Alternative finance, at least in some European countries, is on the cusp of becoming mainstream.
- Robert Wardrop
The European online alternative finance market grew by 144% last year, and could reach €7 billion in 2015, according to a new report produced by the Centre for Alternative Finance at University of Cambridge Judge Business School and professional services organisation EY (formerly Ernst & Young).
The report includes input from 14 key national or regional industry associations, as well as 255 leading platforms in Europe, covering an estimated 85%-90% of Europe’s online alternative finance market. While previous studies have charted alternative finance in the UK, this report is the first to cover other European countries in detail.
Seen until recently as a niche activity, online alternative finance, including equity-based crowdfunding and peer-to-peer business lending, has become a vital and increasingly commonplace source of essential funding for many businesses throughout Europe, says the report.
Online alternative finance grew across Europe from €1.21 billion in 2013 to €2.96 billion in 2014. The overall European alternative industry is on track to grow beyond €7 billion if the market fundamentals remain sound and growth continues at current rates.
The volume of online alternative business funding has been growing steadily at around 75% year on year, and the estimated number of businesses funded in this way has been growing at an even faster average rate — 133% over the last three years to around 5,801 companies in 2014.
“These new forms of alternative finance are growing quickly, and this growth is beginning to attract institutional investors,” said Robert Wardrop, Executive Director of the Centre for Alternative Finance at Cambridge Judge, and co-author of the new report. “Alternative finance, at least in some European countries, is on the cusp of becoming mainstream.”
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Image:Financiación colectiva (cropped)
Credit: Colbrain
Reproduced courtesy of the University of Cambridge
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