The Latest Crowdfunding News – 2/6/16
The Latest Crowdfunding News
Hi guys and welcome to our first crowdfunding blog post of the month. As usual, we will be travelling around the world for the latest crowdfunding updates. Our journey starts in the capital and we take a look at digital challenger bank Tandem who smashed their crowdfunding target in minutes to ending our journey in the Åland Islands. Missed our last crowdfunding updates? If so, catch up here.
Tandem Smashes Crowdfunding Target In Minutes
Digital challenger bank Tandem smashed its crowdfunding target in minutes. The London based company raised £1m in just 20 minutes via crowdfunding platform Seedrs.
Due to the high demand from investors to get involved with this London Fintech company, Seedrs experienced a glitch on their site. Another digital challenger bank, Mondo experienced something similar when it raised £1 million in just 96 seconds!
Tandem revealed ahead of their crowdfunding campaign that it has so far raised £22m from high profile investors such as eBay founder Pierre Omidyar and several Silicon Valley venture capital firms.
The surge in investor interest in challenger banks just goes to show how people still have a distrust of high street banks and are seeking an alternative. A fintech revolution could be upon us.
Nantwich Honey Brand Smashes Crowdfunding Target
A crowdfunding story which is close to home! Haughton Honey have smashed their £80,000 crowdfunding target and have collected over £120,000 in investments.
As mentioned in the Crewe Chronicle, over 200 investors backed the six-week campaign which was launched to support the next stage in Haughton Honey’s growth.
The Nantwich based company promoted their crowdfunding campaign on Crowdcube, gained an interest from retailers and as a result, eight independent retailers from the Midlands and East Anglia have secured a deal to stock their honey.
The money raised from the crowdfunding campaign be will used to recruit more bee farmers, expand markets as well as promoting the brand, which was launched in 2014.
Image source : Crewe Chronicle
Australian Crowdfunding Legislation Could Be Top of the List After Elections
We’ve covered Australian crowdfunding in our blogs on a few occasions, back in our crowdfunding news blog from late April (view here) we mentioned about the Crowd-Sourced Funding bill, which was Australia’s push for a legislative update for investment crowdfunding regulations, silently died.
However, the bill could be reborn as the country is in the midst of an election with the Turnbull government fighting to control the reigns of government.
As mentioned in previous blog posts on the issue, although some parties are against the crowdfunding bill,there appears to be broad support to move forward on equity crowdfunding legislation later this year (as mentioned by Crowdfund Insider).
Equitise, an investment platform that operates in Australia and New Zealand respectively, mentioned in Crowdfund Insider that a new framework for crowdfunding may be one of the first bills to pass following the election.
They expect tax incentives for early stage investors and include a 20% non-refundable carry forward tax offset on investments in qualifying companies, capped at $200,000 per investor per year.
Again, we’ll keep you updated in future blog posts about the latest goings-on in Australia.
Crowdfunding Helps Europe’s Businesses Boom
From leaving the Southern Hemisphere we return to the north and wrap up warm as we travel to the Åland Islands, if you’ve not heard of them, they are part of Finland and are at the entrance to the Gulf of Bothnia in the Baltic Sea.
But before we look at the crowdfunding case study in the Åland Islands, let’s look at crowdfunding on a wider scale. It’s fair to say that in Europe crowdfunding is no longer seen as a niche concept as it is booming. Last year global crowdfunding was more than 30 billion euros last year.
Recent crowdfunding stats have indicated that it’s growing by more than 100 percent per year. And it’s going to be larger than venture capital financing this year, as mentioned by Invesdor’s CEO, Lasse Mäkela.
Now that we have set the scene a little, lets go back to the Åland Islands. Amalias Limonadfabrik, a family-run SME produces 100 percent natural lemonade, using only local products,realised that they needed to expand production and he immediately opted for crowdfunding.
The company used fellow Finnish crowdfunding platform Invesdor and gained over €86,000 in equity crowdfunding.
Thanks to crowdfunding, the company will soon automate part of their drinks production.
So what was down to the company’s success? Invesdor’s Lasse Mäkela told Euro News (this case study features in one of their past programmes) that Amalias Limonadfabrik had a good team behind him, and then there was some growth potential for the business. But also willingness and resources to do a good marketing campaign.
If you would like to know more about this campaign, click here to view the full article.
Image source : Euro News
Study Shows Crowdfunding Leads To More Funding
Office of Advocacy recently released a study of Kickstarter campaigns showing that the more money a crowdfunding campaign raises, the more likely its creator will get follow-on investment from other sources, like venture funds. (Forbes, May 2016).
The power of crowdfunding to attract follow-up funding is strongest at $75,000; after that according to their research, its marginal efficiency, as economists call it, starts to decline — each additional dollar raised brings a smaller increase. In addition, the higher the amount raised, people say, ‘all right, we get it, you’ve demonstrated the product has demand in the market place’, as mentioned by University of North Carolina professor Venkat Kuppuswamy. A positive response from the public can spur investors’ decision to fund even more (the Tandem example can be used here).
One company from the research used crowdfunding not just to raise funds but to also build a client base, find new employees, as well to generate publicity. Researches pointed out that successful crowdfunding had all these benefits to campaigners, though each case varied by the amount raised.
Read more on the research here.
What Are Your Thoughts?
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