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The Unprecedented Growth of Crowdfunding

MAX PROPERTY GROUP ARTICLE

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The Unprecedented Growth of Crowdfunding

The Dutch crowdfunding market is expected to grow explosively in 2021. This is due to a ‘post-Corona summer’ and an open European market. As a result, in 2021, the national crowdfund market will move towards half a billion funding in one year for the first time. This article will zoom in on the changes between 2020 and the first half of 2021 (Crowdfundmarkt, Dutch only). 

Development crowdfunding market

After years of growth, the crowdfunding market also came to a standstill in 2020 due to the COVID-19 pandemic. Ultimately, the market shrank to 273 million euros in crowdfunding. This is the same as in 2018 and 20% lower than the market size in 2019 (326 million euros).

As a result of the virus, consumers are having a huge amount of savings. In the second quarter of 2020 alone, according to De Nederlandsche Bank (DNB), 12.4 billion euros more was saved than in the previous year. In combination with the low interest on these savings, a large amount of savings is currently resulting in high stock prices and house prices. However, after the crisis, consumers will start spending more again, and people are even talking about an explosive ‘post-Corona summer’. Entrepreneurs will respond to this with new ideas and (growth) plans. Crowdfunding is in a ‘pole position’ to quickly and online build a bridge between these entrepreneurs and savers through direct financing.

As a result of new European regulations, an open European crowdfunding market will emerge. In anticipation of this, some major Dutch players will enter the European market in 2021.

Explosive growth in the first six months

An unprecedentedly strong second-quarter provides 249 million euros in financing via crowdfunding in the first half of 2021. This is apparent from an analysis by the Crowdfundmarkt industry association. Never before has so much money been raised through crowdfunding in six months. In the whole of 2020, the market size was 290 million euros.

The growth in popularity is in line with the expectations made at the beginning of the year. Because of the ‘post-Corona summer’ and the open European crowdfunding market, the predictions of the rest of the year will be that the crowdfunding market in the Netherlands will move towards half a billion funding.

The growth of Max Crowdfund

Since the approval of the Dutch Financial Authorities (AFM) in July of 2020, Max Crowdfund has successfully placed the first project on the platform in October. In the first six months of 2021, the platform already raised more than €1.6 million.

Max Crowdfund is looking favourably at new regulations implemented by the European Union as regulation creates trust with investors and opens doors for new opportunities. The best example is the new ECSP-Regulation (European Crowdfunding Service Providers) published by the European Union on 20-10-2020. This regulation will allow the platform to provide the services Pan-European. This means that not only will we be able to acquire funding from a bigger pool of investors. On the other hand, they will also be able to diversify the range of investment opportunities. So, in conclusion, with the new regulation, Max Crowdfund is expecting tremendous European growth.

Written by: Julia van der Kooij

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