New digital platforms, an unprecedented impact component and increasingly attractive real estate. The legacy of the Covid19 emergency shows a renewed face of crowdfunding that, even during the lockdown, never stopped attracting projects and investors, both for lending and equity. Obviously due to the fluctuating trend of the markets that pushed investors to also look at alternative finance.
“In this period, there has been a strong push towards digitization – explained Alessandro M. Lerro, president of the Italian Association of equity crowdfunding (Aiec) – During the lockdown, new platforms have been conceived, especially in real estate, which will be launched by the summer.”
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The impact paradigm
In the last year, there was an interest in a social component or a green approach. Now the signs are more evident. The latest in order of time is that of Mamacrowd, the first Italian equity crowdfunding platform that has chosen G311 – Green Living, the project that proposes a new post-lockdown housing concept (gardens, large spaces, shared services) and aims to raise up to $4.94 million (€4.4 million).
“By now the watchword is sustainability. In the pipeline of new platforms we are starting to talk about impact and there are projects in this direction. Think, for example, of the financing of the tax bonus, which allows you to recover expenses for energy efficiency – explained Lerro – With the Dl relaunch has been increased to 110%. Companies can no longer count on a down payment. For this reason, crowdfunding lending projects are being set up to support companies that work in energy efficiency by financing the initial part of the work. This type of initiative is part of the impact because it has a positive impact on the environment and the social fabric.”
An area with a social impact is that of urban regeneration, where the real estate component combines social interest. “There will be room for redevelopment processes as long as there is an underlying business model that is favorable for retail investors with limited risk appetite and who need a certain return. Now a redevelopment project is even more interesting if the investor himself lives in the territory on which the project insists. The return is not only a financial return: that investor knows that his investment has a relapse close to his territory. We are seeing for example in lending projects in the energy sector that have to do with communities.”
It is precisely the energy communities that will be at the basis of a revolution supported by the latest European directives. These are communities where the production and/or consumption of energy is shared. They will also enhance the territories also flatfome as Ener2crowd which proposes investments with differentiated rate of return depending on whether investors are in the place where the intervention takes place or not.
The relaunch of activities
Lending crowdfunding also offers new possibilities to ensure the survival of those economic activities heavily penalized by the emergency. “We are starting to think about an interesting profile of the crowd economy, which is not only a financial phenomenon but also a marketing one – continued Lerro – . For example, let’s take one of the sectors most affected by the Covid19 crisis, which is the catering sector. Let’s imagine a restaurateur who wants to relaunch the business with funding through the crowdfunding platforms. Here he could set up a campaign not only on raising money against interest rate but on the loyalty of investors, who can be his customers, his local community. It could create an engagement with a beneficial effect that goes beyond mere borrowing but has a positive impact on the territory.”
The race of real estate
The positive trend in real estate in 2019 continued undeterred during these months of the year, which indeed favored the birth of new platforms. The latest Bridge Asset and others are ready for launch, both in equity and lending.
“We have passed the lockdown working on new platforms that are now making their debut. – explained Lerro – There has been a significant increase in projects, mostly in the real estate sector. We are developing an offer with more structured and better-explained projects. You can expect more and more informative and more in-depth platforms because not only the demand is increasing but also the level both in terms of investment amount and sophistication of the investor.” Lerro cited the Italian equity record set on the Backtowork24 platform by Finnovia: a $8.54 million(€7.6 million) campaign, conducted in partnership with Intesa Sanpaolo. The average investment was over $33,700 (€30,000).
Both the offer and the demand are growing. That is due to the fact that, unlike other areas such as technology, investment in real estate is easier for the retail investor to understand and the risk is lower due to the presence of a real estate asset.
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First published in IlSole24ORE, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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