The Swiss Crowdfunding Market Will Record a Decline in Volume

The Crowdfunding Monitor Switzerland is a project of the Institute for Financial Services Zug IFZ at the Lucerne University of Applied Sciences . The study is carried out every year with the support of Swiss crowdfunding platforms.

Four different forms of crowdfunding are examined, namely the following:

Crowdsupporting

Mostly creative and cultural projects and campaigns from the sports sector. The investor receives a product, an artistic work or a service for his or her contribution. For example, anyone who finances a book receives a copy for free.

Crowddonating

Mostly donations for social, charitable and cultural projects that are not tied to anything in return.

Crowd investing

investments of equity or debt capital in companies (startups) or real estate. In return, the investors receive a share of the profits.

Crowdlending

Arranging loans to companies or private individuals. In return, the lenders and investors receive interest payments, the amount of which depends on the risk of the borrowers.

The most important results of the study at a glance

In Switzerland, a volume of 558.7 million francs (-15.6%) was brokered in 2023 .

Since the first crowdfunding platform was founded in Switzerland fifteen years ago, around 4.2 billion francs have been raised through crowdfunding.

The crowdlending sector recorded the largest volume in 2023 at 398.1 million (-20%) .

The crowdinvesting sector (131.5 million) defended its position with a comparatively moderate decrease of 2.9 percent.

The volume in the area of ​​crowdsupporting/crowddonating (29.2 million, -0.4%) remained practically unchanged compared to the previous year.

Around 200,000 people supported a crowdfunding campaign in Switzerland in 2023.

36 crowdfunding platforms were active in Switzerland at the end of March 2024 (based in Switzerland). In 2023, however, financing campaigns were only recorded on 23 platforms.

Crowdfunding volume falls to 559 million francs

The Swiss crowdfunding market set its record in 2021 with a volume of 791.8 million francs. In both years after that, the values ​​fell; in 2023 the volume was 558.7 million francs and shrank by 15.6 percent compared to the previous year.

Sharp decline in real estate financing

The individual segments of crowdfunding have developed differently. Crowd investing fell by 2.9 percent to 131.5 million francs. The most noticeable shift occurred in crowdlending, where the volume fell by 20 percent to 398.1 million francs.

The reasons for these developments are complex. On the one hand, higher interest rates can have an inhibiting effect on loan demand. On the other hand, the growth of sub-sectors such as real estate financing always depends heavily on the development of individual platforms and the competitive situation.

Numerous platforms on the market – but only a few are really relevant

At the end of 2023, there were a total of 36 crowdfunding platforms in Switzerland. However, only a few platforms are relevant for the individual sub-areas of crowdfunding.

In crowdsupporting/crowddonating, the four largest platforms achieved a market share of 86 percent. In crowdlending, the five largest platforms achieved a market share of 80 percent and in crowdinvesting there are only three platforms that account for 85 percent of the market.

In total, only 23 of the 36 platforms financed crowdfunding projects. More than a third of all platforms did not process any projects.

High success rate in financing sports and cultural projects

Crowdsupporting/crowddonating remained stable compared to the previous year with a decrease of 0.4 percent. Since 2017, the annual volume has leveled off at between 25 and 30 million francs. Exceptions were the years 2020 and 2021, which were characterized by Covid-19, in which numerous support projects were financed via the Internet and the volumes increased accordingly.

Financing via online platforms has become an important and promising pillar for sports and cultural projects. Last year, over 75 percent of the projects advertised were actually financed. The average amount invested in a project per person is also high at just under 180 francs.

Financing projects on Swiss platforms are very successful in international comparison. This can also be attributed to the professional support provided by the Swiss platforms in project financing.

The largest categories within crowdsupporting/crowddonating are “Sport & Health” with 9.5 million, followed by “Society & Social Projects” with 3.8 million and “Technology, Business & Startup” with 3.2 million francs.

The Crowdfunding Monitor Switzerland 2024 offers numerous details on the development of the crowdfunding market. For the first time, the report contains a detailed look at the financial and tax treatment of crowdfunding.

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(Featured image by efortlessly via Pixabay)

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First published in MoneyToday.ch. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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