U.S. Leads World In Burgeoning Crowdfunding Trend


The report estimates that in 2013, 72% of crowdfunding will stem from the US, 26% from Europe and 2% from the rest of the world. The US is clearly a leader in this space.

The following guest post is by David Drake, founder and chairman of LDJ Capital, a New York City private-equity firm, and of The Soho Loft Capital Creation Events series, a global events and media company.

Research firm Massolution released last Monday a crowdfunding industry report based on its research into 582 firms. 2013CF The Crowdfunding Industry Report estimates that crowdfunding sites globally will reach close to $5.1 billion in transactions for 2013, twice the $2.7 billion total for 2012. That data extrapolates to an 81% growth in 2013-12 versus a 64% growth in 2012-11.

Right now the spotlight is on LendingClub that offers peer-to-peer loans of up to $33,000. Last month they transacted $125 million with projections to lend up to $1.5 billion by year end. They stand to double in size from 2012 and are considered the behemoth as they are triple the size of the US second runner up Prosper; which has lent $400+ million cummulatively over the last few years.

“While the growth in 2012 funding volumes was primarily driven by both lending-based and donation-based crowdfunding, lending grew a compelling 111% to a total volume of $1.2 billion, and is expected to exceed $2 billion this year,” said Carl Esposti, CEO of Massolution. He adds: “The growth in lending volumes mainly stems from crowdfunded micro-loans and from local SME loans.”

The report concludes that lending-based crowdfunding grew the fastest in the world and combining LendingClub’s $1.5 billion trajectory in 2013 with Kickstarter’s 2012 $274 million revenue (the leading reward-based firm in the world had 230% growth in 2012) we could see these two firms hitting north of $2 billion.

The report estimates that in 2013, 72% of crowdfunding will stem from the US, 26% from Europe and 2% from the rest of the world. The US is clearly a leader in this space.

These are numbers that Bruce Lipnick, CEO and founder of Asset Alliance, anticipated. He announced last week at the crowdfunding event in the Innovative Investing Symposium in Boston at Thomson Reuters that he was entering the marketplace on a global scale through his investment in CrowdAllianceUSA.com. Bruce Lipnick, one of the pioneers in the Alternative Wealth Management and the Mutual Fund industry, currently manages and allocates capital through his affiliates of approximately $1.6 billion. Bruce added: “Our mission is not only to be one of the premier companies utilizing its international contacts but to focus its effort to help the crowdfunders have a profitable liquidity even through new and traditional avenues.”

The crowdfunding industry has arrived and leading financial firms like Asset Alliance are embracing it. We now see more considering it.

For more updates on the crowdfunding industry and information on alternative investment events, or if you have comments about this article, you can comment here or reach out to me at David@LDJCapital.com directly. Thank you.

Source: Forbes – May Say


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