With a total volume of CHF 374.5 million, the market for crowdfunding in Switzerland touched a record high in 2017, the figure is nearly thrice the volume a year earlier.
The latest Crowdfunding Monitoring report issued by the Lucerne University of Applied Sciences and Arts highlighted this information.
The crucial drivers of the strong growth include funding for of SMEs and investments in real estate. The report noted an expectation about the significant increase in crowdfunding to about CHF 1 billion in 2018. The report further noted that the crowdfunding market in Switzerland is fast catching up with the more advanced markets such as the United Kingdom and the United States.
This is the fifth annual crowdfunding report issued by the Lucerne University of Applied Sciences and Arts.
“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.”
In 2017, crowdfunding projects in Switzerland were backed by about 160,000 people. Reward- and donation-based crowdfunding, crowdinvesting, invoice trading, and crowdlending are the four segments that the Swiss crowdfunding market is typically segregated into. The segment of crowdlending made the largest volume at CHF 186.7 million which is a 239% increase over the previous year. Crowdinvesting, with CHF 135.2 million and a 245% year-on-year increase was noted by the segment crowdinvesting and it was the second largest segment. The thirds largest was invoice trading which generated CHF 23.5 million – a 38% rise compared to the last year and the fourth was reward- and donation-based crowdfunding which generated a volume of CHF 29.1 million which noted a 72% rise compared to the previous year.
Crowdfunding managed to finance more than 1500 cultural and creative projects.
“The lower volumes recorded for reward- and donation-based crowdfunding do not mean that this segment is unimportant,” says report author Andreas Dietrich.
But compared to large projects such as real estate projects, the volumes of the campaigns are typically small in this segment because the segment mainly involves creative and cultural projects.
Since 2015, the growth in the Swiss crowdfunding market has been fast compared to neighbouring countries. Switzerland has an average per capita investment of CHF 45 in 2017 and compared to other leading markets such as the USA (2016: CHF 78) or the UK (2016: CHF 90), Switzerland is still lies two to three years behind. But the country 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.
Across all areas of crowdfunding, the participation of larger businesses and institutional investors is becoming more prevalent.
(Adapted from PRNewswire,com)