Crowdfunding continues to grow rapidly

In 2021, the crowdfunding market in Switzerland grew significantly from CHF 606.6 million in the previous year to a new figure of CHF 791.8 million. This corresponds to growth of 31 percent and represents another record figure, as shown by the Crowdfunding Monitor of the Lucerne University of Applied Sciences and Arts. Since the first crowdfunding platform was founded 14 years ago, around three billion francs have been raised digitally in Switzerland.

Significant growth of crowdlending and crowdinvesting

Online intermediation of funds for loans to SMEs and private individuals as well as intermediation of investments in companies and real estate grew significantly. The crowdlending market now totals CHF 607 million (+35 percent), while the crowdinvesting market grew to CHF 147 million. In particular, investments in loans to real estate companies and direct investments in real estate drove this growth. Crowdsupporting/crowddonating volumes declined slightly compared with 2020 to CHF 38 million (-16 percent), after record figures were recorded in this area in the previous year due to the Corona crisis and several crowdfunding platforms that were only temporarily active.

Support for political campaigns gains in importance

There is significant growth in the financing of political campaigns via crowdsupporting. In 2021, for example, more than 800,000 francs were invested in political crowdfunding campaigns. A year earlier, the figure was still around 90,000 francs. Crowdfunding as "financing from below", with which many small donations can be generated, is in vogue. Thanks to this form of financing, on the one hand, financing processes can also be digitized in the area of political financing. On the other hand, it can increase the legitimacy of a political cause if many people participate in a campaign.

Crowdfunding likely to crack the billion mark in 2022

The HSLU study authors expect the total volume of crowdfunding in Switzerland to grow to more than one billion francs this year. "Even with this volume, crowdfunding will remain a niche financing in Switzerland," says Andreas Dietrich, co-author of the Crowdfunding Monitor and banking professor at the Lucerne University of Applied Sciences and Arts. However, the increasing relevance could lead to accelerated growth in the long term, he added. On the one hand, Covid-19 has accelerated the use of digital financial processes by both businesses and individuals. On the other hand, larger donors such as foundations or institutional investors will probably also increasingly allocate funds via this alternative form of financing.

Forms of crowdfunding

• Crowdsupporting: Mostly creative and cultural projects and campaigns from the sports sector. The investor receives a product, an artistic work or a service in return for the invested contribution. For example, someone who finances a book receives a copy free of charge.
• Crowddonating: Majority donations to social, charitable and cultural projects that are not tied to anything in return.
• Crowdinvesting: Investment of equity or debt capital in companies (start-ups) or real estate. In return, investors receive a share of the profits.
• Crowdlending: Mediation of loans to companies or private individuals. In return, the donors receive interest payments, the amount of which depends on the risk of the capital borrower.

Source and further information: Lucerne University