James Codling, co-founder and managing director of VentureFounders – rising interest from B2B scale-upsIn 2017 the equity crowdfunding market will continue to mature and gain further credibility, and this evolution will mark the beginning of a shift in the way equity crowdfunding is used, both by investors and businesses. This is based on a trend we saw towards the end of 2016 for increasing numbers of companies, which you would not usually associate with crowdfunding, looking to include equity investment from alternative finance in their fundraising mix. B2B scale-ups are becoming increasingly open to supporting their funding rounds with additional investment from private investors through online platforms, especially in the health, science and marketing sectors. Additionally, the rounds they are raising are significantly larger than those that raise exclusively through crowdfunding; at VentureFounders we supported four of the 20 largest rounds in 2016 and our campaigns typically total £2.5-5m. I expect this size of fundraise to become the norm – and even possibly increase – in 2017. This shift is due to an increased interest from sophisticated investors looking to diversify their portfolios, who need opportunities that have market traction to cater for their appetite to invest in growth businesses. As 2017 sees the market begin to catch up with this demand, it will become a pivotal year for equity crowdfunding being recognised as a mainstream investment and fundraising channel.
Luke Lang, co-founder and chief executive of Crowdcube – a growing focus on innovative technologiesCrowdfunding will be a catalyst for growth and innovation in the UK’s technology sector, cementing its role as a primary funding route for the next wave of tech businesses. According to Beauhurst, technology remains the most popular industry sector among crowdfunding investors.
This year will bring an abundance of exciting opportunities to back promising companies that use new technologies to shake up old models and change the way products and services are delivered. These will include ventures operating in the booming fintech sector, but also ambitious companies from the emerging proptech, cleantech and healthtech industries. We’ve seen an increasing number of disruptive seed and growth stage companies funding on our platform in the last year, including fintech pioneer goHenry, challenger bank Monzo, energy storage company Powervault and HealthUnlocked, the social network for health that’s embedded in NHS websites. Both goHenry and Monzo broke records – achieving the highest and fastest raises in crowdfunding history, respectively – which indicates a strong appetite among investors to have a stake in the future of technology innovation in the UK.