Growth of pan-European crowdfunding accelerates

The New Regulation on European Crowdfundig Service Providers (ECSP), which was introduced to overcome the biggest EU-crowdfunding industry’s problem: its fragmentation. The new regulation has opened doors for pan-European crowdfunding expansion; many platforms now feel the urge to go cross-border and find new partners to grow together.

Several acquisitions took place last year and others are in the making. The Dutch platform Symbid was acquired by Romanian co-investment platform SeedBlink, which focuses on tech startups and scale-ups. The October platform acquired its French competitor Credit.fr, while the Babyloan, another French platform,became part of Lendahand from the Netherlands.

Another development is the increased interest among crowdfunding parties from the UK and US, which are expected to enter the pan-European market soon.

Making crowdfunding more liquid

Thanks to the new European regulations crowdfunding can now make greater progress, says De Vries. “The lack of a common market made the difference between us and the US and the UK. The US crowdfunding market has exploded in recent years. That is also the reason that this sector wants to expand to Europe. In the UK crowdfunding has always been big. The European Commission now really wants to improve access to finance for SMEs, for fast-growing companies, for energy parks, etc. That is why the market for crowdfunding has been thrown open.”

A big improvement is also that crowdfunding platforms that acquire the new ECSP license now can facilitate trading of bonds and shares among their investors, making crowdfunding more liquid. Investors on the platform can buy and sell their bonds and shares. This makes it possible for companies to raise longer term finance. For example debt for longer than 10 years to finance the construction of renewable energy projects.

De Vries concludes: “This ends one of the most hindering factors for crowdfunding. There is no market place yet, but we now can create a secondary market place, as platforms enable direct selling and buying of individual crowdfunding investments.”