OFF3R analysed major equity crowdfunding platforms including Seedrs, Crowdcube, Syndicate Room, Angels Den, Envestors and The House Crowd. The P2P lending platforms examined were Zopa, Landbay, RateSetter, ArchOver, Marketinvoice, Lending Works, Funding Circle and Thin Cats.
The Index shows that equity crowdfunding raised a combined total of £216.25m and P2P facilitated a combined lending of £2.6bn.
An average amount of £18m per month was raised per month across the seven platforms, according to the Index. Around 80,000 investments were made, with just fewer than 400 funded deals.
The period October to December 2015 was characterised by a high growth trend which OFF3R put down to investor confidence in the asset class, a selection of large fund raisers and the state of the broader macro-economic environment.
December 2015 was the best performing month of funding with £26m raised; January to September 2016 saw an approximate 25% drop off in raised activity between these months and the previous year.
The Index shows that the average amount lent per month was £197m across the eight platforms. April 2016 showed a 7% drop due to a number of factors, such as Lord Turner’s negative comments about the P2P market and Lending Club’s loan book discrepancies.
There was a slight drop in total lending throughout June and July 2016, while August saw lending increase by 20% – the biggest month-on-month increase in the data. September 2016 was the strongest performing month with nearly £234m lent through P2P.
Commenting on the Index, Lex Deak, CEO and co-founder at OFF3R said: “Our Index is part of our mission to educate and empower investors to make informed decisions and get better returns. We’re excited to be launching at such a critical time.
“Traditional investors have had a tough year: interest rates hit record lows, inflation rates are set to increase and the economy is suffering from Brexit uncertainty. These events alongside low returns are encouraging investors to consider alternative investment options.
“As the crowdfunding market matures investors would like to see larger businesses turning to the crowd which may put pressure on the current £4m limit. At the same time, we should see more standardisation in the way in which account and finance information is presented. This will make it easier for investors to be able to compare opportunities.”
On P2P, Deak commented: “P2P continues to be popular with investors, the market increased amounts lent during the post-Brexit period, with September being the strongest performing month on record with £234m being lent. The Government has bought into its potential and the market is increasingly robust.”
Equity Release Crowdfunding as a Good Investment?
Investing through equity crowdfunding can give the investor greater personal satisfaction than investing in a blue-chip or large-cap company. This is because the investor can choose to focus on businesses or ideas that resonate with them or are involved with causes in which the investor has a deep belief.