What happened last month in the crowdfunding and marketplace lending markets? Which platforms are on the rise, and which ones are falling behind? How has the sector performed over the last year? We look at numbers reported to P2PMarketData in January 2022 and dive deeper into this month’s focus: licencing of crowdfunding platforms.
About the monthly report
In the monthly funding report, we publish the funding amounts of online crowdfunding platforms. We track data from 76 participating platforms, operating in 24 markets and 9 different currencies. Please note that:
- We convert all amounts to EUR for comparison reasons, using exchange rates from the last day of the month.
- None of the numbers cited is an estimation – the amounts are reported directly to us or pulled from the platforms' publicly available loan books and statistic pages.
- Historical funding volumes reported below may divert slightly from volumes calculated in previous reports due to exchange rate fluctuations and the changes in the pool of platforms we track.
We've welcomed four new platforms into our database this month – Max Crowdfund (a direct marketplace lending platform based in the Netherlands, which offers real estate loans), Supervest (a resale marketplace lending platform based in the United States, which offers business loans and personal loans), Letsinvest (a direct marketplace lending platform based in Lithuania, which offers real estate loans), and Kirsan Invest (a direct marketplace lending platform based in Spain, which offers real estate loans). You can check out the whole dataset at p2pmarketdata.com!
Key highlights: What happened last month in crowdfunding?
After a period of growth, the market slowed down this month. We recorded a total funding volume of €539m in January 2022 – a decrease of 21% compared to December 2021 (down from €682m).
Looking at the longer term, the sector has grown by 43% over the past year, at a 3.6% average monthly growth rate. The total monthly funding volume in January 2022 was higher by €151m compared to the same time in 2021.
Looking at funding across the main investment categories, most funding in January 2022 went to platforms offering consumer investments (€329m), followed by business (€112m), and property investments (€91m). Consumer lending, business lending, and property lending decreased by 11%, 29%, and 38% respectively, compared to December 2021.
Platforms’ performance: How did the key players do in January 2022?
Mintos funded the most loans in January 2022, followed by PeerBerry and Credimi. Overall, the five largest platforms accounted for 53% of the total funding volume recorded in our database, while the ten largest platforms funded 68% of the total volume. The largest players were most likely to be resale marketplace lending platforms (5 out of 10) come from Latvia (3 out of 10) and offer consumer investments (6 out of 10).
Max Crowdfund – a direct marketplace lending platform from the Netherlands offering property investments, has been the fastest growing platform in the last year, followed by Kviku Finance and EvenFi. The “rising stars” were most likely to be direct marketplace lending platforms (7 out of 10), come from Italy (2 out of 10) and offer property investments (5 out of 10).
Viventor, Housers and Finansowo have grown at the slowest rate. Overall, the slowest-growing platforms were most likely to be direct marketplace lending platforms (7 out of 10), come from Latvia (2 out of 10) and offer business investments (4 out of 10).
Finally, we reported several noteworthy milestones reached last month:
- Kviku Finance has funded more than €10m worth of loans since its inception.
- Loanpad has crossed the €100m total funding threshold.
- ViaInvest has broken above the €300m mark.
- EstateGuru has funded more than €500m worth of loans since its inception.
- CreditGate24 has crossed the €900m total funding threshold.
- PeerBerry has reached over €1b of total funded loans to date. Congrats!
A deep dive: Licencing of crowdfunding platforms
We’ve recently started to track the regulation status of our partner platforms. The data we have gathered so far reveals a curious and fragmented picture of crowdfunding regulation worldwide. Overall, two-thirds of platforms we track are licenced in one way or another. Out of these, a third hold a dedicated crowdfunding licence, while others (usually in the absence of specific licences in their home countries) get licenced as credit, payment, or investment firms.
Looking at different regulatory authorities across countries, we can distinguish between three main approaches to regulation:
- Authorities recognise the distinct business model of online crowdfunding platforms and grant dedicated licences. This practice seems to be particularly common in Asia – for example, India, Indonesia, Malaysia, Singapore, and South Korea have introduced crowdfunding licences. Several European countries also have done so, including Belgium, Estonia, France, Italy, Latvia, Lithuania, Portugal, and Spain.
- In the absence of specific licences, platforms register under other financial services categories. Most notably, the British FCA regulates most platforms as consumer credit providers. Most Nordic platforms are licenced as payment institutions (for example, in Denmark, Finland, Norway, and Sweden). Some platforms obtain more than one licence (e.g., both a payment and a credit licence).
- Platforms self-regulate. As far as we know, this is a unique practice of the Swiss market, which is, we should say, one of the most mature and developed ones in Europe. Platforms voluntarily associate in self-regulatory organisations and set and enforce their transparency and prudence rules.
At least in Europe, the regulatory picture is likely to change significantly soon. The Regulation on European Crowdfunding Service Providers (ECSP) came into force in late 2021. The ECSP introduced a single licence (an EU passport) granted based on a set of uniform rules across the EU. The regulation has its limitations – it concerns only business financing (both debt- and equity-based) but, arguably, provides a significant stepping-stone towards a harmonised regulatory regime in Europe. We will be looking into what effects the ECSP might have in the upcoming months and years on alternative business financing in the EU. We will also keep updating our data on platforms’ licences, so stay tuned and check out our improved platform pages.