Equity crowdfunding continues to grow in Italy despite the corona crisis
In the first 9 months of 2020 the Italian equity crowdfunding sector grew by 26% and collected $67 million (€57 million). One category in strong growth is that of investment vehicles, practically funds that in turn invest in innovative companies, which have almost quadrupled the collection, from $3.88 to $15.3 million (€3.3 to €13 million). Fin-Novia alone has collected $8.8 million (€7.5 million)
In the nine months of 2020, crowdfunding campaigns in Italy have collected $67 million (€57 million), a figure that is not only 26% more than the same period of 2019, but is only $9.4 million (€8 million) from last year’s total of $76 million (€65 million). In the third quarter, the rate of the collection was practically identical to the same period last year, with 34 operations (same number as 2019) and $21.5 million (€18 million) collected compared to $20 million (€17 million). This indicates that the acceleration occurred in the first half of the year with $45.8 million (€39 million) collected against $33 million (€28 million) collected, which largely coincides with the lockdown.
Furthermore, the reduction in the average number of participants in a campaign, from 137 to 119, in a difficult moment for the economy and personal finances, is counterbalanced by an increase in the average individual investment (ticket) from $3,880 to $5,500 (€3,300 to €4,700 euro).
However, there is also an evolution on the side of fund applicants. First of all, the growth in the average size of the campaigns, from $511,000 to $658,000 (€435,000 to €560,000), as the increase in total funding has been accompanied by a very slight decline in operations, 101 against 103. In addition, the weight of the larger campaigns has increased. In those above $587,000 (€500,000), 28 applicants collected more than $49.3 million (€42 million) against $377.7 million (€321.5 million) collected by 27 entities in 2019.
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Equity crowdfunding in Italy by sector in Q3 2020
The other category in strong growth is that of investment vehicles, practically funds that in turn invest in innovative companies, which have almost quadrupled the collection, from $3.88 to $15.3 million (€3.3 to €13 million), distributed on eight vehicles (of which Fin-Novia alone has collected $8.8 million (€7.5 million), from the four existing vehicles in 2019.
It is very likely that the more difficult and uncertain economic environment tends to reduce the risk appetite of investors, to whom these vehicles offer the opportunity for greater diversification.
The trend towards diversification also manifests itself among intermediaries, i.e. platforms. Currently, there are 15 of them, but seven of them (less than half, therefore) account for 96% of the 2020 collection.
Equity crowdfunding platforms and their focus
This is the picture of Italian crowdfunding that emerges from the last panel of the Milano Finanza Digital Week, which ended last October 1st, and dedicated to the prospects of the investment spread through the equity crowdfunding platforms and their specificities.
The data were presented by Fabio Allegreni, CEO of Edibeez, publisher of Crowdfunding Buzz, according to which the collection for the whole of 2020 may not reach the $117.5 million (€100 million) initially planned, but will in any case be significantly higher than 2019, and then accelerate further in 2021.
During the panel, Tommaso Baldissera Pacchetti founder and CEO of CrowdfundMe reported that the platform has increased volumes by 144%, while Giacomo Bertoldi, founder of Walliance, specified that the success of real estate crowdfunding is also due to the possibility it offers to banks and other lenders of real estate groups to reduce their exposure and therefore their capital needs.
Among the platforms, several of them have been created recently and above all they are aimed at particular types of investments and investors. One example is Ecomill, founded by Chiara Candelise, dedicated to financing projects in the field of renewable energy. “The intent is to provide less risky investment opportunities with less uncertain returns” explained the founder, who sees a good opportunity for development in the advent of Technical Energy Communities, basically local energy purchasing groups, able to provide producers with stable basins of demand.
Different is the case of Doorway, basically a club deal platform, since for each campaign it creates a separate vehicle and is a closed system where to join the campaigns you must be admitted after an examination of your investor profile. “This is also to improve investor control of the company’s performance,” explained Antonella Grassigli, CEO and Co-Founder of Doorway.
Finally, it is worth mentioning Lita.co, a specialized platform on impact investing, i.e. the financing of initiatives with a social background and/or devoted to environmental sustainability, two factors that are increasingly important in the definition of investment strategies of even the largest asset managers.
(Featured image by Francesco Ungaro via Pexels)
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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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