profits increasing afterwards. A less encouraging fact is that this is mainly a male market: 83% of investors are gentlemen, which reminds us of the great gender difference in the early stage investing sector.
£547 million: predicted market size of peer-to-peer consumer lending in 2014, almost the double compared to last year. While lenders are primarily motivated by the interest rates, for borrowers there must be something more to it: more than an half of the borrowers were offered a loan from a bank, but decided to go with P2P lending.
Additionally to these figures, the report investigated other forms of alternative finance, including donation crowdfunding (£2 millions), rewards crowdfunding (£26 millions), community shares (£34 millions), pension-led funding (£25 millions), debt-based securities (£ 4,4 millions) and invoice trading (£270 millions). Except for pension-led funding which remains at the same market value as last year, all the other forms of alternative finance increased their volumes. This positive trend is in line with the outcome of this year’s Global Crowdfunding Market Reports published by Crowd Valley. The British situation is, however, very interesting in terms of numbers, as the country reacted overall positively to crowdfunding and online investments. We hope to see soon more of these statistics and an equally exciting outlook on other countries too.
References:
Baeck, P. & Collins, L. (2014). Understanding Alternative Finance. Nesta
Image credit: Baeck, P. & Collins, L. (2014). Understanding Alternative Finance. Nesta
 | 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. |
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