The past five years have seen seismic changes in trends for alternative finance. The concentration of funds and investment into the likes of equity crowdfunding has altered the existing trends and forged a new investment landscape.
Today, we assess the annual global financing trends, from Venture Capital (VC) backed tech companies and more, to paint an accurate picture of what the market will look like going forward.
There has been a steady rise since 2011 in funding for venture capital backed Fintech companies, with an especially significant increase from 2013 onwards. Between 2011 and 2013, aggregate investment increased by ~36% to US$3.0 billion, and the number of completed deals increased by 73% to 553 deals. Following this, there was an enormous increase in aggregated investment. From 2013 to 2015, it increased by ~380% to US$14.4 billion, with the number of completed deals increasing by 40% to 775 deals. Together with the increase in deal value and volume since 2011, there’s also been an enormous increase in large financings, in excess of US $50 million, for VC-backed Fintech companies. 2015 witnessed 40 deals across North America alone that included financing in excess of US $50 million. This means that global Fintech financing to VC-backed companies saw its strongest ever first quarter, raising $4.9 billion across 218 deals. If this current run rate were to continue, 2016 will top 2015’s investment totals, both in terms of total investment and deal number (At$19.6 billion and 870 respectively).
The Massolution Crowdfunding Industry report noted exciting raises and developments across the sector in 2015. It estimated the fundraising volume at $34 billion. P2P/Marketplace figures tend to inflate these statistics. Nonetheless, the figure is double the previous year, boding well for the 2016 report. 2015 calculated the real estate crowdfunding industry at over $2 billion in itself, and it’s one industry in particular, as attested by Equitise’s previous blog post, that has continued to soar. The World Bank has buttressed these figures with its estimate that the industry will be valued at $96 billion worldwide by 2020. “We’re expecting 75-100% growth in US equity crowdfunding volume of capital raised in 2016, approximately $3.5 to $4 billion.” Editor at CrowdExpert These figures do not occur in a vacuum, with many crowdfunding trends backing up these financing trends. The proliferation of online platforms continues to fuel the growth in angel investing, just as increased transparency by issuing companies will spur more equity offerings under Title 2 of the Jumpstart Our Business Startups (JOBS) Act in America.
As crowdfunding continues to fill the traditional gap in funding for local businesses, and as more investors tap into the deal flow with fewer administrative burdens, we’re excited to read Massolution’s 2016 report that summarises the seismic changes of the industry in 2016.
Cheers, the Equitise team