Why the Crowdfunding Sector in France Drops Nearly 25% in 2024

Crowdfunding is in sharp decline, according to the latest crowdfunding barometer in France, published on Tuesday, September 17th by Forvis Mazars and France FinTech. In the first half of 2024, 830 million euros were collected, compared to 1.106 billion euros in the first half of the previous year, a decline of 24.9%.

“Crowdfunding is not immune to economic realities,” Bertrand Desportes, partner at Forvis Mazars, confirmed. “There is a real estate crisis of unprecedented magnitude, which is therefore logically affecting real estate crowdfunding.” This crisis weighs on crowdfunding in general, because real estate represents the majority of investments (55% in 2024, with 459 million euros of funds collected).

Investments in renewable energies or in innovation do not compensate for this decline. And the entire collection for the year 2024 will not exceed 2 billion euros, “a symbolic threshold crossed over the last two years.” Real estate crowdfunding, for its part, “will not pass the billion mark in collection in 2024,” while it generated 1.2 billion in investment in 2023 and 1.6 billion in 2022.

Recently, there have been fewer real estate development operations and the platforms are more selective. Crowdfunding: presentation and regulations Investors cautious about risks At the end of the chain, investors are also more vigilant. “They look more at the financial and extra-financial parameters of each project (financial ratios, guarantees taken out, pre-commercialization rates, geographical location, etc.),” Bertrand Desportes explained.

In general, “the investor community has gradually become more competent on the subject of crowdfunding with the benefit of hindsight for a few years now”. “Although the sector is currently going through serious turbulence, we remain optimistic in the medium term” Because the risk has increased, with “delays that are not yet resolved and collective procedures on the rise”.

Of course, projects that are more than six months late have decreased: they have gone from the 20%-25% bracket at the end of 2023 to the 15%-20% bracket at the end of June 2024. But some of them have moved into the “collective procedures” or “permanent losses” categories.

Positive momentum for the French crowdfunding sector in 2025?

Good news, “projects coming online in 2023 or 2024 have been analyzed with more demanding parameters (crisis context integrated into the models, etc.).” Ultimately, “once the old stock (coming online between 2020 and 2022) has been cleared, the sector should get out of the rut.”

The internal rate of return (IRR) also reached 10.9% in 2024 , while it peaked at 10.3% last year. With these indicators, Bertrand Desportes remains optimistic: “Although the sector is currently going through serious turbulence, we remain optimistic in the medium term and we are projecting an upward dynamic, starting in 2025.”

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(Featured image by Jakub Zerdzicki via Unsplash)

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

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