9th March 2017
2016 was Crowd2Fund’s most successful year to date, further establishing its presence as one of the UKs leading and most respected crowdfunding platforms. Crowd2Fund had a record number of campaigns funded, with the total amount transacted on the platform increasing by 350%. The hockey stick curve uptake of the P2P platform’s KPIs was supported by a number of new innovations, not least being one of the first four platforms to receive approval for rolling out the IFISA, the first crowdfunder to launch an app, and our AI powered Smart-Invest feature.
In 2017, the company plans to cement their reputation and status as one of the leading platforms by acquiring other P2P companies in order to grow their market share and allow for a wider pool of investors to benefit from returns of up to 8.7% APR.
2016 Stats
Headline stats from 2016 include the total number of campaigns funding on the platform, with an increase of 600% year on year. This increase is likely to be due to the high headline returns offered by the platform, in a low interest rate environment, alongside the added confidence of zero businesses defaulting on repayments. Crowd2Fund is attracting significantly higher volume of deal flow due to the unique benefits of raising a loan through Crowd2Fund, rather than through an older, non regulated platform or a bank. Crowd2Fund is proud to maintain a 100% success rate for projects listed on the platform.
This success rate is supported by the total amount of funds lent or borrowed increasing by over 350%.
Interestingly, the average invested into each campaign per investor dropped from £2390 in 2015, to £533 in 2016, a year on year drop of 78%. This indicates that investors on the platform are increasingly become more sophisticated, and are spreading their investments across different campaigns in order to try and mitigate against risks.
Additionally, a number of investors are utilising Smart Invest to automatically spread their funds based on their own risk profile and preferences.
Highlight Campaigns
2016 saw extreme sports company Ruroc return to the platform for a £360k equity raise to fund new product development. Of their huge army of advocates, those who invested were able to benefit from, amongst other perks, limited edition helmets.
Additionally, the trend for ethical investments continued with campaigns from Tosh Products (reusable coffee cups), Goldfinger (social enterprise changing lives through upscale workshops) and Carbon Dynamics (award winning sustainable, low energy buildings.)
The IFISA
In April 2016, Crowd2Fund was one of the very first platforms to roll out the Government’s new IFISA product, allowing for tax efficient investments into growing British Businesses. Tellingly, Crowd2Fund are one of the few to only allow private investor funds to be invested, not institutional money. Crowd2Fund’s direct FCA regulation and stringent due diligence processes are likely to be two key reasons why they were one of a few platforms with high enough standards to be approved.
The IFISA has seen strong uptake amongst both existing and new users, and is a strong indicator of the latent mainstream demand for P2P – particularly in a low interest rate environment with inflationary pressures.
Other Innovations
The release of Crowd2Fund’s iOS app made it possible to analyse and make investment decisions easily and on the go. This fits in with the lifestyle of an upwardly mobile, aspirational customer base who are not tethered to desktop devices and expect convenience at the touch of a button or swipe of a smartphone screen. The next version of the application is planned for launch in May 2017 with enhanced features and also supporting investor demand for the iOS app. 50% of active Crowd2Fund investors who have an iPhone also use the iOS app.
Smart-Invest, launched in July off the back of a research project and consultation with leading academics, is the platform’s first foray into artificial intelligence. It lets investors automate their crowd lending investments and integrates the IFISA into said investments.
What’s Next?
With P2P becoming increasingly becoming part of the mainstream, it is likely that in 2017 we will start to see a number of leading platforms pulling ahead. Crowd2Fund became profitable for the first time, reassuring regulators and investors that the model is robust enough to significantly scale the offer if desired. Profitability at such an early stage is almost unheard of within the FinTech sector, with other platforms recording large losses in the last year. This growth has been achievable due to their proprietary technology and use of automation, not forgetting AI being at the core of the business.
With its track record of innovation and consistent growth, Crowd2Fund are now keen to solidify their position in the market by being on the look out to snap up other crowdfunders.
“In 2017 we plan to continue to grow organically, and through the popularity of the IFISA but a major part of this strategy is also acquiring other platforms. Our processes and historic returns mean that we can scale quickly to provide British businesses with growth funding, and savers with much needed returns. Buying other platforms will allow us to benefit from economies of scale to service the market more efficiently, and will allow our investors a wider choice of businesses to suit their preferences and risk profile.” Chris Hancock, CEO and founder, Crowd2Fund
The next hurdle for Crowd2Fund’s engineers and designers is to make the platform more social. They plan to roll out the worlds first social network for the investor community. Initial early features can already start to be seen on the current live platform. If the team achieve this, it will be a phenomenal milestone for British FinTech, whilst also embracing the philosophy of transparency and community that sits at the heart of Crowd2Fund.
