Why the Crowdfunding Sector in Spain Fell 17% in 2020

The crowdfunding sector raised $203.4 million (€167 million) last year in Spain, 16.85% less than a year earlier, according to the Report on Crowfunding in Spain 2020, which has been prepared by the University of Jaén and the University of the Republic (Udelar) of Uruguay.

The list is led by lending platforms, the so-called crowdlending, which reached $60 million (€49.16 million). Next are investment platforms (equity crowdfunding) with $54.3 million (€44.55 million) and, in third place, real estate crowdfunding, with a total of $35.7 million (€29.32 million) raised. In the fourth position appears donation crowdfunding, with 26.96 million, while reward crowdfunding reaches $20.77 million (€17.05 million).

According to the report, for the first time, there is a decrease in fundraising in Spain as a consequence of the social and economic situation resulting from Covid-19. However, the decline of the crowdfunding sector in Spain has two key points, crowdlending and real estate crowdfunding and, in both cases, due to the influence of two leading platforms. Housers and Mytriple A have gone on to drag down overall fundraising when they were previously expanding it.

Despite this reduction in fundraising, equity crowdfunding has remained firm and with record fundraising campaigns, while reward crowdfunding and donation crowdfunding have increased the resources raised. In addition, sectors such as loan crowdfunding and real estate have seen investments diversify and new platforms launch, which encourages us to think that this 2021 will be a great year for crowdfunding.

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Real estate crowdfunding has given entry to new platforms in 2020 that have joined Housers, such as Urbanitae and Wecity

With a market share of 29.4%, loan crowdfunding continued to be the leader in fundraising in Spain, despite having reduced the money lent by 40% compared to 2019, where it raised $100.5 million (€82.5 million), compared to $60 million (€49.16 million). The three leading platforms, MyTriple A, October, and Grow.ly, have reduced what was raised.

With a share of 26.7%, equity crowdfunding was just behind. During 2020, there was a diversification of platforms, as well as a stability in investments, which have led it to raise $54.2 million (€44.55 million) in 2020, 6% less.

17.55% of the money raised in crowdfunding in 2020 was through real estate platforms, which raised $35.75 million (€29.36 million), 26.3% less. A sharp drop that is explained almost exclusively by the excessive dependence on a single platform. If Housers grows, the sector as a whole grows a lot and last year the platform raised less affected by the Covid-19 pandemic.

The positive side of real estate crowdfunding has been that during the past year dozens of platforms in this thematic began to finance projects, diversifying options and risks, balancing the collection between several firms and paving the way for this 2021 to be again one of the most active thematic. This year 2020 the three outstanding platforms are Housers, Urbanitae and Wecity. Other platforms such as Civislend, Icrowdhouse or Stockcrowd have already positioned themselves stably in the activity.

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(Featured image by Jorge Fernández Salas via Unsplash)

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

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