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Equity Crowdfunding as a Tool to Allow SMEs to Make Open Innovation

The term “Open Innovation” is used more and more frequently, especially in reference to large companies which, in order to create more value and compete better on the market, choose to use not only internal R&D, but also ideas, solutions, tools, and technological skills coming from outside, especially from startups (Economyup).

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The term “Open Innovation” is used more and more frequently, especially in reference to large companies which, in order to create more value and compete better on the market, choose to use not only internal R&D, but also ideas, solutions, tools, and technological skills coming from outside, especially from startups (Economyup). To implement this strategy, large companies use the tool of Corporate Venture Capital for which, according to a recent report by Gellify, companies that implement it set aside $5.8 to $11.6 million (€5 to €10 million) each year. This is an affordable size for large companies, but unthinkable for SMEs that would like to adopt a similar development strategy.

Equity crowdfunding, on the other hand, has proven over time to be a tool that is more in line with the size of small and medium-sized companies, which, in fact, have often used it for direct investments in startups.

The cases are becoming more and more frequent, but the most recent examples concern two ongoing campaigns: Unyli, innovative technology and distribution model for the underwear market, and Lesson Boom, a marketplace that connects sports instructors and guides to those who love sports.

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Unyli

Unyli’s campaign, now halfway through its journey with already $133,000 (€114,000) raised compared to the $116,000 (€100,000) of the initial goal, in addition to Trentino Sviluppo as a professional investor, has also collected the investment of AD-archdesign, a general contractor specialized in the design and implementation of furniture for public and commercial venues. Founded by Andrea Piceni in 2011, Ad-archdesign, offers tailor-made furnishing solutions with a “turnkey” offer from the conception to the supervision and realization of the project. The company, which has strong expertise in the sector of franchising chains, has achieved a 2020 vs 2019 turnover growth of +123.5% with about 4mln of revenues and aims to almost double the growth in 2021.

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The innovation introduced by Unyli consists, in short, in integrating offline and online channels, selecting, on the one hand, well-known brands (in these weeks the company has signed new agreements with new brands such as Chiara Ferragni and Armani Underwear) or high-potential brands and affiliating, on the other hand, traditional stores that are offered a digitalization path. This allows them to optimize sales and inventory and to have access to the web sales channel, through Unyli’s e-commerce. In fact, the affiliated stores also become the physical, territorial “hubs” where orders collected through the online store are diverted.

Lesson Boom

Lesson BOOM is a vertical sports marketplace that connects sports professionals and freelancers with users across the country and allows sports enthusiasts to take advantage of the best facilities and professionals.

Its campaign has reached its goal and is overfunding, thanks also to the investment of SportIT, a reference point for e-commerce in the sports sector. The company was born in 2013 from the thirty years experience gained in the traditional market of sports and leisure articles, thanks to the founder of Brico Sport and the Colzani family that has continued the work and the activity. SportIT maintains the 2 historical and traditional stores in Seregno and Cesano Maderno, integrating them with two corner shops in Monza and Verona and looking to the future with SportIT Football Milano, a new store concept that integrates the spaces of the traditional store with the services of the online.

Lesson BOOM allows you to choose and book single lessons, subscriptions or special packages so you can play the sport you love. The goal is to simplify the search for sports lessons and specialized professionals by choosing the most satisfying alternative and booking and paying directly on the portal. With 1200 subscribers to the platform divided between sports facilities and professionals and 5000 registered users, the startup is present in over 100 Italian locations with a focus on Milan and Rome.

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(Featured image by GotCredit CC BY 2.0 via Flickr)

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

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Daphne Freeman has worked in the crowdfunding and impact investing industry for the past few years, gaining experience in marketing, and connecting businesses and entrepreneurs in need with the right investors. As a seasoned grant writer as well as financial market journalist, she is passionate about making a social impact in the world. A free spirit, Daphne also enjoys writing and exploring topics of interest, currently CBD, health and beauty, and social media influencers.