The Swiss crowdfunding market has reached a record high volume of CHF 374.5 million in 2017, almost three times more than in the previous year. This has been revealed by the latest Crowdfunding Monitoring report issued by the Lucerne University of Applied Sciences and Arts. The financing of SMEs and investments in real estate are key drivers of the strong growth. The authors of the report are expecting a further marked increase to about CHF 1 billion this year. Compared to the more advanced markets in the United Kingdom and the United States, Switzerland is two to three years behind, but catching up rapidly.
Published by the Lucerne University of Applied Sciences and Arts, the annual Crowdfunding Monitoring report is already into its fifth year. The current report features record figures: CHF 374.5 million was brokered via crowdfunding platforms in 2017, almost three times more than in 2016 (CHF 100 million, +192%). Over the past eight years, more than half a billion Swiss francs have been brokered via this form of financing.
The major growth drivers in terms of volumes in recent years have been finance for SMEs via crowdlending and investing in property via crowdinvesting. “Professional investors increasingly perceive crowdfunding as an interesting investment,” says report author Andreas Dietrich. “We expect the Swiss crowdfunding market to break the billion franc mark at the end of the year.”
High growth in all areas
Some 160,000 people backed crowdfunding projects in Switzerland in 2017. The Swiss crowdfunding market can be divided into four segments: reward- and donation-based crowdfunding, crowdinvesting, invoice trading, and crowdlending (see box for details). Crowdlending recorded the largest volume (CHF 186.7 million, +239% over the previous year), followed by crowdinvesting (CHF 135.2 million, +245%). Invoice trading generated CHF 23.5 million (+38%), while reward- and donation-based crowdfunding achieved a volume of CHF 29.1 million (+72%) (see illustration).
Over 1500 cultural and creative projects successfully funded
“The lower volumes recorded for reward- and donation-based crowdfunding do not mean that this segment is unimportant,” says report author Andreas Dietrich. Since the segment primarily involves creative and cultural projects, the volumes of the campaigns tend to be small compared, for example, to real estate projects. But with over 1500 successfully financed campaigns in 2017 (+15% over the previous year), reward-based crowdfunding/crowddonating has continued to grow as a relevant source of funding. Arguably the highest-profile campaign in this segment in 2017 was that run by Republik magazine (CHF 3.5 million).
International perspective: Switzerland two to three years behind – but catching up
The Swiss crowdfunding market has grown significantly more rapidly than those of neighbouring countries since 2015. With a per capita investment volume of CHF 45 (2016: CHF 15), Switzerland still lies two to three years behind leading crowdfunding markets such as the USA (2016: CHF 78) or the UK (2016: CHF 90) – but it is catching up fast: “The strong momentum provided by new platforms and alternative business models suggests that Switzerland is catching up with highly developed crowdfunding countries such as the USA and the UK,” says Andreas Dietrich.
Hidden concentration in the crowdfunding market
43 crowdfunding platforms were maintaining a physical presence in Switzerland as of the end of April 2018. Also in the market are several nondomestic platforms without an office in Switzerland. Despite the large number, each crowdfunding segment is dominated by a handful of major platforms. In the crowd lending and reward-based crowdfunding segments, for example, the six largest platforms each have a market share of 96 percent and 97 percent respectively.
This concentration is expected to continue: “That said, small, innovative niche players will continue to survive in the market,” says Andreas Dietrich.
Businesses and institutional investors discover crowdfunding
The involvement of larger businesses and institutional investors is becoming more prevalent across all areas of crowdfunding. In reward-based crowdfunding/crowddonating, for example, projects are increasingly being launched with the support of businesses. In crowdlending, crowdinvesting and invoice trading – segments of interest to investors – the proportion of institutional investors will increase significantly in future. This will have the effect of contributing significantly to the continued rapid growth in volume.
Two Swiss platforms have already announced their intention to launch innovative products based on blockchain technology in 2018. From spring 2018, Swisspeers is looking to transact loans between business and investors as “smart contracts” in the Ethereum blockchain and represent creditors’ claims using tokens. Wemakeit is planning to launch a new crowdfunding platform that will be completely blockchain based. The report’s authors are anticipating that blockchain technology will find other fields of application in the crowdfunding market in the coming years.
The Crowdfunding Monitoring Switzerland report is published on an annual basis by the Institute of Financial Services Zug IFZ (an institute of the Lucerne University of Applied Sciences and Arts) with raw data supplied by all crowdfunding platforms in Switzerland. The following platforms provided support in the form of data: 100-days, 3Circlefunding, Advanon, Cashare, Creditfolio, CreditGate24, creditworld, Crowdhouse, crowdli, Funders, GivenGain, Hyposcout, I believe in you, I care for you, ideenkicker.ch, Immoyou, Indiegogo, investiere, Kickstarter, Lend, Lendico, Lendora, Lokalhelden, Progettiamo, ProjektStarter, Splendit, Swisslending, Swisspeers, and wemakeit.
Download: The Crowdfunding Monitoring Switzerland can be downloaded here.
Reward-based crowdfunding: typically used to raise funds for creative and cultural projects as well as those in the area of sports. Investors receive a product, artistic work or service for their contribution, e.g. a free copy of the book in the case of a book launch.
Donation-based crowdfunding: typically donations for social, charitable and cultural projects that are not linked to any consideration/reward.
Crowdinvesting: investments of equity or mezzanine capital in businesses (start-ups) or real estate. In return, investors receive a share of the profit.
Crowdlending: used by businesses and individuals to raise loans. In return, lenders receive interest payments, the level of which depends on the risk of the borrower.
Invoice trading: investors buy outstanding invoices from businesses for a discount. This allows businesses to bridge payment periods or free up liquid resources.
Crowdlending Survey 2018
At the beginning of May the Lucerne University of Applied Sciences and Arts in partnership with PwC Switzerland and the Swiss Marketplace Lending Association published a separate study on the Swiss crowdlending market showing the economic relevance of crowdlending in Switzerland and abroad. In addition, the study highlights the key challenges and problem areas – especially the lack of transparency – facing the crowdlending market. The Crowdlending Study 2018 is free and available in German and English here.
- Graph: progression of crowdfunding in Switzerland 2008 – 2017
- Tables: crowdfunding volumes and campaign numbers in Switzerland 2008 – 2017
- Graphs: international comparison of crowdfunding (volume per inhabitant)
Crowdfunding volumes and campaigns in Switzerland 2008 – 2017
Campaign volumes disbursed in CHF million
Reward- & Year Crowd- donation-based investing Crowdfunding Crowdlending Invoice trading Total
2008 0 0 0.1 0 0.1
2009 0 0 0.2 0 0.2
2010 0.4 0 1.3 0 1.7
2011 1.7 0.3 1.1 0 3.1
2012 1.9 2.5 0.9 0 5.3
2013 5.6 4.2 1.8 0 11.6
2014 4.6 7.7 3.5 0 15.8
2015 7.1 12.3 7.9 0.4 27.7
2016 39.2 17.0 55.1 17.0 128.2
2017 135.2 29.1 186.7 23.5 374.5
2008-2017 195.7 73.1 258.5 40.9 568.3
No. of campaigns
Reward- & Year Crowd- donation-based investing crowdfunding Crowdlending Invoice trading Total
2008 0 0 17 0 17
2009 0 0 28 0 28
2010 3 0 74 0 77
2011 6 15 85 0 106
2012 7 331 61 0 399
2013 10 594 116 0 720
2014 10 854 214 0 1,078
2015 17 1,059 266 n/a 1,342
2016 25 1,338 840 n/a 2,203
2017 42 1,536 2,086 n/a 5,113
2008-2017 120 4,668 3,787 n/a 11,083
U.S. inauguration turns poet Amanda Gorman into best seller
WASHINGTON (Thomson Reuters Foundation) – The president’s poet woke up a superstar on Thursday, after a powerful reading at the U.S. inauguration catapulted 22-year-old Amanda Gorman to the top of Amazon’s best-seller list.
Hours after Gorman’s electric performance at the swearing-in of President Joe Biden and Vice President Kamala Harris, her two books – neither out yet – topped Amazon.com’s sales list.
“I AM ON THE FLOOR MY BOOKS ARE #1 & #2 ON AMAZON AFTER 1 DAY!” Gorman, a Los Angeles resident, wrote on Twitter.
Gorman’s debut poetry collection ‘The Hill We Climb’ won top spot in the online retail giant’s sale charts, closely followed by her upcoming ‘Change Sings: A Children’s Anthem’.
While poetry’s popularity is on the up, it remains a niche market and the overnight adulation clearly caught Gorman short.
“Thank you so much to everyone for supporting me and my words. As Yeats put it: ‘For words alone are certain good: Sing, then’.”
Gorman, the youngest poet in U.S. history to mark the transition of presidential power, offered a hopeful vision for a deeply divided country in Wednesday’s rendition.
“Being American is more than a pride we inherit. It’s the past we step into and how we repair it,” Gorman said on the steps of the U.S. Capitol two weeks after a mob laid siege and following a year of global protests for racial justice.
“We will not march back to what was. We move to what shall be, a country that is bruised, but whole. Benevolent, but bold. Fierce and free.”
The performance stirred instant acclaim, with praise from across the country and political spectrum, from the Republican-backing Lincoln Project to former President Barack Obama.
“Wasn’t @TheAmandaGorman’s poem just stunning? She’s promised to run for president in 2036 and I for one can’t wait,” tweeted former presidential candidate Hillary Clinton.
A graduate of Harvard University, Gorman says she overcame a speech impediment in her youth and became the first U.S. National Youth Poet Laureate in 2017.
She has now joined the ranks of august inaugural poets such as Robert Frost and Maya Angelou.
Her social media reach boomed, with her tens of thousands of followers ballooning into a Twitter fan base of a million-plus.
“I have never been prouder to see another young woman rise! Brava Brava, @TheAmandaGorman! Maya Angelou is cheering—and so am I,” tweeted TV host Oprah Winfrey.
Gorman’s books are both due out in September.
Third on Amazon’s best selling list was another picture book linked to politics and projecting hope: ‘Ambitious Girl’ by Vice-President Kamala Harris’ niece, Meena Harris.
(Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Lyndsay Griffiths. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)
Why brands harnessing the power of digital are winning in this evolving business landscape
By Justin Pike, Founder and Chairman, MYPINPAD
Delivery of intuitive, secure, personalised, and frictionless user experiences has long been table stakes in digital commerce, well before the era of COVID-19. As businesses harness the revolutionary power of digital technologies, they have pursued large-scale change to adapt to evolving consumer preferences (some more successfully than others, but that’s a blog for another day). Digital transformation is a term we hear repeatedly, and it looks different for each organisation, but essentially, it’s about utilising technology and data to digitise, automate, innovate and improve processes and the customer experience across the entire business.
As I said, this was already well underway but then came 2020 and no industry escaped the disruption of the coronavirus outbreak, which has had an indelible impact on businesses performance, operations, and revenue. Regardless of whether the impact of COVID has been very positive or very challenging, it has forced organisations globally to re-evaluate and re-orient strategies to adapt.
As lockdowns and pandemic-related restrictions continue to change daily life, this raises the question of how we can balance a dramatic shift to digital and the benefits it brings, while ensuring business continuity and innovation both during and post-COVID, and protecting everyone against fraud?
Digital is an essential survival tool, and even more so in a COVID world
No one could have predicted the dramatic digital pivot that has taken place over this year. Indeed, within weeks of the COVID outbreak cash usage in the UK dropped by around 50%. Digital solutions including delivery applications, contactless payments, mobile commerce, online and mobile banking have become essential components of a touchless customer experience in the era of social distancing. It’s no longer just about an enhanced and superior customer experience, it’s also about health, safety and survival.
In store, businesses have benefited from contactless payments enabling faster throughput and reduced need for consumers to touch payment terminals (therefore requiring greater cleaning, which degrades the hardware much faster). Mastercard reported a 40% increase in contactless payments – including tap-to-pay and mobile pay – during the first quarter of the year as the global pandemic worsened. Digital has also become an essential sales channel for many B2C brands. Where brick and mortar stores have been required to close, digital commerce enables continuity of customer relationships and revenue. This channel also provides brands with rich customer data, which can be used to enhance and personalise the customer experience and typically results in greater levels of engagement and uplifts in revenue.
Industry forecasts estimate that worldwide spending on the technologies and services enabling digital transformation will reach GBP 1.8 trillion in 2023 – a clear indication that the process represents a long-term investment and a global commitment to digital-first strategy. The key point here is that digital brings significant benefits, and regardless of COVID, is here to stay.
The challenges that rapid digital transformation brings to businesses
Regardless of whether businesses are operating in developed or less-developed economies, these times of crisis have levelled the playing field in the sense that all businesses are facing similar issues. Access to products and supplies, maintaining customer relationships, accelerating sales for some and declining sales for others, health and hygiene are just a few of the unique challenges brought about by COVID.
Many businesses in physical environments have had to swiftly implement changes to significantly reduce safety risks for staff and customers, such as contactless payments, mobile ordering and delivery options. But with these changes come a host of other benefits of digitisation, such as faster transactions, and reduced human error at the point-of-sale.
The reliance on technology, however, can also expose organisations and consumers to certain vulnerabilities. In particular, the risks of fraud and cybercrime have dramatically increased since the onset of the pandemic as scammers have taken advantage of digital technologies to target both businesses and individuals.
As a McKinsey report illustrates, new levels of sophistication in the activities of fraudsters have placed more pressure on companies that have been previously slow to go digital, bringing “into sharp relief how vulnerable companies really are”, and damaging the financial health of small and large businesses. In fact, the Bottomline 2020 Business Payments Barometer reveals that only one in 10 small businesses across the UK report recovering more than 50% of losses due to fraud.
But take these stats with a grain of salt. While it is important to be aware of the risks and challenges this new business landscape brings, it’s equally as important to have a lens firmly across your own business, industry and audience, and to identify the changes you can make internally to mitigate risk as well as improve your customer experience. Where can you make some quick wins? Do you have the right skillsets internally to achieve what you need to achieve? What technology is out there that will enable your business goals? There are tech companies like MYPINPAD that are making huge strides in software development, which will transform businesses globally.
A digital world post-COVID
Almost a year in, the line between business success and failure remains fragile. However, an ongoing transition towards greater digitisation will be the difference between survival and the alternative.
There is a wide range of initiatives businesses can implement to weather this storm. If we look at the space MYPINPAD operates within, secure digital consumer authentication is crucial to the ongoing success and security of not only financial products but also identification and verification across a range of different industry verticals. Shifting the authentication of consumers securely onto mobile devices enables businesses to completely reshape their customer experiences. By bringing together a more seamless, frictionless customer experience, accessibility, privacy, security and access to consumer data, businesses are able to drive digital transformation across day-to-day activities.
Against this backdrop, software with stronger security standards continue to play an ever more vital role in supporting society, protecting consumers and businesses from the increase in risks that rapid digitisation brings. Already, merchants can deploy PIN on Mobile technology from companies like MYPINPAD, onto their smart devices to speed up the digitisation process many are now tackling.
Essentially, opening up universal payments and authentication methods that feel familiar, for both online and face-to-face transactions, will be key to opening up a world of possibilities when it comes to redefining how businesses engage with consumers.
Brexit responsible for food supply problems in Northern Ireland, Ireland says
LONDON (Reuters) – Food supply problems in Northern Ireland are due to Brexit because there are now a certain amount of checks on goods going between Britain and Northern Ireland, Irish Foreign Minister Simon Coveney said.
British ministers have sought to play down the disruption of Brexit in recent days.
“The supermarket shelves were full before Christmas and there are some issues now in terms of supply chains and so that’s clearly a Brexit issue,” Coveney told ITV.
The Northern Irish protocol means there are “a certain amount of checks on goods coming from GB into Northern Ireland and that involves some disruption,” he said.
(Reporting by Guy Faulconbridge; Editing by Tom Hogue)
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