2015 UK Online Alternative Finance Report

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UK Alternative Finance Overview

New research shows that the UK online alternative finance market has grown to £3.2 billion in 2015, according to a join report published by the Cambridge Centre for Alternative Finance at the University of Cambridge and UK innovation foundation NESTA, in partnership with KPMG and the support of the CME Group Foundation.

UK Alternative Finance

Total UK Online Alternative Finance Raised Between 2013 and 2015

 

Great News For Equity!

The report found that equity based crowdfunding is the second fastest growing sector- up by 295% from £84 million raised in 2014 to £332 million in 2015. High growth rates were maintained through out all four quarters, almost doubling from Q1 (£38.76M) to Q4 (£81.7M).

Equity-based Crowdfunding Market Volume by Year and by Quarter (2013 to 2015)

Equity-based Crowdfunding Market Volume by Year and by  Quarter (2013 to 2015)

2015 was a particularly important year for equity crowdfunding. The average deal size in 2015 was £523,978 increasing significantly from the 2014 average deal size of £199,095, demonstrating the maturing of equity crowdfunding model.

Equity crowdfunding is not just for startups! Now bigger, later stage deals are increasingly turning to equity crowdfunding to raise funds.

On the investor side, it was found that there has been an increase in involvement of more traditional investors, including venture capital and angel investors.

Property Is Taking Off

Property is the single most popular sector – combining debt and equity amounted to almost £700M in 2015.

Equity crowdfunding for property enables investors to acquire ownership of a property asset via the purchase of shares of a single property or number of properties.

Growth rates increased rapidly this year indicating that equity crowdfunding for property has the potential to become a substantial segment in the UK, as it has become in the US.

If you’re interested in running your own property crowdfunding platform contact us today.

Other key findings from the report include:

  • Increased share of the market for business finance: in 2015 it is estimated that online alternative finance platforms provided the equivalent of over 3% of all lending to SMEs (small and medium-sized enterprises) in the UK.
  • The industry is generally satisfied with current regulation: when asked what they thought of existing regulation, more than 90% of P2P lending and equity-based crowdfunding platforms stated that they thought the current level was appropriate.
  • The biggest risk to market growth is fraud or malpractice: when asked what they saw as the biggest risk to the future growth of the market, 57% of P2P lending and equity-based crowdfunding platforms cited the potential collapse of one or more of the well-known industry player due to fraud or malpractice

 

Full report can be read here.

 

All figures taken from Pushing Boundaries – The 2015 UK Alternative Finance Industry report by the Cambridge Centre for Alternative Finance at the University of Cambridge and UK innovation foundation Nesta, in partnership with KPMG and the support of the CME Group Foundation

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