We’re really excited with how well crowd-funding is being received on the Irish scene. So far, since our launch on 7th March, we’ve fulfilled 8 business loans with 3 now live, amounting to over €270,000 in capital from over 1200 lenders across Ireland. Clearly this style of funding is appealing to business people and investors alike!
Whilst LinkedFinance remains primarily focused on loans, there are other similar companies in Ireland offering an alternative to the banks, namely fundit.ie and seedups.com. Fundit.com provides a platform for people to attract funding from friends/fans across the world and is largely geared toward arts projects and companies. With seedups.com the focus is more on tech start-ups, and attracting tech-savvy investors.
We’re always keen to share case studies, and will be posting some of our Irish LinkedFinance success stories over the coming months but for now let’s take a look at what’s been happening in the UK, Europe and the U.S.
We’ve looked at Funding Circle (fundingcircle.com) before on the blog. It’s a UK-based business model similar to ours. It continues to average around 30 new loans each week and so far they have funded over £103 million in loans, continually growing both their investor and borrower base. Furthermore the U.K. government have stated that they will lend a total of £20 million to SMEs through the platform. A recent study carried out in the UK by research firm Nesta found widespread preference for online lending over traditional banks among existing users. Reacting to this, Samir Desai, co-founder of Funding Circle, said: “This research shows that the stranglehold of the banks can be broken. Less than 1pc of small businesses have even heard of peer-to-peer platforms like ours but as awareness grows, they won’t go back to the banks.”
Meanwhile in Germany, Auxmoney (auxmoney.com) is a peer-to-peer lending company allowing individuals to take out personal loans of between €1,000 and €20,000 from private investors. More than 10,000 projects, collectively valued at over €43 million, have been financed through the platform.
Based in northern France, Pret d’Union (pret-dunion.fr) also allows private individuals as well as institutional investors to lend money to borrowers directly through a secured bond marketplace. In its first year’s operations, it funded a loan volume of €10 million; currently the loan volume is growing at approx. €2 million per month.
Last October Prêt d’Union raised the maximum loan amount from 19,500 to 30,000 Euro and introduced 2 year loan terms (adding to the existing 3, 4 and 5 year loans).
Established in 2007. Smartika (smartika.it), formerly known as Zopa Italy, provides peer-to-peer credit -lenders and borrowers get rates on average 25% lower than on loans financed through traditional banking channels.
Comunitae (comunitae.com) is one of the leading crowdfunding sites in Spain. Since its 2009 launch, it has received two rounds of funding, totalling over €6 million. To date, its lending community has funded over €2 million in loans and received over €200,000 in interest.
Described as ‘Paradigm-shifting’ by CNN, to date almost 100,000 projects have successfully launched via US crowdfunding site Kickstarter. In total, $525 million has been successfully pledged towards projects, ranging from film, music, art to IT & technological initiatives.
The ‘2013 Crowdfunding Industry Report’ recently estimated the volume of crowdfunding transactions in the U.S. to be at 72%, making it the world leader.
However, as we can see from the growth in volumes experienced by these leading European and UK companies, a significant amount of funding is being generated out of these markets. In fact, according to this report, a large proportion is due to come from Europe, at 26%, and 2% from the rest of the world.
Exciting things to come - stay tuned for more Irish success stories on LinkedFinance!