What happened last month in the alternative investment 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 October 2022 and dive deeper into this month’s focus: Comparing alternative investments in Europe and the US.
About the monthly report
In the monthly funding report, we publish the funding amounts of online alternative investment platforms. We track data from 60 participating platforms, operating in 21 markets and 7 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.
Key highlights: What happened last month in alternative investing?
The alternative investment market has stagnated since the last month. We recorded a total funding volume of €395m in October 2022 – about the same amount as in September 2022. The total monthly funding volume in October 2022 was lower by €51m compared to the same time in 2021.
Looking at funding across the main investment categories, most funding in October 2022 went to platforms offering consumer investments (€214m), followed by business (€95m), and property investments (€79m). Consumer lending increased by 12%, while business lending and property lending decreased by 8%, and 7% respectively, compared to September 2022.
Platforms’ performance: How did the key players do in October 2022?
Opyn funded the most loans in October 2022, followed by Mintos and PeerBerry. Overall, the five largest platforms accounted for 56% of the total funding volume recorded in our database, while the ten largest platforms funded 72% of the total volume. The largest players were most likely to be direct marketplace lending platforms (5 out of 10) come from Croatia (2 out of 10) and offer consumer investments (7 out of 10).
AxiaFunder – an equity crowdfunding platform from the United Kingdom, offering other investments, has been the fastest-growing platform in the last year, followed by Income Marketplace and Lendwise. The “rising stars” were most likely to be direct marketplace lending platforms (6 out of 10), come from the UK (2 out of 10) and offer consumer investments (5 out of 10).
Bulkestate, Ablrate and Flex Funding have performed the worst compared to the previous year. Overall, the declining or slow-growing platforms were most likely to be direct marketplace lending platforms (7 out of 10), come from Latvia (2 out of 10) and offer property investments (4 out of 10).
Finally, we reported several noteworthy milestones reached last month:
- Esketit has funded more than €100m worth of loans since its inception.
- CrowdProperty has crossed the €300m total funding threshold.
- Robocash has reached over €500m of total funded loans to date. Congrats!
Deep Dive: Alternative investments in Europe and the US compared
At P2PMarketData, we’ve continued to build the Platform Search Tool and improve the alternative investment statistics, collating information about over 1,000 alternative investment platforms worldwide. This month, we look closely at our global data and compare the world’s two largest alternative investment markets in the database.
The first thing to note is that the US is a much more concentrated market. According to the Cambridge Centre for Alternative Finance, the US was by far the largest market in the world in 2020, having funded $73.62 billion of total volume (corresponding to 65% of the global market share). Europe trailed far behind with $22.6 billion, over half of which came from the UK alone ($12.6 billion). Yet, we have 219 US-based platforms in our database and as many as 536 from Europe. The Cambridge data suggest an even bigger discrepancy – they recorded 654 “observations” in Europe and only 72 in the US (although these “observations” account for platforms operating in multiple jurisdictions, e.g., if a platform operates in five countries, it’s counted five times).
Furthermore, different investment types rule on the two sides of the Atlantic:
- Europe is the cradle of marketplace lending – debt accounts for over a third of all alternative investments, compared to less than a tenth in the US. The P2P lending sector in the US owes its underdevelopment largely to the regulators – the Securities and Exchange Commission (SEC) forbids P2P lending in pure form. As a result, American P2P lending platforms face “significant regulatory hurdles” in securing intermediation of banks and obtaining state licences.
- Almost as to compensate for the undersupply of debt investments, the US rocks the venture sector (accounting for 37% of all alternative investments). The Jumpstart Our Business Startups (JOBS) Act, signed into law in 2012, allowed startups to raise funds from non-accredited investors through crowdfunding, creating a good-enough regulatory framework for the sector to boom.
- Although real estate investments seem to be on an equal footing in both markets, some interesting differences prevail. In Europe, investors back real estate projects mainly through debt instruments (100 out of 114 real estate platforms), while in the US – through funds and equity.
- Finally, the US is much more prone to purely digital investments: almost a third of all alternative investments go to crypto and collectibles (although collectibles can include physical investment goods such as spirits or cards, most represent NFTs and the like). European investors seem much more sceptical about these investment forms – or they simply invest on American crypto platforms!
Times are tough for the alternative investment sector, including the still-felt impacts of the invasion of Ukraine, the looming recession, and crypto trading at historically low levels. Stay tuned with P2PMarketData statistics and market reporting for the most up-to-date information about the sector!