More and more crowdfunding platforms

Anyone looking for money for a start-up, a youth culture initiative, a film production or a commitment to environmental protection is increasingly finding it on crowdfunding platforms. The "Crowdfunding Monitoring Switzerland" conducted for the third time by the Institute of Financial Services Zug IFZ of the Lucerne University of Applied Sciences and Arts shows that this alternative form of money brokering is becoming increasingly popular and again grew very strongly last year: Although the volume of money brokered is still small compared to the USA or the UK, for example, it has increased almost ninefold in Switzerland since 2011 to CHF 27.3 million in 2015. Compared to the previous year, this represents growth of 73 percent. For the analysis, data from 31 platforms active in Switzerland was taken into account. They are divided into four categories (see box for details): crowdinvesting (money in exchange for a stake in a company), crowdlending (money in exchange for interest), crowdsupporting (money in exchange for goods/services) and crowddonating (no direct consideration).

New offerings and platforms as growth drivers

As in 2014, crowdlending grew the most in 2015, by a full 127 percent. "This strong growth is primarily due to the market entry of platforms that enable not only private individuals but also SMEs to access loans via crowdfunding," explains co-study leader and finance professor Andreas Dietrich. In the area of crowdinvesting, which has increased by more than half, a new offering has also emerged since 2015: so-called real estate crowdfunding, in which one can become a proportional co-owner of real estate. "Both SME lending and real estate crowdfunding have large sums of money flowing through them, which has had an impact on the overall volume," Dietrich says. Crowdsupporting/crowddonating, however, remains the most significant category in terms of volume, with 12.3 million francs in funds brokered. The cultural and creative industries account for a considerable CHF 5.5 to 6 million.

A decisive reason for the general growth is the number of platforms as well as the stronger anchoring of crowdfunding among the Swiss population. While only 14 platforms were active in Switzerland in 2013, this number had doubled by the end of 2014. In April 2016, 40 platforms were already counted. In total, more than 90,000 people financially supported crowdfunding campaigns last year. The study authors estimate that since crowdfunding came into existence in Switzerland, around two percent of the Swiss population has supported this alternative form of money transfer.

Campaign supporters are often female, tend to be older, and live urban

For the first time, the Lucerne University of Applied Sciences and Arts also conducted a survey among project supporters - so-called backers. The aim was to explore their motives and characteristics. The research team evaluated the responses of over 430 backers. The analysis showed that women are more likely than men to co-finance projects, that Backers tend to be older than 35, and that they are more likely to live in cities than in rural areas. In the area of crowdsupporting/crowddonating, the majority of motives are altruistic and idealistic. Personal acquaintance with the borrower also has a significant influence. In the case of crowdlending and crowdinvesting, on the other hand, financial motives are clearly in the foreground.

Marked growth expected in 2016

For 2016, the study authors expect growth to accelerate further to around CHF 65 million. "SME lending and real estate crowdfunding in particular will ensure higher volumes," says Dietrich. "However, we also expect further growth in crowdsupporting because the level of awareness in Switzerland is now very high."

The "Crowdfunding Monitoring Switzerland" is conducted annually by the Institute of Financial Services Zug IFZ of the Lucerne University of Applied Sciences and Arts in cooperation with Swisscom and with the support of the Swiss crowdfunding platforms.

Source: www.hslu.ch/crowdfunding